Amendments on Documentary Stamp Taxes

Legislative authority and scope of amendment

Section 1 amends Section 211 of Commonwealth Act No. 466.
Sections 2 to 24 amend Sections 212 to 236 of Commonwealth Act No. 466, respectively, through the listed section numbering.
Section 25 provides the effectivity rule for Republic Act No. 40.
Republic Act No. 40 operates by prescribing documentary stamp tax rates for enumerated instruments and transactions.

Stamp taxes on bonds and stock

Section 211 requires a documentary stamp tax on bonds, debentures, and certificates of indebtedness issued by any association, company, or corporation.
The rate under Section 211 is thirty centavos on each two hundred pesos, or fractional part thereof, of the face value of the document.
Section 212 requires a documentary stamp tax on the original issue of certificates of stock by any association, company, or corporation.
The rate under Section 212 is thirty centavos on each two hundred pesos, or fractional part thereof, of the par value of the certificates.
Section 212 provides special bases:
- For stock without par value, the tax is based on the actual consideration received for the issuance.
- For stock dividends, the tax is based on the actual value represented by each share.
Section 213 imposes a documentary stamp tax on sales, agreements to sell, memoranda of sales, deliveries, or transfer of securities including bonds, due-bills, certificates of obligation, and shares or certificates of stock.
The rate under Section 213 is six centavos on each two hundred pesos, or fractional part thereof, of the par value of the security.

One-tax rule for stock transfers

Section 213 provides that only one tax shall be collected on each sale or transfer of stock or securities from one person to another.
The one-tax rule applies regardless of whether a certificate is issued, indorsed, or delivered in pursuance of the sale or transfer.
Section 213 provides a valuation adjustment for stock without par value:
- The documentary stamp tax is equivalent to 20% of the documentary stamp tax paid upon the original issue of the stock.

Stamp taxes on profits, bank instruments, and promissory instruments

Section 215 requires a documentary stamp tax on certificates of profits or certificates/memoranda showing interest in property or accumulations of any association, company, or corporation, and on the transfers of such certificates or memoranda.
The rate under Section 215 is four centavos on each two hundred pesos, or fractional part thereof, of the face value of the certificate or memorandum.
Section 216 imposes a documentary stamp tax on bank checks, drafts, and certificates of deposit not bearing interest, and other instruments like orders for payment drawn upon or issued by banks or similar entities at sight or on demand.
The rate under Section 216 is four centavos on each check, draft, or relevant certificate/instrument.
Section 217 imposes a documentary stamp tax on bills of exchange and certain instruments not payable at sight or on demand, including:
- bills of exchange (between points within the Philippines),
- drafts and interest-bearing certificates of deposit,
- orders for payment of any sum of money otherwise than at sight or on demand,
- negotiable promissory notes (except bank notes issued for circulation),
- and each renewal of such instruments.
The rate under Section 217 is four centavos on each two hundred pesos, or fractional part thereof, of the face value.

Taxes on acceptance, foreign bills, and letters of credit

Section 218 imposes a documentary stamp tax upon the acceptance of payment of a bill of exchange or order for payment purporting to be drawn in a foreign country but payable in the Philippines.
The rate under Section 218 is six centavos on each two hundred pesos, or fractional part thereof, of the face value of the bill/order, or the Philippine equivalent if expressed in foreign currency.
Section 219 imposes a documentary stamp tax on foreign bills of exchange and letters of credit, including orders by telegraph or otherwise issued by express/steamship companies or any person.
The tax under Section 219 applies to foreign instruments drawn in but payable out of the Philippines, in a set of three or more according to merchant/custom practice.
The rate under Section 219 is six centavos on each two hundred pesos, or fractional part thereof, of the face value of the bill or letter of credit, or the Philippine equivalent if expressed in foreign currency.

Stamp taxes on insurance and annuities

Section 220 imposes a documentary stamp tax on life insurance policies and other instruments by whatever name whereby life insurance is made or renewed.
The rate under Section 220 is fifteen centavos on each two hundred pesos, or fractional part thereof, of the amount insured.
Section 221 imposes a documentary stamp tax on policies insuring property, including rents or profits, against perils by sea/inland waters, or against fire or lightning.
The rate under Section 221 is six centavos on each four pesos, or fractional part thereof, of the amount of premium charged.
Section 222 imposes a documentary stamp tax on specified fidelity bonds and insurance policies of indemnity for loss, damage, or liability, excluding life, marine, inland, and fire insurance.
The rate under Section 222 is six centavos on each four pesos, or fractional part thereof, of the premium charged.
Section 223 imposes a documentary stamp tax on policies of annuities and other instruments by whatever name whereby an annuity is made, transferred, or redeemed.
The rate under Section 223 is thirty centavos on each two hundred pesos, or fractional part thereof, of the capital of the annuity; if unknown, the tax is based on each two hundred pesos, or fractional part thereof, of 33 1/3 times the annual income.
Section 224 imposes a documentary stamp tax on indemnity bonds for suretyship obligations and on other bonds of any description except bonds required in legal proceedings or otherwise provided for in the Code.
The rate under Section 224 is seventy-five centavos.

Taxes on certificates, warehouse receipts, bills of lading

Section 225 imposes a documentary stamp tax on:
- certificates of damage,
- every other certificate or document issued by a customs officer, marine surveyor, or other person acting as such,
- certificates issued by notaries public,
- and certificates or documents required by law or by rules and regulations of a public office, issued to give information or establish proof of a fact, and not otherwise specified.
The base rate under Section 225 is thirty centavos per certificate.
Section 225 provides tax clearance certificate rates:
- PHP 15 for a first class passenger
- PHP 8 for a second or tourist class passenger
- PHP 2 for a third class or steerage passenger
Section 226 imposes a documentary stamp tax on warehouse receipts for property held in storage in a public or private warehouse or yard, for any person other than the proprietor of the warehouse or yard.
The rate under Section 226 is thirty centavos per warehouse receipt.
Section 226 provides a monthly exemption rule for warehouse receipts issued to one person in any one calendar month covering property with value not exceeding PHP 200.
Section 227 imposes a documentary stamp tax on bills of lading or receipts (except charter party) for goods shipped from one port/place in the Philippines to another port/place in the Philippines, or to a foreign port.
The rates under Section 227 depend on value:
- six centavos if value exceeds PHP 5 and does not exceed PHP 200
- fifteen centavos if value exceeds PHP 200 and does not exceed PHP 1,000
- thirty centavos if value exceeds PHP 1,000 and does not exceed PHP 5,000
- seventy-five centavos if value exceeds PHP 5,000 and does not exceed PHP 10,000
- PHP 1.50 if value exceeds PHP 10,000

Taxes on passage tickets, proxies, powers of attorney, leases

Section 228 imposes a documentary stamp tax on each passage ticket (single fare or return) and on each receipt for money paid for passage of a person on transportation other than government-owned transportation, from a port/place in the Philippines to a foreign port/place.
The rates under Section 228 depend on passage cost:
- PHP 5 if passage costs not more than PHP 60
- PHP 8 if passage costs more than PHP 60 but not more than PHP 120
- PHP 10 if passage costs more than PHP 120 but not more than PHP 250
- PHP 15 if passage costs more than PHP 250 but not more than PHP 500
- PHP 25 if passage costs more than PHP 500
Section 229 imposes a documentary stamp tax on each proxy for voting at elections for officers of a company/association, or for any other purpose.
Section 229 exempts proxies affecting the affairs of associations or corporations organized for religious, charitable, or literary purposes.
The rate under Section 229 is fifty centavos per proxy.
Section 230 imposes a documentary stamp tax on each power of attorney to perform any act whatsoever.
Section 230 provides an exemption for powers of attorney connected with collecting claims due from or accruing to the Government of the Republic of the Philippines or the government of any province, city, or municipality.
The rate under Section 230 is:
- thirty centavos for each power of attorney generally
- sixty centavos for each power of attorney authorizing another to administer, sell, lease, or otherwise dispose of a principal’s property.
Section 231 imposes documentary stamp tax on leases and other hiring agreements (each lease, agreement, memorandum, or contract for hire, use, or rent of lands or tenements or portions thereof).
The rates under Section 231 depend on execution term:
- sixty centavos if executed for not more than one year
- PHP 1.50 if executed for more than one year and not more than three years
- PHP 3 if executed for more than three years
Section 232 imposes documentary stamp tax on mortgages, pledges, and deeds of trust as security for payment of a definite and certain sum, and on conveyances in trust or to be sold or otherwise converted into money intended only as security.
Section 232 provides rates:
- PHP 1.50 when the mortgage/deed of trust amount exceeds PHP 1,000 but does not exceed PHP 3,000
- an additional PHP 1.50 on each PHP 3,000 or fractional part in excess of PHP 3,000

Taxes on deeds of sale and charter parties

Section 233 imposes documentary stamp tax on conveyances, deeds, instruments, or writings (other than grants, patents, or original certificates of adjudication issued by the Government) that transfer ownership of lands/realty sold to the purchaser or to persons designated by the purchaser.
The rate under Section 233(a) is seventy-five centavos when consideration or value received or contracted to be paid, after proper allowance for incumbrances, exceeds PHP 200 and does not exceed PHP 1,000.
Section 233(b) imposes PHP 1.50 for each additional PHP 1,000 or fractional part thereof in excess of PHP 1,000.
Section 233 authorizes correction of undervaluation: when the documentary stamp tax due is reduced by an incorrect statement of consideration, the Collector of Internal Revenue, provincial or city treasurer, or other revenue officer must assess based on true market value and collect the proper tax.
Section 234 imposes documentary stamp tax on charter parties and similar instruments, including charters and related writings and their renewals or transfers.
Section 234 sets rates based on registered gross tonnage and charter duration:
- For tonnage not exceeding 300 tons and duration not exceeding six months: PHP 18, plus PHP 3 for each month or fraction in excess of six months
- For tonnage exceeding 300 but not exceeding 600 tons and duration not exceeding six months: PHP 36, plus PHP 6 for each month or fraction in excess of six months
- For tonnage exceeding 600 tons and duration not exceeding six months: PHP 72, plus PHP 12 for each month or fraction in excess of six months

Exempt instruments and single-tax security rule

Section 236 exempts the following instruments, documents, and papers from documentary stamp tax:
- bonds, debentures, and certificates of indebtedness issued by the Government of the Republic of the Philippines or the government of any province, city, or municipality
- checks, drafts, warrants, and bills of exchange issued in payment of any debt, obligation, or liability, or in fulfillment of any contract of such government
- similar instruments issued in payment of salaries or wages of personnel of the United States Army or Navy, and similar instruments issued in payment of pensions, gratuities, or compensation of veterans, their widows, heirs, or dependents
- insurance policies or annuities made or granted by a fraternal or beneficiary society, order, association, or cooperative company operated on a lodge system or local cooperation plan and organized and conducted solely by members for exclusive benefit of members and not for profit
- certificates of oaths administered to any government official in official capacity; acknowledgments by a government official in performance of official duties; written appearances in court by a government official in official capacity
- certificates of administration of oaths to any person as to authenticity of a paper required to be filed in court
- papers and documents filed in courts by or for national/provincial/city/municipal governments
- affidavits of poor persons to prove poverty
- statements and other compulsory information required by national/provincial/city/municipal rules and regulations exclusively for statistical purposes and wholly for the use of the bureau or office where the name are filed, and not for the use or benefit of the person filing the same
- certified copies and other certificates placed upon documents for the national/provincial/city/municipal governments, made at the instance and for the sole use of some other branch of the same governments
- certificates of assessed value of lands not exceeding PHP 200 in value assessed, furnished by provincial/city/municipal treasurers for registration of title to land
Section 236 provides a single-tax rule for security arrangements: when any bond, note, or other obligation is secured by a mortgage, pledge, deed of trust, or by assignment or transfer of any documentary security, one tax only is collected.
Section 236 requires that single security tax be at the highest rate imposed on the mortgage, bond, note, obligation, or other document involved.