DOCUMENTARY STAMP TA
Q: What are the implications of failure to stamp taxable documents?
The untaxed document will not be recorded, nor will it or any copy thereof or any record of transfer of the same be admitted or used in evidence in court until the requisite stamp or stamps have been affixed thereto and cancelled No notary public or other officer authorized to
administer oaths will add his jurat or acknowledgment to any document subject to Documentary Stamp Tax unless the proper documentary stamps are affixed thereto and cancelled
TAX RATES APPLICABLE (1997 NIRC, as amended by RA 9243 [2004])
Document Taxable Unit Tax Due Per Unit Taxable Base
Debentures and
Certificates of
Indebtedness DELETED by RA 9243
Original Issue of Shares of Stock with par value9
Original Issue of Shares of Stock without par value Stock Dividends P200.00 or fraction thereof P200.00 or fraction thereof P200.00 or fraction thereof 1.00 1.00 1.00
Par value of shares of stocks
actual consideration for the issuance of shares of stocks
Actual value represented by each share Sales, Agreements to Sell, Memoranda of Sales, Deliveries or Transfer of Due-bills, Certificate of Obligation, or Shares or Certificates of Stock10
In the case of stocks without par value
P200.00 or fraction
thereof 0.75
25% of the DST paid upon the original issue of said stock
Par value of such due-bills, certificate of obligation or stocks
Bonds, Debentures, Certificate of Stock or Indebtedness issued in foreign Countries
P200.00 or fraction
thereof 1.50 Par debentures or Certificate of Stocks value of such bonds,
Certificate of Profits or Interest in Property or Accumulation
P200.00 or fraction
thereof 0.50 Face value of such certificate / memorandum Bank Checks, Drafts,
Certificate of Deposit not bearing interest and other Instruments
On each Document 1.50
Original issue of debt instruments
For such debt
instruments with terms of less than one year
P200.00 or fraction thereof 1.00 Shall be of a proportional amount in accordance with the ration of its term in number of days to 365 days
Issue price of any such debt instrument
Bills of exchange (between points within the Philippines) and drafts
P200.00 or fraction
thereof .30 Face value of the bill of exchange or draft
Bills of Exchange or order drawn in foreign country but payable in the Philippines
P200.00 or fraction
thereof .30 Face value of such bill of exchange or order or the equivalent of such value, if expressed in foreign currency
Foreign Bills of Exchange P200.00 or fraction .30 Face value of such bill of exchange
9When are shares considered issued? Upon the acquisition of the stockholder of the attributes of ownership over the shares (the right to vote, the right to receive dividends, the right to dispose, etc., notwithstanding that restrictions on the exercise of any of these rights may be imposed by the Corporation’s Articles and/or by-laws, the SEC, stockholder agreement, court order, etc.) which acquisition of such attributes of ownership shall be manifested by the acceptance by the Corporation of the stockholder’s subscription to its shares of stock. The delivery of the certificates of stock to the stockholders is NOT essential for the DST to accrue. [RR 13-2004]
What is the basis of DST? The entire shares of stock subscribed are considered issued for purposes of DST, even if not fully paid.
[RR 13-2004]
10When is a sale or exchange of shares taxable? There must be actual or constructive transfer of beneficial ownership of shares of stock from one person to another. This may be manifested by:
a) the clear exercise of attributes of ownership over such stocks by the transferee, or
b) by an actual entry of a change in the name appearing in the certificate of stock or in the stock and transfer book of the corporation or by any entry indicating transfer of beneficial ownership in any form of registry including those of a duly authorized scripless registry, such as those maintained for or by the Philippine Stock Exchange. [RR 13-2004]
and Letter of Credit thereof or order or the equivalent of such value, if expressed in foreign currency
Life Insurance Policies P200.00 or fraction
thereof .50 Amount of premium collected
Policies Of Insurance
upon Property P4.00 premium or fraction thereof .50 Premium charged Fidelity Bonds and other
Insurance Policies P4.00 premium or fraction thereof .50 Premium charged Policies of Annuities,
Annuity or other instruments
P200.00 or fraction
thereof 0.50 Amount of premium or installment payment of contract price collected Pre-Need Plans P200.00 or fraction
thereof .20 Premium or contribution collected
Indemnity Bonds P4.00 or fraction
thereof .30 Premium charged
Certificates of Damage or otherwise and Certificate or document issued by any customs officers, marine surveyor, notary public and certificate required by law or by rules and regulations of a public office
Each Certificate 15.00
Warehouse Receipts (except if value does not exceed P200.00)
Each Receipt 15.00
Jai-alai, Horse Race Tickets, lotto or Other Authorized Number Games P1.00 cost of ticket and Additional P0.10 on every P1.00 or fraction thereof if cost of ticket exceeds P1.00
.10 Cost of the ticket
Bills of Lading or Receipts
(except charter party) >P100 not > P1000 >P1000
1.00 10.00
Proxies Each Proxy 15.00
Powers of Attorney Each Document 5.00 Lease and other Hiring
agreements of
memorandum or contract for hire, use or rent of any land or tenements or portions thereof
First 2,000
For every P1,000 or fractional part thereof in excess of the first P2,000 for each year of the term of the contract or agreement
3.00 1.00
Mortgages Pledges of lands, estate, or property and Deeds of Trust
First 5,000 On each P5,000 or fractional part thereof in excess of 5,000 20.00
10.00 Amount Secured Amount Secured
Deed of Sale, instrument or writing and Conveyances of Real Property (except grants, patents or original certificate of the government)
First 1,000
For each additional P1,000 or fractional part thereof in excess of P1,000
15.00
15.00 Consideration or Fair Market Value, whichever is higher (if government is a party, basis shall be the consideration)
Charter parties and
Similar Instruments 1,000 below tons and
1,001 to 10,000 tons P500.00 for the first 6 months PlusP50 each month or fraction thereof in excess of 6 months P1,000 for the
Tonnage and duration of the contract
Over 10,000 tons first 6 months Plus P100 each month or fraction thereof in excess of 6 months P1,500 for the first 6 months Plus P150 each month or fraction thereof in excess of 6 months Assignment or transfer of
any mortgage, lease or policy of insurance
Renewal of any agreement/ contract
At the same rate as that imposed on the original instrument
Documents and Papers Not Subject to Stamp Tax a. Policies of insurance or annuities made or
granted by a fraternal or beneficiary society, order, association or cooperative company, operated on the lodge system or local cooperation plan and organized and conducted solely by the members thereof for the exclusive benefit of each member and not for profit.
b. Certificates of oaths administered to any government official in his official capacity or of acknowledgment by any government official in the performance of his official duties, written appearance in any court by any government official, in his official capacity; certificates of the administration of oaths to any person as to the authenticity of any paper required to be filed in court by any person or party thereto, whether the proceedings be civil or criminal; papers and documents filed in courts by or for the national, provincial, city or municipal governments; affidavits of poor persons for the purpose of proving poverty; statements and other compulsory information required of persons or corporations by the rules and regulations of the national, provincial, city or municipal governments exclusively for statistical purposes and which are wholly for the use of the bureau or office in which they are filed, and not at the instance or for the use or benefit of the person filing them; certified copies and other certificates placed upon documents, instruments and papers for the national, provincial, city or municipal governments, made at the instance and for the sole use of some other branch of the national, provincial, city or municipal governments; and certificates of the assessed value of lands, not exceeding Two hundred pesos (P200) in value assessed, furnished by the provincial, city or municipal Treasurer to applicants for registration of title to land. c. Borrowing and lending of securities executed
under the Securities Borrowing and lending Program of a registered exchange, or in accordance with regulations prescribed by the appropriate regulatory authority: Provided,
however, That any borrowing or lending of
securities agreement as contemplated hereof shall be duly covered by a master securities borrowing and lending agreement acceptable to the appropriate regulatory authority, and which agreements is duly registered and approved by the Bureau of Internal Revenue. (BIR).
d. Loan agreements or promissory notes, the aggregate of which does not exceed Two hundred fifty thousand pesos (P250,000), or any such amount as may be determined by he Secretary of Finance, executed by an individual for his purchase on installment for his personal use or that of his family and not for business or resale, barter or hire of a house, lot, motor vehicle, appliance or furniture: Provided, however, That the amount to be set by the Secretary of Finance shall be in accordance with a relevant price
index but not to exceed ten percent (10%) of the current amount and shall remain in force at least for three (3) years.
e. Sale, barter or exchange of shares of stock listed and traded through the local stock exchange for a period of five (5) years from the effectivity of this Act.
f. Assignment or transfer of any mortgage, lease or policy of insurance, or the renewal or continuance of any agreement, contract, charter, or any evidence of obligation or indebtedness, if there is no change in the maturity date or remaining period of coverage from that of the original instrument. g. Fixed income and other securities traded in
the secondary market or through an exchange.
h. Derivatives: Provided, That for purposes of this exemption, repurchase agreements and reverse repurchase agreements shall be treated similarly as derivatives.
i. Interbranch or interdepartmental advances within the same legal entity.
j. All forebearances arising from sales or service contracts including credit card and trade receivables: Provided, That the exemption be limited to those executed by the seller or service provider itself.
k. Bank deposit accounts without a fixed term or maturity.
l. All contracts, deeds, documents and transactions related to the conduct of business of the Banko Sentral ng Pilipinas. m. Transfer of property pursuant to Section
40(c)(2) of the National Internal Revenue Code of 1997, as amended.
n. Interbank call loans with maturity of not more than seven (7) days to cover deficiency in reserves against deposit liabilities, including those between or among banks and quasibanks.
One-Transaction Rule:
Where only one instrument was prepared, made signed and executed to cover a loan agreement/promissory note, pledge/mortgage, the documentary stamp tax shall be paid and computed on the full amount of the loan or credit granted. In this regard, the instrument shall be treated as covering only one taxable transaction, subject to the higher documentary stamp tax. (RR 9-94, Sec. 8)
Payment of Documentary Stamp Tax (Sec 200)
WHERE: filed and paid at
authorized agent bank within territorial jurisdiction of Revenue District Officer which had jurisdiction over residence or principal place of business of taxpayer
Revenue District Officer, collection agent, duly authorized treasurer of municipality or city where the taxpayer has his residence or principal place of business
EXCEPTION:
Tax may be paid thru purchase and actual affixture or imprinting the stamp thru documentary stamp metering machine as prescribed by the pertinent rules and regulations. WHEN:
5 days after close of the month when the taxable document was made, signed issued, transferred or accepted. (RR 6-01) [Note: 10-day rule provided in Sec. 200(B) of the NIRC no longer applicable)
Applicability of DST Law on Electronic Documents:
The DST rates shall be applicable on all documents not otherwise expressly exempted by the law, notwithstanding that they are in electronic form. As provided for in RA 8792 (Electronic Commerce Act), electronic documents are the functional equivalent of a written document under existing laws, and the issuance thereof is therefore tantamount to the issuance of a written document, and therefore subject to DST. (RR 13-04, Sec. 10)
REMEDIES
STAGES IN BIR AUDIT EXAMINATION
(Framework of discussion)
Audit Stage/Issuance of Letter of Authority
Pre-Assessment Stage
Formal Assessment Stage
Collection Letter/Warrants
Compromise and Abatement
I. AUDIT STAGE (Issuance of Letter of Authority)
A. Powers of the Commissioner Relative to