Transfer process for club shares simplified by BIR

THE Bureau of Internal Revenue (BIR) said it is streamlining the process for nominee transfers of proprietary club shares.

In a statement on Wednesday, the BIR said it issued Revenue Memorandum Circular 72-2026, clarifying the tax treatment of nominee transfers of proprietary club shares that do not involve any change in beneficial ownership.

The circular also seeks to remove the prior confirmatory ruling requirement for qualified transactions.

BIR Commissioner Charlito Martin R. Mendoza said the issuance aligns with the agency’s broader reform agenda, whose goals are to make processes simpler, more efficient and taxpayer-focused.

“By clarifying the proper tax treatment of these transactions and removing the need for a prior confirmatory ruling, we are reducing unnecessary administrative burden while ensuring that compliance continues to be verified through post-audit,” he said.

“This is another step towards making BIR processes simpler, more predictable, and easier to navigate,” he added.

According to the BIR, the circular covers proprietary club shares beneficially owned by a corporation but are registered in the names of corporate officers or other individuals acting only as nominees or trustees, consistent with club membership rules.

The circular clarifies that the transfer of club shares from one nominee to another while beneficial ownership remains with the corporation, is not considered a sale, exchange, or donation, and therefore not subject to capital gains tax, documentary stamp tax or donor’s tax.

However, the BIR said the streamlined treatment will only apply if there are no changes in the beneficial ownership and no monetary or non-monetary consideration is given to either the outgoing or incoming nominee.

With the new circular in place, pending requests for confirmatory rulings for such transactions will no longer be acted upon, with the taxpayers told to process directly their electronic certificate authorizing registration.

“Simplifying a process does not mean relaxing compliance. We are making it easier for taxpayers to complete legitimate transactions without compromising the integrity of tax administration,” Mr. Mendoza said.

“The Bureau will continue to ensure compliance through documentary requirements and post-audit verification,” he added. — Justine Irish D. Tabile