Legal Basis for Documentary Stamp Tax Payment
- Refers to Sections 173 and 196 of the Tax Code as amended.
- DST payment pertains specifically to deeds of sale.
Time of Payment for Documentary Stamp Tax
- Payment is required at the time the act or transaction is done.
- Specifically, DST stamps must be purchased, affixed, and cancelled on the document on the date of execution or signing by the parties.
- Notarization date is NOT the time of payment for DST.
Procedure for DST Payment
- Payment effectuated by one of the following means:
- Physical purchase and affixture of documentary stamps on the deed.
- Notation of payment on the document with a denomination of P10.00 or more.
Consequences of Delay in DST Payment
- Late purchase and affixture (or notation) of DST attracts statutory penalties:
- 25% surcharge.
- 20% per annum interest.
- These penalties are mandated under Sections 248 and 249 of the Tax Code as amended.
Exception to Penalties
- Taxpayers can avoid penalties by proving, with clear and convincing evidence other than the deed or transfer document, that delay was due to reasonable and justifiable causes.
- Examples of justifiable causes:
- Non-working holidays.
- Natural calamities preventing access to BIR offices (e.g., strong typhoons, flooded streets).
- If proven, the Commissioner of Internal Revenue may abate the penalties according to Section 204 of the Tax Code as amended.
Directive to Revenue Officers and Publicity
- All internal revenue officers and concerned persons are instructed to strictly follow these guidelines.
- Emphasis on giving the circular widespread publicity for awareness and compliance.
Authority and Adoption
- The circular was adopted on June 28, 1991.
- Signed by Commissioner Jose U. Ong.