Index for Documentary Stamp Tax:
- Description
- Tax Form
- Documentary Requirements
- Tax Rates
- Procedures
- Related Revenue Issuances
- Codal Reference
- Frequently Asked Questions
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.
BIR Form 2000 (Documentary Stamp Tax Declaration Return);
BIR Form 2000-OT Documentary Stamp Tax Declaration Return (One- Time Transactions)
Mandatory
- Photocopy of the document to which the documentary stamp shall be affixed
- Proof of exemption under special laws, if applicable;
- Proof of payment of documentary stamp tax paid upon the original issue of the stock, if applicable.
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.
|
|
|
- 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 person making, signing, issuing, accepting or transferring the document or facility evidencing transaction pertaining to the following:
1. Sales, or agreements to sell, or memoranda of sale, or deliveries, or transfer of shares or certificates of stock in any association, company, or corporation, or transfer of such securities by assignment in blank, or by delivery, or by any paper or agreement, or memorandum or other evidences of transfer or sale whether entitling the holder in any manner to the benefit of such stock, or to secure the future payment of money, or for the future transfer of any stock, there shall be collected a documentary stamp tax of One peso and fifty centavos (P1.50) on each Two hundred pesos (P200) or fractional part thereof, of the par value of such due-bill, certificate of obligation or stock; Provided, That only one tax shall be collected on each sale or transfer of stock from one person to another, regardless of whether or not a certificate of stock is issued, indorsed, or delivered in pursuance of such sale or transfer: and Provided, further, That in the case of stock without par value the amount of documentary stamp tax herein prescribed shall be equivalent to fifty percent (50%) of the documentary stamp tax paid upon the original issue of said stock.
2. Conveyances, donations, deeds, instruments, or writings, other than grants, patents or original certificates of adjudication issued by the Government, whereby any land, tenement, or other realty sold shall be granted, assigned, transferred, donated or otherwise conveyed to the purchaser, or purchasers, or to any other person or persons designated by such purchaser or purchasers or donee, there shall be collected a documentary stamp tax, at the rates herein below prescribed, based on the consideration contracted to be paid for such realty or on its fair market value determined in accordance with Section 6(E) of this Code, whichever is higher: Provided, That when one of the contracting parties is the Government, the tax herein imposed shall be based on the actual consideration.
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.
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.
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
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)
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)