Document Type



This paper was prepared by the author in fulfillment of the writing requirement in the Supervised Writing Class in Federal Corporate and Partnership Taxation class of. Prof. Edward A. Zelinsky, Visiting Professor, Cornell Law School, Spring 2004.


In comparing tax-free corporate reorganizations between Philippine and US law, the author wishes to learn how the US legal system would approach similar tax situations in the Philippines so he could apply it in the practice of law. Labyrinthine as they may be, US tax rules are so well-developed that they are excellent subjects for a comparative study. This paper validates the fact that Philippine and US tax laws on tax-free corporate exchanges have a lot in common. It also shows that in a lot of areas where Philippine law is silent, US tax laws have already devoted extensive treatment to such areas (i.e. spin-offs, triangular reorganizations, etc.). With respect to these areas, the issue is whether the principles developed therein are applicable to the Philippines.

In his book "De l'esprit des lois" ("Spirit of the Laws") , Montesquieu, the famous French political thinker, postulated that what makes a law effective is its "spirit," referring to the correct fit thereof to the conditions of the locality in which it would be applied. Communing with such spirit is thus seen as the goal of any law. Viewed in this light, determining the spirit of the aforementioned areas of law is the next logical issue. That could be very taxing but is definitely challenging.

Date of Authorship for this Version

May 2004


Philippines, Tax-Free Corporate Reorganizations