Dear AOT,

There is no present rule or jurisprudence on the applicability of a law in a transaction

which took place or in a document which was signed or made prior to its effectivity
date. However, the rule on non-retroactivity of the law may be applied. In the case of
CIR vs. Benguet Corporation, G.R. Nos. 134587 & 134588, July 8, 2005, the Court has
affirmed that the rulings, circular, rules and regulations promulgated by the CIR would
have no retroactive application if to so apply them would be prejudicial to the
taxpayers. It may be argued that in comparing the Old Tax Law from the TRAIN Law,
the former provides that the Capital gains from the sale of shares of stock not traded is
taxed at 5-10%; whereas in the latter, it is taxed at the rate of 15%, thus prejudicial to the
taxpayer. On the other hand, in the case of DST, both laws state the same. Since the
transaction took place and the pertinent document was notarized prior to the effectivity
date provided for by the new Tax Law, it may not apply.