QuestionsQuestions (BIR REGULATIONS NO. 13-2004)
BIR Regulations No. 13-2004 is promulgated pursuant to Section 4 of R.A. 8424 and Section 244 of the National Internal Revenue Code of 1997. It implements the provisions of R.A. 9243, which rationalized the documentary stamp tax (DST) provisions of the NIRC of 1997.
The regulations state that Sections under Title VII (DST) were retitled, renumbered, and amended, highlighting (among others) renumbering of SEC. 174 (original issue of shares), SEC. 175 (sales/transfer of shares), SEC. 179 (all debt instruments), SEC. 180 (domestic bills of exchange/drafts), SEC. 183 (life insurance policies), SEC. 186 (annuity and pre-need plans), and SEC. 199 (documents not subject to DST).
DST is P0.75 on each P200, or fractional part thereof, of the par value of such stock.
Only one DST shall be collected on each sale or transfer of stock from one person to another, regardless of whether a certificate is issued, endorsed, or delivered pursuant to the transfer.
For stock without par value, the DST is equivalent to 25% of the DST paid upon the original issue of the same stock.
DST is imposed on execution of the deed transferring ownership or on delivery/assignment/endorsement of the shares in favor of another. No transfer of shares shall be recorded unless the DST thereon has been duly paid in accordance with the DST rules (referencing Section 201 of the Code mentioned in the text).
Yes. Agreements to sell shares and executory contracts are taxable. If DST has been paid on the agreement to sell or memorandum of sale, the actual sale or transfer pursuant to the agreement will no longer be subject to DST.
If certificates of stock are transferred from a resigned trustee to a newly appointed trustee, but the certificate remains in the name of the cestui que trust or the resigned trustee such that the new trustee is a mere depository, the transfer is stated to be not taxable because beneficial ownership/attributes remain effectively unchanged.
Transfer to nominees is not subject to DST only upon proof of a duly executed Nominee Agreement showing: (1) the purpose of the transfer; (2) transfer is without consideration other than undertaking of nominee to only represent the beneficial owner; and (3) transfer is in trust.
DST is computed proportionally based on the ratio of the term in number of days to 365 days. The tax is still based on the issue price, but multiplied by (days/365).
SEC. 199(k) exempts bank deposit accounts without a fixed term or maturity. However, the regulations clarify that this exemption applies only to deposit accounts that do not qualify under Section 5’s rules (i.e., deposits that are effectively treated as debt instruments due to interest significantly higher and/or maturity/defined program).