QuestionsQuestions (BIR REVENUE MEMORANDUM CIRCULAR NO. 57-91)
DST is considered paid when the stamp is purchased, affixed, and subsequently cancelled (or when payment is noted with a denomination of P10.00 or more) on the deed at the time the act is done or the transaction occurs—i.e., at the date of execution/signing by the parties—not at the time of notarization.
Payment is effected by the purchase, affixture, and subsequent cancellation of documentary stamps (or notation of DST payment with denomination of P10.00 or more) on the document.
Because the circular clarifies that DST must be secured and affixed (or payment noted) at the time the transaction/document is executed by the parties, and delays relative to execution trigger penalties, regardless of when the deed is later notarized.
The delayed deed becomes subject to statutory penalties of 25% surcharge, plus 20% interest per annum as prescribed by Sections 248 and 249 of the Tax Code as amended.
The circular references Section 173 in relation to Section 196 of the Tax Code as amended.
RMC No. 45-88 dated 07 September 1988, which initially addressed the timing issue but had implementation problems.
No. Delays generally trigger the statutory penalties (25% surcharge and 20% interest per annum). However, exceptions exist for taxpayers who can prove a reasonable and justifiable cause for the delay.
The taxpayer must prove by clear and convincing evidence other than the deed of sale/transfer that the delay was due to a reasonable and justifiable cause.
Non-working holidays or strong typhoons causing flooded streets where BIR offices are closed, making it impossible to purchase the required documentary stamps.
Yes. The CIR may exercise the power to abate an imposition or assessment of penalty pursuant to Section 204 of the Tax Code as amended.
The deed becomes subject to the statutory penalties (25% surcharge and plus 20% interest per annum), unless the taxpayer qualifies for an exception and proves justifiable cause by clear and convincing evidence.
It includes both: purchase/affixture/cancellation of stamps, or notation of DST payment on the document with denomination of P10.00 or more.
It enjoins all internal revenue officers and others concerned to be guided accordingly.
To ensure broad awareness and compliance by taxpayers and BIR offices regarding the correct time of payment of DST on deeds of sale.
DST stamps should be purchased, affixed, and cancelled (or payment noted) on the deed at the time the act/transaction is done, i.e., the execution/signing date by the parties—not on the notarization date.