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Posted by / 22-Sep-2020 21:14

On the part of the liquidating corporation, it shall not be liable for income tax either on its transfer to the stockholders of the assets distributed in liquidation or for its receipt of the surrendered shares.In addition, no DST shall be due on the surrender by the stockholders of their shares in the liquidating corporation and the subsequent cancellation thereof.Some companies venture into dormancy prior to actual dissolution to wind down corporate affairs.It is helpful to distinguish dissolution from dormancy. Last year Tax Returns show Retaining Earnings of (27,000) and the Capital Account for Common Stock has $ 1,000. that has sold all of its assets and nothing else is remaining as assets other than pure cash.

• When there are creditors affected by the dissolution, a formal petition for dissolution shall be filed with the SEC, and notice and hearing will be duly conducted.If the recipient is an individual, the tax will be the zero percent to 32% scheduler rates or, in the case of a non-resident alien not engaged in business in the Philippines, 25%.However, if the recipient, whether corporate or individual, is a resident of a country with whom the Philippines has a tax treaty, exemption from income tax can be availed of based on treaty provisions on disposition of shares, provided the treaty conditions are complied with and the appropriate tax treaty relief application is filed within the period and under the conditions prescribed by law.Moreover, the ruling noted that the rulings previously cited in the request for confirmation are reversed and set aside.There was no discussion to guide taxpayers on how to treat liquidating dividends.

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