REVENUE REGULATIONS NO. 16-2012 issued on December 7, 2012 prescribes the tax treatment of sales, barters, exchanges or other dispositions of shares of stock of publicly-listed companies whose public ownership levels fall below the mandatory Minimum Public Ownership (MPO) level, monitoring of these companies and their stock transactions, and amending Revenue Regulations (RR) No. 06-08 for the purpose. All publicly-listed companies are required, at all times, to maintain a minimum percentage of listed securities held by the public (or “public float”) of the higher rate of 10% of the publicly-listed companies’ issued and outstanding shares, exclusive of any treasury shares or at such percentage as may be prescribed by the Securities and Exchange Commission (SEC) or Philippine Stock Exchange (PSE). Publicly-listed companies which are non-compliant with the MPO as of December 31, 2011 and those whose public ownership levels subsequently fall below the above-mentioned MPO level at any time prior to December 31, 2012 may be allowed up to December 31, 2012 to comply with the MPO. The sale, barter, transfer and/or assignment of publicly-listed companies that still fail to meet the MPO after the lapse of the grace period shall be subject to final tax at the rate of 5% or 10% on the net capital gains imposed under Sections 24(C), 25(A)(3), 25(B), 27(D)(2), 28(A)(7)(c), and 28(B)(5)(c) of the National Internal Revenue Code (NIRC), as amended and the Documentary Stamp Tax (DST). There shall be levied, assessed and collected the following taxes on every sale, barter, exchange or other disposition of shares of stock of a publicly-listed company which is noncompliant with the MPO: a. For transactions up to December 31, 2012 under the Amended MPO Rule – a stock transaction tax at the rate of ½ of 1% of the gross selling price or gross value in money of the shares of stock imposed under Section 127(A) of the NIRC, as amended. b. For transactions after December 31, 2012 – a final tax at either 5% or 10% on the net capital gains imposed under Sections 24(C), 25(A)(3), 25(B), 27(D)(2), 28(A)(7)(c) and 28(B)(5)(c) of the NIRC, as amended. The taxes imposed herein shall not apply to the following: a. Dealers in securities provided that, they shall be subject to Value-Added Tax (VAT) on the basis of their gross receipts and Income Tax from their sale or exchange of securities. b. Investors in shares of stock in a mutual fund company in connection with the gains realized by said investor upon redemption of said shares of stock in a mutual fund company pursuant to Section 32(B)(7)(h) of the NIRC; and c. All other persons, whether natural or juridical, who are specifically exempt from national internal revenue taxes under existing investment incentives and other special laws. The transfers of shares of stocks under Section 2(B) of the Regulations are subject to DST imposed under Section 175 of the NIRC, as amended, as implemented by RR No. 13-2004, upon execution of the deed transferring ownership or rights thereto, or upon delivery, assignment or indorsement of such shares in favor of another. No transfer of shares of stock shall be recorded unless DST thereon has been duly paid for in accordance with Section 200 of the NIRC, as amended. No sale, exchange, transfer or similar transaction intended to convey ownership of, or title to any share of stock shall be registered in the books of the corporation unless the receipts of payment of the taxes herein imposed in the instances herein specified and the Certificate Authorizing Registration (CAR) and/or Tax Clearance Certificate (TCL) under pertinent RR and issuances are filed with and recorded by the stock transfer agent or secretary of the corporation. It shall be the duty of the aforesaid persons to inform the BIR any case of non-payment of tax. For proper monitoring of the compliance of these Regulations, the lists and reports specified in the Regulations shall be forwarded to the BIR National Office, through the Office of the Assistant Commissioner, Large Taxpayers Service. The following shall be punished in accordance with the provisions of Title X, Chapters I and II of the NIRC, as amended: a. Any stock transfer agent or secretary of the corporation or the stockbroker who caused the registration of transfer of ownership or title on any share of stock without having been furnished with the receipts of the payment of the taxes due and corresponding CAR/TCL and/or has recorded the same b. Any responsible director, corporate officer, partner or employee who fails to submit the reports required under these Regulations