Tax 3 Chapter 14 Documentary Stamp Tax

Documentary Stamp Tax

- It is a tax levied on documents, instruments, loan agreements and papers
evidencing the acceptance, assignment, sale or transfer of an obligation, rights,
or property incident thereto.

Nature of Documentary Stamp Tax

- It is in the nature of an excise tax.

Basic Feature of DST

1. It is generally a tax on document;
2. It is due independently of the legal status of the transaction giving rise to the
document or instrument;
3. It is due where the obligation or right arises from the Philippines or the property
is located within the Philippines; and
4. It is only payable by persons and on transactions specifically mentioned in the
law.

Liability to pay DST

DST is paid by the person making, signing, issuing, accepting or transferring
documents. However, whenever one party to the taxable documents enjoys exemption
from the tax, the other party thereto who is not exempt shall be the one directly liable
for the tax. 

Time of Filing and Payment of DST

 The return shall be filed within five (5) days after the close of the month when
the taxable document was made, signed, issued, accepted or transferred or
upon remittance by revenue collection agents of collection from the sale of loose
documentary stamps.

Where to file
 The return shall be filed with the Authorized Agent Bank (AAB) within the
territorial jurisdiction of the Revenue District Office where the residence or
place of business of the taxpayer is located or where the collection agent is
assigned. In places where there are no AABs, the return shall be filed directly
with the Revenue Collection Officer (RCO) within the Revenue District Office
which has jurisdiction over the residence or place of business of the taxpayer or
where the collection agent is assigned.

Effect of  Failure to pay DST

 Failure to stamp a taxable document shall not invalidate the same.

 However, it shall not be recorded or admitted or used as evidence in any court
until the requisite stamp is affixed thereto and canceled.
 No notary or other officer authorized to administer oaths shall add his jurat or
acknowledgment to the document unless the proper documentary stamp is
affixed thereto and canceled.

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Tax Document Taxable Due/Rate

Code
Section

174
Original Issue of P2.00 per 200.00 or fraction thereof , or 1% of:
Shares of Stock  Par value of shares of stocks
with par value
Original Issue of
Shares

of Stock without  Actual consideration for the issuance of

par value shares of stocks

Stock Dividend  Actual value represented by each share

175 Sales,
Agreements to P1.50 per 200.00 or fraction thereof , or 0.75% of
Sell, Memoranda Par value of shares of stocks
of Sales,
Deliveries or
Transfer of
Shares or
Certificates of
Stock

With par value

Stock without  50% of the DST paid on the original issue

par value of the stock

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176
Bonds, P.075 per P200.00 or fraction thereof , or 0.375%
Debentures, of par value
Certificate of
Stock or
Indebtedness
issued in foreign
Countries

177
Certificate of P1.00 per P200.00 or fraction thereof , or 0.5%of
Profits or Interest face value
in Property or
Accumulation

178 Bank Checks,

P3.00 per check, draft or certificate
Drafts, Certificate
of Deposit not
bearing interest
and other
Instruments

179 P1.50 per 200.00 or fraction thereof , or 0.75% of

All Debt the issue price
Instruments

180 P0.60 per 200.00 or fraction thereof , or 0.30% of

All Bills of the face value
Exchange or
Drafts

181 P0.60 per 200.00 or fraction thereof , or 0.30% of

Acceptance of the face value
Bills of Exchange
or order for the
payment of
money purporting
to be drawn in a

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foreign country
but payable in
the Philippines

182 P0.60 per 200.00 or fraction thereof , or 0.30% of

Foreign Bills of the face value
Exchange and
Letters of Credit

183 Life Insurance

Policies

If the amount of  Exempt

insurance does
not exceed
P100,000.00

If the amount of  P20.00

insurance
exceeds
P100,000.00 but
does not exceed
P300,000.00

If the amount of  P50.00

insurance
exceeds
P300,000.00 but
does not exceed
P500,000.00

If the amount of  P100.00

insurance
exceeds
P500,000.00 but

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does not exceed

P750,000.00

If the amount of  P150.00

insurance
exceeds
P750,000.00 but
does not exceed
P1,000,000.00

If the amount of
insurance  P200.00
exceeds
P1,000,000.00

184 Policies Of
Insurance upon P0.50 on each P4.00 premium or fraction thereof
Property or 12.5% of premium charged

185 Fidelity Bonds P0.50 on each P4.00 premium or fraction thereof

and other or 12.5% of premium charged
Insurance
Policies

186 Policies of P1.00 per P200.00 or fraction thereof , or 0.5%of

Annuities or the premium or installment payment or contract
other price collected.
instruments

Pre-Need Plans P0.40 per P200 or fraction thereof or 0.20% of the

premium or contribution collected

187 Indemnity Bonds P0.30 on each P4.00 premium or fraction thereof

or 7.5% of premium charged

188 P30.00 each certificarte

Certificates of
Damage or
otherwise and

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Tax 3 Chapter 14 Documentary Stamp Tax

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

189
Warehouse P0.20/ticket worth P1.00 and additional P0.20 for
Receipts (except if each P1.00 in excess of P1.00 of ticket
value does not
exceed P200.00)

190
Jai-alai, Horse P1.00 and below cost of ticket
Race Tickets,
lotto or Other And
Authorized
Number Games Additional P0.20 on every P1.00 or fraction thereof
if cost of ticket exceeds P1.00

191 Bills of Lading or

Receipts(except
charter party)

If the value of  P2.00

such goods
exceeds P100.00
and does not
exceed P1,000.00

If the value  20.00

exceeds
P1,000.00

Freight tickets  Exempt

covering goods,

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merchandise or
effects carried as
accompanied
baggage of
passengers on
land and water
carriers primarily
engaged in the
transportation of
passengers

192
Proxies (except P30.00 each proxy
proxies issued
affecting the
affairs of
associations or
corporations,
organized for
religious,
charitable or
literary purposes)

193
Powers of P10.00 each document
Attorney (except
acts connected
with the
collection of
claims due from
or accruing to the
Government of
the Republic of
the Philippines,
or the
government of
any province, city
or Municipality)

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194
Leases and other P6.00 for the first P2,000 or fractional part
Hiring thereof,
agreements or
memorandum or
contract for hire, And additional P2.00 for every P1,000 or
use or rent of any fractional part thereof in excess of the first
lands or P2,000 for each year of the term of the said
tenements or contract or agreement
portions thereof

195
Mortgage or
Pledge of lands,
estate, or
property and
Deeds of Trust

First 5,000 or
less  P40.00 or .08% of the amount secured

On each P5,000  P20.00 or 0.4% of the amount secured

or fractional part
thereof in excess
of 5,000

196
Deed of Sale,
Conveyances,
Donations of Real
Property (except
grants, patents or
original certificate
of adjudication
issued by the
government)

Consideration is
1,000 or less P15.00 or 1.5% of consideration or FMV,
whichever is higher (if government is a party,

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basis shall be the consideration)

For each P15.00 or 1.5% of consideration or FMV whichever

additional P1,000 is higher (if government is a party, basis shall be
or fractional part the consideration)
thereof in excess
of P1,000

197
Charter parties
and similar
instruments if
gross tonnage of
the ship, vessel
or steamer is:

1,000 tons and  P1,000 and additional P100.00/month in

below excess of 6 months

1,001 to 10,000  P2,000 and additional P200.00/month in

tons excess of 6 months

Over 10,000 tons

 P3,000 and additional P300.00/month in
excess of 6 months

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198 Stamp Tax on At the same rate as that of the original

Assignments and instruments.
Renewals or
Continuance of
Certain
Instruments

Transactions and Documents Not Subject to Stamp Tax

1. 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
2. Certificates of oaths administered by any government official in his official
capacity or acknowledgement by any government official in performance of his
official duty
3. Written appearance in any court by any government official in his official
capacity
4. 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
5. Papers and documents filed in court by or for the national, provincial, city or
municipal governments
6. Affidavits of poor persons for the purpose of proving poverty
7. Statements and other compulsory information required of persons or
corporations by the rules and regulations of the national, provincial, city or
municipal government 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
8. 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
9. Certificates of the assessed value of lands, not exceeding P200 in value
assessed, furnished by the provincial, city or municipal Treasurer to applicants
for registration of title to land
10.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,

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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 agreement is duly registered and approved by the Bureau of Internal
Revenue (BIR)
11.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 the 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
12.Sale, barter or exchange of shares of stock listed and traded through the local
stock exchange (R.A 9648)
13.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.
14.Fixed income and other securities traded in the secondary market or through
an exchange.
15.Derivatives: Provided, That for purposes of this exemption, repurchase
agreements and reverse repurchase agreements shall be treated similarly as
derivatives
16.Interbranch or interdepartmental advances within the same legal entity
17.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.
18.Bank deposit accounts without a fixed term or maturity
19.All contracts, deeds, documents and transactions related to the conduct of
business of the Bangko Sentral ng Pilipinas
20.Transfer of property pursuant to Section 40(C)(2) of the National Internal
Revenue Code of 1997, as amended
21.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 quasi-banks (sec. 9, RR No. 13-2004)

Illustration:
A corporation, a newly formed corporation organized under Philippine laws, issued on
March 8, 2021 shares of stocks to one of its incorporators, Mr. D for P250,000. The
par value of the shares is P200,000

How much is the documentary stamp tax due?

Solution:
Par value of issued shares P200,000

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Divide by 200
1,000
X DST per unit P2
DST Due P 2,000

Assuming the shares are without par value

Issued price P250,000
Divide by 200
1,250
XDST per unit P2
DST Due P2,500
If the shares with par value were subsequently sold for P400,000

Par value of the issued shares P200,000

Divide by 200
1,000
X DST per unit P1.5
DST Due P1,500

If the shares without par value were subsequently sold for P400,000
DST on original issue P2,500
X 50%
DST Due P1,250

Illustration:
Sale of Real property
Pedro sold one of his vacant lots in his hometown in Tarlac acquired by him five years
ago for P5,000,000. He sold the same to Juan for P15,000,000 equivalent to the fair
market value at the time of sale.

How much is the documentary stamp tax due?

Consideration received or fmv whichever is higher P15,000,000

Divide by 1,000
15,000
xDST per unit P15
DST Due P225,000

Illustration:
A domestic corporation sold a parcel of land with the following details:
It is an agricultural land located in the municipality of Capas in the province of Tarlac.
The area is 2,500 sqm.
It was acquired in 2004 at a cost of 500,000.

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At the time of sale, it has a fair market value of 7,500,000. This is equivalent to the
prevailing market values enacted by the Sanggunian.
The consideration for the sale is 6,700,000.

How much is the capital gains tax from the sale?

How much is the documentary stamp tax from the sale?
How much is the local transfer tax from the sale?
1. FMV 7,500,000
xCGT rate 6%
CGT Due 450,000

2. FMV 7,500,000
Divide by 1,000
Multiply by P15
DST Due 112,500

3. Consideration 6,700,000
Rate (50%of1%) ,5%
Local transfer tax 33,500
The total consideration involved or of the fair market value in case the monetary
consideration involved in the transfer is not substantial, whichever is higher

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