The Philippine Stock Exchange (PSE) has bucked a plan by the Bureau of Internal Revenue (BIR) to increase the capital gains tax on listed companies that fail to maintain their minimum public ownership status.
The BIR insists that listed companies would need to prove their continued compliance with a minimum 10% public holding of their share capital, to maintain their favourable 0.5% stock transaction tax.
The BIR threatens that all transactions in the shares of listed companies whose minimum public holding fell below that percentage, exclusive of any treasury shares, would suffer a capital gains tax of 5%, for transactions with a value of up to PHP100,000 (USD2,220), or 10% if above PHP100,000.
The PSE points out that the application of the stock transaction tax is only conditioned on the listing of the shares and the execution of the trade of those shares through the facilities of the stock exchange.
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