By Benjamin Cuaresma
MANILA — The Bureau of Internal Revenue (BIR) has eased the processing of certain corporate proprietary club share transfers by clarifying that nominee-to-nominee transfers involving no change in beneficial ownership are not taxable and no longer require a prior confirmatory ruling from the agency.
The new policy is contained in Revenue Memorandum Circular (RMC) No. 72-2026, issued on June 30, as part of the BIR’s continuing effort to simplify tax compliance while maintaining safeguards against abuse.
Under the circular, proprietary club shares that are beneficially owned by a corporation but registered in the names of corporate officers or other individuals acting merely as nominees or trustees will not be treated as taxable transactions when transferred from one nominee to another.
The BIR explained that because beneficial ownership remains with the corporation, such transfers do not constitute a sale, exchange, or donation.
As a result, these transactions are not subject to Capital Gains Tax (CGT), Documentary Stamp Tax (DST), or Donor’s Tax.
The policy recognizes the common practice among private clubs of requiring memberships to be registered under the name of a natural person even when the actual owner is a corporation.
The simplified tax treatment applies only when several requirements are satisfied, including:
The corporation remains the beneficial owner of the proprietary club share.
The registered nominee merely holds legal title under a Declaration of Trust or Trust Agreement.
The proprietary club share is properly recorded as a corporate asset.
No monetary or non-monetary consideration is given to either the outgoing or incoming nominee.
All required supporting documents are submitted to the BIR.
The Bureau emphasized that transactions failing to meet these conditions may still be subject to the applicable tax laws.
One of the most significant changes introduced by the circular is the removal of the requirement to obtain a prior confirmatory ruling from the BIR before processing qualified transfers.
Pending requests for such rulings will no longer be acted upon.
Instead, taxpayers may proceed directly to the appropriate Revenue District Office (RDO) to secure an electronic Certificate Authorizing Registration (eCAR), significantly shortening processing time.
BIR Commissioner Charlito Mendoza said the revised policy is intended to make tax administration more efficient while reducing unnecessary paperwork for taxpayers.
“Clearer rules lead to more efficient tax administration and greater peace of mind for taxpayers. 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,” Mendoza said.
He stressed that simplifying procedures does not mean weakening tax enforcement.
“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. The Bureau will continue to ensure compliance through documentary requirements and post-audit verification,” he added.
The issuance of RMC No. 72-2026 forms part of the BIR’s ongoing modernization and ease-of-doing-business initiatives aimed at reducing bureaucratic delays, promoting voluntary tax compliance, and providing greater clarity on transactions that do not result in any actual transfer of ownership.
The Bureau said the new guidelines are expected to benefit corporations that maintain proprietary club memberships while ensuring that legitimate transactions are processed more efficiently without sacrificing transparency or accountability.
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