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DOF and SEC Sign a Data sharing Agreement

Department of Finance and Securities and Exchange Commission Sign Data Sharing Agreement 

The Department of Finance (DOF) and the Securities and Exchange Commission (SEC) signed a memorandum of agreement (MOA) last 17 November 2014, allowing both parties to institutionalize data sharing and information exchange. As part of this undertaking, the SEC will share electronic copies of all basic company information and financial data contained in the General Information Sheets (GIS), as well as all financial data contained in the General Form for Financial Statements (GFFS), the Special Form for Financial Statements (SFFS), and the Audited Financial Statements (AFS).
The DOF intends to utilize available data for its internal use in order to enhance policy formulation, research, risk analysis and audit profiling of businesses. Before signing the agreement, Finance Secretary Cesar Purisima said, “We fully believe in using every tool and resource available in this digital age to enhance our government’s capacity to serve the Filipino people. Instant access to and effective management of information is critical to DOF’s mission to enable the country to stand on a stronger fiscal position, if only to use these resources to empower the least in our society to stand on their own as well.”
Effective starting this month, the agreement is expected to boost DOF knowledge management capacity, using data and information already available to the SEC for more responsive and effective policy development. The agreement also called for the procurement of a data processing service provider, as well as the copying and consolidation of up to 70,000 electronic submissions in 60 working days. SEC Chairperson Teresita Herbosa said, “We are delighted that information available to SEC can support the Department of Finance in carrying out their mandates and our shared responsibility to build a stronger, more resilient economy under a good governance framework.”
The SEC has jurisdiction and supervision over all corporations, partnerships, or associations which are the grantees of primary franchises, licenses, or permits issued by the Philippine Government. SEC is the repository of general registration information, of audited financial statements (AFS), other periodic and/or event-driven reports and disclosures required under the SRC, CCP, and other SEC-administered laws and regulations, such as general information sheets (GIS), and the general form for financial statements (GFFS)/special form for financial statements (SFFS). 
This joint undertaking of the SEC and DOF is supported by the USAID-funded project Facilitating Public Investment (FPI). FPI is working to facilitate the expansion of the “fiscal space” for public and private investment in the Philippines through higher tax revenue and public expenditure reforms. The SEC is under the administrative supervision of the DOF under Executive Order (EO) No. 37 dated 19 April 2011.
http://www.dof.gov.ph/?p=11291
Department of Finance (DOF) will have electronic copies of all basic company information and financial data.  It will be easier for Department of Finance (DOF) to analyze the data and see any discrepancies in SEC data compared to other agencies.  
Example no.1 General Information Sheets (GIS) is a document with a list of major stockholders of the corporation.  It will also show the amount of shares of stock a stockholder invested  in a corporation.  
If a stockholder invested in multiple corporations, he  or she should have proper documentation of all sources of his or her income.


RR 6-2013 Rules on the Taxation of Sale, Barter, Exchange or Other Disposition of Shares of Stock Held as Capital Assets




Definition of "fair market value" of the Shares of Stock. — For purposes of this Section, "fair market value" of the shares of stock sold shall be:

In the case of shares of stock not listed and traded in the local stock exchanges, the value of the shares of stock at the time of sale shall be the fair market value.

 In determining the value of the shares,

Before RR 6-2013, We don't have to appraise the property of the corporation before we sell the shares of stock.

 the appraised value of real property at the time of sale shall be the higher of –

 (1) The fair market value as determined by the Commissioner, or
 (2) The fair market value as shown in the schedule of valued fixed by the Provincial and City Assessors, or
 (3) The fair market value as determined by Independent Appraiser.

Two things Corporations should understand why BIR issued RR 6-2013

1.  If your Corporation  has an old building, using the fair market value of the old building as the basis of the tax on the sale of shares of stock - The tax may not be that big.

2.  If your Corporation has a land that is located in a prime location, the fair market value of the land will increase annually.  Having a high fair market value of the land as the basis of the tax on sale of shares of stock - The tax on the sale of shares of stock  is bigger compared to sale of shares of stock before the RR 6-2013
 
RR 6-2013 Rules on the  Taxation of Sale, Barter, Exchange or Other Disposition of Shares of Stock Held as Capital Assets

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