TFA was appointed by two entities with separate ownership groups to dispose of their adjacent lots. The properties had been on the market for almost a year when TFA entered the picture. Part of the initial stage of the engagement was to identify the most tax-efficient mode of disposition. In this particular case, a sale of shares of stock in the ownership companies saved up to 10% of taxes on the transaction. The savings were mostly absorbed by the sellers, but some passed onto the buyer as the effective selling price was able to be reduced due to the overall tax savings.
TFA blanketed the local developers as well as some regional developers in the marketing campaign, as there were a number of Korean, Chinese, and Japanese developers that showed serious interest when properly engaged. TFA was able to secure written proposals from two overseas developers who were looking for their first projects in the Philippines.
The extensive reach of the marketing campaign proved to be successful as a Cebu based developer ultimately purchased the property. Further, TFA was well prepared in walking both the sellers and the buyer through the share sale process.
Probably the biggest hurdle that TFA cleared in this transaction was in processing 12 separate share sale transactions with the transferors’ respective BIR regional district offices. This lengthy procedure entailed significant discussions with each RDO to compel them to uphold the correct tax basis, given that both the client and TFA share a rigid anti-corruption stance when dealing with government agencies.