Index for Documentary Stamp Tax:                                                                                                                   


Description

Documentary Stamp Tax is a tax on documents, instruments, loan agreements and papers evidencing the acceptance, assignment, sale or transfer of an obligation, right or property incident thereto.

[return to index]


Tax Forms

BIR Form 2000 (Documentary Stamp Tax Declaration Return);

BIR Form 2000-OT Documentary Stamp Tax Declaration Return (One- Time Transactions)

[return to index]


Documentary Requirements

Mandatory

  1. Photocopy of the document to which the documentary stamp shall be affixed
  2. Proof of exemption under special laws, if applicable;
  3. Proof of payment of documentary stamp tax paid upon the original issue of the stock, if applicable.

[return to index]


Tax Rates

 

 

Tax Code Section
Document
Taxable Unit
Tax Due Per Unit
% of Unit
Taxable Base
174  
Original Issue of Shares of Stock with par value

Original Issue of Shares of Stock without par value

Stock Dividend

P200.00 or fraction thereof                                
 
 
P200.00 or fraction thereof
                                
 
 
P200.00 or fraction thereof
2.00                                
 
 
2.00
                                
 
2.00
1% 
 
 
 
1% 
 
 

1%

Par value of shares of stocks                                                       
 
Actual consideration for the issuance of shares of stocks                                
                                        Actual value represented by each share
175  
Sales, Agreements to Sell, Memoranda of Sales, Deliveries or Transfer of Shares or   Certificates of Stock   
 
 
 
Stock without par value
P200.00 or fraction thereof        1.50    
0.75%                                        
                                                     
 50%
Par value of such stock
 
 
 
 
 
DST paid upon the original issuance of said stock.
 176  
Bonds, Debentures, Certificate of Stock or Indebtedness issued in foreign Countries  P200.00 or fraction thereof  .75 .375% Par value of such bonds, debentures, Certificate of Stock or Indebtedness
 177  
Certificate of Profits or Interest in Property or Accumulation P200.00 or fraction thereof 1.00 .5% Face value of such certificates / memorandum
178  

Bank Checks, Drafts, Certificate of Deposit not bearing interest   and other Instruments

On each Document 3.00
 
 
179  
All Debt Instruments P200.00 or fraction thereof 1.50
.75%

Issue price of any such debt instruments or a fraction of 365 days for instrument with term of less than 1 year

180  
All Bills of Exchange or Drafts P200.00 or fraction thereof .60 .3%

Face value of any such bill of exchange or draft

181  
Acceptance of Bills of Exchange or   order for the payment of money purporting to be drawn in a   foreign country but payable in the Philippines P200.00 or fraction thereof .60
.3%
Face value of such bill of exchange or order or the Philippine equivalent of such value, if expressed in foreign currency
182  
Foreign Bills of Exchange and Letters of Credit
P200.00 or fraction thereof
.60 .3% Face value of such bill of exchange or letter of credit or the Philippine equivalent of such value, if expressed in foreign   currency
 183    
 Life Insurance Policies
If the amount of insurance does not exceed P100,000.00
  
 
If the amount of insurance exceeds P100,000.00 but does not exceed P300,000.00 
 
 
If the amount of insurance exceeds P300,000.00 but does not exceed P500,000.00
 
 
If the amount of insurance exceeds P500,000.00 but does not exceed P750,000.00
 
 
If the amount of insurance exceeds P750,000.00 but does not exceed P1,000,000.00
 
 
If the amount of insurance exceeds P1,000,000.00
exempt   
 
  
 
20.00   
 
  
 
 
50.00  
 
 
  
 
100.00   
 
 
  
 
150.00   
 
 
  
 
200.00
 
Amount of Insurance
 
 
 
Amount of Insurance
 
 
 
 
Amount of Insurance
 
 
 
 
Amount of Insurance
 
 
 
 
Amount of Insurance
 
 
 
 
Amount of Insurance
184
Policies Of Insurance upon Property
P4.00 premium or fraction thereof
.50
12.5%
Premium charged
185
Fidelity Bonds and other Insurance Policies
P4.00 premium or fraction thereof
.50
12.5%
Premium charged
186  
Policies of Annuities  or other instruments 
 
 
  
 
Pre-Need Plans
P200.00 or fraction thereof
 
 
 
 
P200.00 or fraction thereof
1.00
 
 
 
  
.40
.5%
 
 
 
  
.20%
Premium or installment payment or contract price collected 
 
 
 
Premium or contribution   collected
187
Indemnity Bonds
P4.00 or fraction thereof
.30
7.5%
Premium charged
188
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
30.00
 
 
189
Warehouse Receipts (except if value does not exceed P200.00)
Each Receipt
30.00
 
 
190
Jai-alai, Horse Race Tickets, lotto or Other Authorized Number   Games
P1.00 and below cost of ticket
 
 
Additional P0.20 on every P1.00 or fraction thereof if cost of   ticket exceeds P1.00
.20   
20%    
Cost of the ticket
 
 
Cost of the ticket
191  
Bills of Lading or Receipts(except charter party)
If the value of such goods exceeds P100.00 and does not exceed P1,000.00
 
 
If the value exceeds P1,000.00
 
 
Freight tickets covering goods, merchandise or effects carried as accompanied baggage of passengers on land and water carriers primarily engaged in the transportation of passengers
2.00   
  
 
  
20.00  
 
 
 
Exempt
 
Value of such goods
 
  
 
Value of such goods
    
192 
Proxies (except proxies issued affecting the affairs of associations or   corporations, organized for religious, charitable or literary purposes)
Each proxy
30.00
 
 
193  
Powers of 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)
Each Document
10.00
 
 
194  
Leases and other Hiring agreements or memorandum or contract for hire, use or rent of any lands or tenements or portions thereof
First 2,000 or fractional part thereof
 
 
 
For every P1,000 or fractional part thereof in excess of the   first P2,000 for each year of the term of the said contract or   agreement
6.00
 
 
 
2.00  
.3%
 
 
 
.2%
 
195
Mortgage or Pledge 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
40.00
 
 
20.00
.8%
 
 
.4%
Amount Secured
 
 
Amount Secured
196
Deed of Sale, Conveyances, Donations of Real   Property (except grants, patents or original certificate of adjudication issued by the government)
First 1,000
 
 
 
 
     
For each additional P1,000 or fractional part thereof in excess   of P1,000
15.00
 
 
 
     
 
15.00
1.5%
 
 
    
  
 
1.5%
Consideration or Fair Market Value, whichever is higher (if   government is a party, basis shall be the consideration)
 
 
Consideration or Fair Market Value, whichever is higher (if   government is a party, basis shall be the consideration)
197  
Charter parties and Similar Instruments
Charter parties and similar instruments if gross tonnage of the ship, vessel or steamer is:
 
1,000 tons and below
 
 
 
  
 
1,001 to 10,000 tons
 
 
 
 
  
 
Over 10,000 tons
 
 
 
 
1st 6 months P1,000.00
In excess + P 100.00
 
 
 
1st 6 months P2,000.00
In excess + P200.00
 
 
 
1st 6 months P3,000
In excess + 300
 
 
 
 
 
Registered gross tonnage
 
 
 
 
   
Registered gross tonnage
 
 
 
 
  
  
Registered gross tonnage
198  
Stamp Tax on Assignments and Renewals or Continuance of Certain   Instruments
 
At the same rate as that imposed on the original instrument.
 
 

[return to index]


Procedures

  • BIR FORM 2000 - (DOCUMENTARY STAMP TAX DECLARATION RETURN)

Who Shall File

The return shall be filed in triplicate by the following:

1. In the case of constructive affixture of documentary stamps, by the person making, signing, issuing, accepting, or transferring documents, instruments, loan agreements and papers, acceptances, assignments, sales and conveyances of the obligation, right or property incident thereto wherever the document is made, signed, issued, accepted or transferred when the obligation or right arises from Philippine sources or the property is situated in the Philippines at the same time such act is done or transaction had;

2. In the case of Electronic Documentary Stamp Tax (eDST) System user, by the taxpayers belonging to the industries mandated to use the web-based eDST System in the payment/remittance of DST liabilities and the affixture of the prescribed documentary stamp on taxable documents and taxpayers who, at their option, choose to pay the DST liabilities thru the eDST System pursuant to Revenue Regulations (RR) No. 7-2009; and

3. By a revenue collection agent for remittance of sold loose documentary stamps.

Whenever one party to the taxable document enjoys exemption from the tax herein imposed, the other party thereto who is not exempt shall be the one directly liable for the tax.

When and Where to File

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.

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.

When and Where to Pay

Upon filing of this return, the total amount payable shall be paid to the AAB where the return is filed within five (5) days after the close of the month when the taxable document was made. In places where there are no AABs, the tax shall be paid with the Revenue Collection Officer who shall issue an Electronic Revenue Official Receipt (eROR) therefor.

When the return is filed with an AAB, taxpayer must accomplish and submit BIR-prescribed deposit slip, which the bank teller shall machine validate as evidence that payment was received by the AAB. The AAB receiving the tax return shall stamp mark the word “Received” on the return and also machine validate the return as proof of filing the return and payment of the tax by the taxpayer, respectively. The machine validation shall reflect the date of payment, amount paid and transactions code, the name of the bank, branch code, teller’s code and teller’s initial. Bank debit memo number and date should be indicated in the return for taxpayers paying under the bank debit system.

For eDST System User

Prior to the enrollment in the eDST System, taxpayers availing thereof, whether on the mandatory or optional basis, shall be duly enrolled under the BIR Electronic Filing and Payment System (eFPS). In paying the DST liabilities, BIR Form No. 2000 shall be filed and the amount due thereon shall be paid thru the eFPS for taxpayers and PhilPass Facility of the Bangko Sentral ng Pilipinas for banks (AABs and non-AABs).

For eFPS Taxpayer

The deadline for electronically filing and paying the taxes due thereon shall be in accordance with the provisions of existing applicable revenue issuances.

 

  • BIR FORM 2000-OT DOCUMENTARY STAMP TAX DECLARATION RETURN (ONE-TIME TRANSACTIONS)

Who Shall File

The return shall be filed in triplicate by the following person making, signing, issuing, accepting or transferring the document or facility evidencing transaction:

1. Every natural or juridical person, resident or non-resident, for donation, sale, barter, exchange or other onerous disposition of shares of stock in a domestic corporation, classified as capital asset, not traded in the local stock exchange;

2. Every withholding agent/buyer/seller on the sale, transfer or exchange of real property classified as capital asset. The “sale” includes pacto de retro sale and other forms of conditional sale; and

3. Every withholding agent/buyer/seller on the sale, transfer or exchange of real property other than capital asset.

4. Every natural or juridical person, resident or non-resident, for donation of real properties.

Whenever one party to the taxable document enjoys exemption from the tax herein imposed, the other party thereto who is not exempt shall be the one directly liable for the tax.

When and Where to File and Pay

The return shall be filed and the tax paid within five (5) days after the close of the month when the taxable document was made, signed, issued, accepted or transferred.

The return shall be filed with and the tax paid to the Authorized Agent Bank (AAB) within the territorial jurisdiction of Revenue District Office (RDO) where the seller/transferor/donor is required to be registered or where the property is located in case of sale of real property.

When the return is filed with an AAB, taxpayer must accomplish and submit BIR-prescribed deposit slip, which the bank teller shall machine validate as evidence that payment was received by the AAB. The AAB receiving the tax return shall stamp mark the word “Received” on the return and also machine validate the return as proof of filing the return and payment of the tax by the taxpayer, respectively.

The machine validation shall reflect the date of payment, amount paid and transactions code, the name of the bank, branch code, teller’s code and teller’s initial. Bank debit memo number and date should be indicated in the return for taxpayers paying under the bank debit system.

Payments may also be made thru the epayment channels of AABs or online facility, credit/debit/prepaid cards, and mobile payments.

For transactions covered by one (1) Deed of Sale/Exchange/Donation involving one (1) to three (3) properties, the taxpayer can avail of the fast lane pursuant to Revenue Memorandum Circular (RMC) No. 43-2018, as amended by RMC No. 107-2018. Payments amounting to twenty thousand pesos (P 20,000.00) and below shall be paid in cash while payments above twenty thousand pesos (P 20,000.00) shall be made through Manager’s Check or Cashier’s Check to the Revenue Collection Officer of the RDO concerned.

[return to index]

 


Related Revenue Issuances

Revenue Regulations (RR) Nos. 9-2000, 6-2001, 13-2004, 7-2009, 6-2014, 4-2018

Revenue Memorandum Order (RMO) Nos. 8-1998, 15-2001, 13-2008, 14-2008

Revenue Memorandum Circular (RMC) Nos. 1-2010, 24-2010, 51-2010, 24-2011, 46-2014, 3-2018

OPM-AS-APMD 2017-06-06

OPM-AS-APMD 2017-06-01

[return to index]


Codal Reference

Secs. 51 to 70 of Republic Act No. 10963 of the Tax Reform for Acceleration and Inclusion (TRAIN) Law

Sec. 173 to Sec. 201 of the National Internal Revenue Code (NIRC)

[return to index]


Frequently Asked Questions

1) What are the documents/ papers not subject to Documentary Stamp Tax?

Under Section 9 of Revenue Regulations No. 13-2004, the following documents and papers are not subject to DST:

  • 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
  • Certificates of oaths administered by any government official in his official capacity or acknowledgement by any government official in performance of his official duty
  • 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 court 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 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
  • 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
  • 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
  • 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 agreement is duly registered and approved by the Bureau of Internal Revenue (BIR)
  • 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
  • Sale, barter or exchange of shares of stock listed and traded through the local stock exchange (R.A 9648)
  • 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.
  • Fixed income and other securities traded in the secondary market or through an exchange.
  • Derivatives: Provided, that for purposes of this exemption, repurchase agreements and reverse repurchase agreements shall be treated similarly as derivatives
  • Inter-branch or interdepartmental advances within the same legal entity
  • All forbearances 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.
  • Bank deposit accounts without a fixed term or maturity
  • All contracts, deeds, documents and transactions related to the conduct of business of the Bangko Sentral ng Pilipinas
  • Transfer of property pursuant to Section 40(C)(2) of the National Internal Revenue Code of 1997, as amended
  • Inter-bank 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

Further, Section 20 of RR No. 4-2018 exempts from DST the following donations or gifts that are exempt from donor’s tax:

a. Gifts Made by a Resident:

  • Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government; and
  • Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or philanthropic organization or research institution or organization: Provided, however, that not more than thirty percent (30%) of said gifts shall be used by such donee for administration purposes. For the purpose of this exemption, a 'non-profit educational and/or charitable corporation, institution, accredited nongovernment organization, trust or philanthropic organization and/or research institution or organization' is a school, college or university and/or charitable corporation, accredited nongovernment organization, trust or philanthropic organization and/or research institution or organization, incorporated as a non-stock entity, paying no dividends, governed by trustees who receive no compensation, and devoting all its income, whether students' fees or gifts, donation, subsidies or other forms of philanthropy, to the accomplishment and promotion of the purposes enumerated in its Articles of Incorporation.

b. Gifts Made by a Non-resident not a Citizen of the Philippines:

  • Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government; and
  • Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or philanthropic organization or research institution or organization: Provided, however, that not more than thirty percent (30%) of said gifts shall be used by such donee for administration purposes.

2) Where is the Documentary Stamp Tax Declaration Return filed?

In the Authorized Agent Bank (AAB) within the territorial jurisdiction of the RDO which has jurisdiction over the residence or principal place of business of the taxpayer or where the property is located in case of sale of real property or where the Collection Agent is assigned. In places where there is no Authorized Agent Bank, the return will be filed with the Revenue Collection Officer or duly authorized City or Municipal Treasurer where the taxpayer's residence or principal place of business is located or where the property is located in case of sale of real property or where the Collection Agent is assigned.

3) What are the documents/papers not subject to Documentary Stamp Tax?  

  • 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
  • Certificates of oaths administered by any government official in his official capacity or acknowledgement by any government official in performance of his official duty
  • 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 court 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 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
  • 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
  • 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
  • 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 agreement is duly registered and approved by the Bureau of Internal Revenue (BIR)
  • 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
  • Sale, barter or exchange of shares of stock listed and traded through the local stock exchange (R.A 9648)
  • 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.
  • Fixed income and other securities traded in the secondary market or through an exchange.
  • Derivatives: Provided, That for purposes of this exemption, repurchase agreements and reverse repurchase agreements shall be treated similarly as derivatives
  • Interbranch or interdepartmental advances within the same legal entity
  • 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.
  • Bank deposit accounts without a fixed term or maturity
  • All contracts, deeds, documents and transactions related to the conduct of business of the Bangko Sentral ng Pilipinas
  • Transfer of property pursuant to Section 40(C)(2) of the National Internal Revenue Code of 1997, as amended
  • 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)

4) What are the implications of failure to stamp taxable documents?

An instrument, document, or paper which is required by law to be stamped and which has been signed, issued, accepted or transferred without being duly stamped, shall not be recorded, nor shall it or any copy thereof or any record of transfer of the same be admitted or used in evidence in any court until the requisite stamp or stamps shall have been affixed thereto and cancelled.

No notary public or other officer authorized to administer oaths shall add his jurat or acknowledgment to any document subject to documentary stamp tax unless the proper documentary stamps are affixed thereto and cancelled.

5) What is Electronic Documentary Stamp Tax (eDST) System?

The eDST is a web-based application created for taxpayers and the BIR that is capable of affixing a secured documentary stamp on the taxable documents as defined under the appropriate provisions under Title VII of the National Internal Revenue Code of 1997, as amended, thru the use of a computer unit, any laser printer with at least 1200 dpi resolution, and Internet Explorer 7.0 It is also capable of providing a 3-layer watermark on stamps for added security. (Sec. 5 (1), RR No. 7-2009)

6) Is DST Law applicable on Electronic Documents?

The DST rates as imposed under the Code, as amended by R.A. 9243 and further amended by R.A. 10963 shall be applicable on all documents not otherwise expressly exempted by the said law, notwithstanding the fact that they are in electronic form. As provided for by R.A. 8792, otherwise known as the 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. (Sec. 10, RR No. 13-2004 as amended by RR No. 4-2018)

7) What are the inclusions of a debt instrument? 

“Debt Instrument” shall mean instruments representing borrowing and lending transaction including but not limited to:

  • debentures
  • certificates of indebtedness
  • due bills
  • bonds
  • loan agreements, including those signed abroad wherein the object of the contract is located or used in the Philippines
  • instruments and securities issued by the government or any of its instrumentalities
  • deposit substitute debt instruments
  • certificates or other evidences of deposits that are drawing instrument significantly higher than the regular savings deposit taking into consideration the size of the deposit and the risks involved
  • certificates or other evidences of deposits that are drawing interest and having a specific maturity date
  • promissory notes, whether negotiable or non-negotiable, except bank notes issued for circulation (Sec. 5, RR No. 13-2004)

8) Is any document, transaction or arrangement entered into under Financial Lease subject to Documentary Stamp Tax?

Financial lease is akin to a debt rather than a lease. A nature of an obligation than a lease of personal property. The mere act of extending credit is already a means of facilitating an obligation or advancing in behalf of the lessee certain property in lieu of cash in exchange for a definitive amortization to be paid to the lessor with profit margin included. Section 179 of the NIRC, as amended, covers all debt instruments. Therefore, being a nature of an obligation, any document, transaction or arrangement entered into under financial lease is subject to DST under such Section of the NIRC, as amended. (RMC No. 46-2014)

[return to index]