Article 51p. 51

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

Philippines and said exhibitions are promoted by a

citizen/s of the Philippines or by a corporation or

association at least sixty percent (60%) of the capital

of which is owned by such citizens;

(d) Fifteen percent (15%) in the case of professional

basketball

games

as

envisioned

in

Presidential

Decree No. 871: Provided, however, That the tax

herein shall be in lieu of all other percentage taxes of

whatever nature and description; and

(e) Thirty percent (30%) in the case of Jai-Alai and

racetracks - of their gross receipts, irrespective, of

whether

or

not

any

amount

is

charged

for

admission.

For the purpose of the amusement tax, the term ' gross

receipts ' embraces all the receipts of the proprietor,

lessee or operator of the amusement place. Said gross

receipts also include income from television, radio and

motion picture rights, if any. A person or entity or

association conducting any activity subject to the tax

herein imposed shall be similarly liable for said tax with

respect to such portion of the receipts derived by him or

it.

The taxes imposed herein shall be payable at the end of

each quarter and it shall be the duty of the proprietor,

lessee or operator concerned, as well as any party liable,

within twenty (20) days after the end of each quarter, to

make a true and complete return of the amount of the

gross receipts derived during the preceding quarter and

pay the tax due thereon.

SEC. 126. Tax on Winnings. - Every person who wins in

horse races shall pay a tax equivalent to ten percent (10%)

of his winnings or ' dividends ', the tax to be based on the

actual amount paid to him for every winning ticket after

deducting the cost of the ticket: Provided, That in the

case

of winnings from double, forecast/quinella and

trifecta bets, the tax shall be four percent (4%). In the case

of owners of winning race horses, the tax shall be ten

percent (10%) of the prizes.

The tax herein prescribed shall be deducted from the

' dividends ' corresponding to each winning ticket or the

' prize ' of each winning race horse owner and withheld by

the operator, manager or person in charge of the horse

races before paying the dividends or prizes to the persons

entitled thereto.

The operator, manager or person in charge of horse races

shall, within twenty (20) days from the date the tax was

deducted and withheld in accordance with the second

paragraph hereof, file a true and correct return with the

Commissioner in the manner or form to be prescribed by

the Secretary of Finance, and pay within the same period

the total amount of tax so deducted and withheld.

SEC. 127. Tax on Sale, Barter or Exchange of Shares of

Stock Listed and Traded through the Local Stock

Exchange or through Initial Public Offering. -

(A) Tax on Sale, Barter or Exchange of Shares of Stock

Listed and Traded through the Local Stock Exchange. -

There shall be levied, assessed and collected on every

sale, barter, exchange, or other disposition of shares of

stock listed and traded through the local stock exchange

other than the sale by a dealer in securities, a tax at the

rate of six-tenths of one percent (6/10 of 1%) of the gross

selling price or gross value in money of the shares of stock

sold, bartered, exchanged or otherwise disposed which

shall be paid by the seller or transferor. (as amended by

RA No 10963)

(B) Tax on Shares of Stock Sold or Exchanged Through

Initial Public Offering. - There shall be levied, assessed

and collected on every sale, barter, exchange or other

disposition through initial public offering of shares of

stock in closely held corporations, as defined herein, a tax

at the rates provided hereunder based on the gross

selling price or gross value in money of the shares of stock

sold,

bartered,

exchanged

or

otherwise

disposed

in

accordance with the proportion of shares of stock sold,

bartered, exchanged or otherwise disposed to the total

outstanding shares of stock after the listing in the local

stock exchange:

Up to twenty-five percent (25%)

Over

twenty-five

percent

(25%)

but not over

thirty-three and one third percent (33 1 / 3 %)

Over thirty-three and one third percent (33 1 / 3 %)

4%

2%

1%

The tax herein imposed shall be paid by the issuing

corporation

in

primary

offering

or

by

the

seller

in

secondary offering.

For purposes of this Section, the term ' closely held

corporation ' means any corporation at least fifty percent

(50%) in value of outstanding capital stock or at least fifty

percent (50%) of the total combined voting power of all

classes of stock entitled to vote is owned directly or

indirectly by or for not more than twenty (20) individuals.

For purposes of determining whether the corporation is a

closely held corporation, insofar as such determination is

based on stock ownership, the following rules shall be

applied:

(1) Stock Not Owned by Individuals. - Stock owned

directly

or

indirectly

by

or

for

a

corporation,

partnership, estate or trust shall be considered as

being owned proportionately by its shareholders,

partners or beneficiaries.

(2)

Family

and

Partnership

Ownerships.

- An

individual shall be considered as owning the stock

owned, directly or indirectly, by or for his family, or by

or for his partner. For purposes of the paragraph, the

' family of an individual ' includes only his brothers

and sisters (whether by whole or half-blood), spouse,

ancestors and lineal descendants.

(3) Option. - If any person has an option acquire

stock, such stock shall be considered as owned by

such person. For purposes of this paragraph, an

option to acquire such an option and each one of a

series of options shall be considered as an option to

acquire such stock.

(4) Constructive Ownership as Actual Ownership.

-

Stock

constructively owned by reason of the

application of paragraph (1) or (3) hereof shall, for

purposes of applying paragraph (1) or (2), be treated

as

actually

owned

by

such

person;

but

stock

constructively owned by the individual by reason of

the application of paragraph (2) hereof shall not be

treated as owned by him for purposes of again

applying such paragraph in order to make another

the constructive owner of such stock.

(C) Return on Capital Gains Realized from Sale of

Shares of Stocks. -

(1) Return on Capital Gains Realized from Sale of

Shares of Stock Listed and Traded in the Local

Stock Exchange. - It shall be the duty of every stock

broker who effected the sale subject to the tax

imposed herein to collect the tax and remit the

same to the Bureau of Internal Revenue within five

(5) banking days from the date of collection thereof

and to submit on Mondays of each week to the

secretary of the stock exchange, of which he is a

member, a true and complete return which shall

contain a declaration of all the transactions effected

through him during the preceding week and of

taxes collected by him and turned over to the

Bureau Of Internal Revenue.

(2) Return on Public Offerings of Shares of Stock.

- In case of primary offering, the corporate issuer

shall file the return and pay the corresponding tax

within thirty (30) days from the date of listing of the

shares of stock in the local stock exchange. In the

case

of

secondary

offering,

the

provision

of

Subsection (C) (1) of this Section shall apply as to the

time and manner of the payment of the tax.

(D) Common Provisions. - any gain derived from the sale,

barter, exchange or other disposition of shares of stock

under this Section shall be exempt from the tax imposed

© Compiled by RGL

51 of 201