BIR set to release new tax rules on public ownership

Sunday, 08 January 2012 17:52 Miguel R. Camus / Reporter

THE Bureau of Internal Revenue (BIR) expects to release within this month a new set of tax measures to deal with publicly listed firms not meeting the Philippine Stock Exchange’s (PSE) 10-percent minimum public ownership (MPO) rule.

BIR Commissioner Kim Jacinto-Henares said the department is finalizing the said guidelines to complement the PSE’s amended public ownership rules, which only recently obtained the approval of the Securities and Exchange Commission.

“We will release the rules this month,” Henares said in a phone interview on Friday. “The revenue regulation will deal with the basis for computing the 10 percent public float and the date when it will be computed.”

The PSE sought to tighten its public ownership rule amid threats of higher tax charges by the BIR.

The tax regulator said last year it plans to impose a 5-percent to 10-percent capital gains tax on stock transactions involving noncompliant companies instead of the preferential rate of one-half of 1 percent that listed firms currently enjoy.

Based on the rules provided by the PSE last week, firms with public ownership levels below 10 percent as of December 31, 2011 will be allowed a grace period that “shall not exceed 12 months but not beyond December 31.”

The PSE said once the grace period ends, it will impose a maximum six-month trading suspension after which the firm will be “automatically” delisted.

The PSE added that firms that become noncompliant on or after January 1, 2013 shall face a six-month trading suspension and then delisted automatically.

As part of its rules, the PSE said companies that file for voluntary delisting on the ground of non-compliance with the MPO rule must conduct either by itself or through its controlling shareholders, a tender offer to all stockholders of record.

Listed firms are required to disclose a public ownership report within 15 calendar days after the end of each quarter, it added.

PSE data as of end-September 2011 showed that about 16 percent or 41 companies remain non-compliant with the public ownership regulations.