The Bureau of Internal Revenue (BIR) has eased rules on proprietary club share transfers, clarifying that nominee-to-nominee changes with no shift in beneficial ownership are not subject to Capital Gains, Documentary Stamp, or Donor’s Tax, and can proceed without a prior confirmatory tax ruling under RMC 72-2026.
The Bureau of Internal Revenue (BIR) has removed a major administrative hurdle for certain proprietary club share transfers, allowing qualified transactions involving nominee changes to proceed without securing a prior confirmatory tax ruling.
Under Revenue Memorandum Circular (RMC) No. 72-2026 issued on 30 June, the BIR clarified that transfers of proprietary club shares between nominees are not taxable when there is no change in the actual beneficial owner.
BIR Commissioner Charlito Martin R. Mendoza said the policy shift is part of the agency’s BIR DARES initiative, which aims to simplify procedures, improve efficiency, and make tax compliance easier 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. This is another step toward making BIR processes simpler, more predictable, and easier to navigate,” Mendoza said.
The new guidelines apply to proprietary club shares owned by corporations but registered under the names of corporate officers or other individuals acting only as nominees or trustees, a practice allowed by some clubs that require memberships to be held under a natural person’s name.
The BIR said a transfer from one nominee to another will not be treated as a sale, exchange, or donation if the corporation remains the beneficial owner of the share. As a result, the transaction will not be subject to Capital Gains Tax, Documentary Stamp Tax, or Donor’s Tax.
To qualify for the simplified tax treatment, corporations must prove that they continue to own the shares beneficially, that nominees hold legal title through a Declaration of Trust or Trust Agreement, and that the shares remain recorded as corporate assets. The transfer must also involve no payment or consideration between the outgoing and incoming nominees.
The circular also eliminates pending requests for confirmatory rulings on these transactions. Instead, taxpayers may directly process the electronic Certificate Authorizing Registration (eCAR) through the appropriate Revenue District Office once documentary requirements are completed.
“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,” Mendoza said.
The BIR said the updated policy is intended to reduce processing delays while maintaining safeguards against improper transfers and ensuring that tax obligations are properly monitored.
