BIR Ruling No.

113-94

Goldward Resources requests for tax
consequences in the export of gold
ingots in relation to Central Bank
Circular No. 1389 dated April 13,
1989. The circular states that, Gold in
any form can be exported without
need of any permit or clearance from
the Central Bank. Likewise, no taxes
are required in the export of the
aforementioned commodity.

BIR: Gold ingots are produced only by
mining companies engaged in the
integrated activity of quarrying andf
processing mineral ores.

When gold ingots are sold to the
Central Bank, these are subject to
10% VAT based on the gross selling
price at the time of the sale. The sale
of gold to the Central Bank is not an
export sale. However, if the gold
ingots are actually exported by the
mining company or by the producer
thereof, it is zero-rated.

Note: Gold ingots are also subject to
5% excise tax.

BIR Ruling No. 063-93

This is a ruling on the tax consequence
on the merger of State Land
Investment Corporation (SLIC),
Stateland Realty Development
Corporation (SLRDC) and Stronghold
Realty Development Corporation
(STRDC). All are domestic corporations
engaged in real estate business.

For the purpose of consolidating their
operations in order to ensure their
viability and competitiveness and to
realize economies in operation, a Plan
of Merger was executed. SLIC will
become the surviving corporation, and
SLRDC and STRDC will be the
absorbed corporations. In exchange
for the transfer of the absorbed
corporations to SLIC of their assets
and liabilities, SLIC will issue shares to
all stockholders of SLRDC and STRDC.

BIR confirmed that the reorganization
of the corporations was considered a
merger and for VAT purposes:
1) the transfer of the assets,
including tangible and movable
properties, by SLRDC and
STRDC to SLIC pursuant to the
merger will not be subject to
any output tax; and
2) any unused input tax of SLRDC
and STRDC as of the effective
date of the merger, will be
absorbed by SLIC as the
surviving corporation.

This is in accordance with Section
5(b)(3) of RR No. 5-87.