Legal basis and governing provisions
- Section 1 grounds the Regulations on Section 244, in relation to Sections 173, 200 and 245 of the National Internal Revenue Code of 1997.
- Section 2 ties documentary stamp tax liability to the transactional parties and to how tax applies to the document or the transaction.
- Section 3 makes the default mode of payment and remittance follow Section 200 of the National Internal Revenue Code of 1997.
- Section 3(b)(2) anchors personal liability and related consequences to Title X of the Code for failure to pay on time.
Policy statement and purpose
- Section 1 requires the Regulations to specifically identify (a) persons liable for documentary stamp tax and (b) which parties are responsible for payment and/or remittance under certain conditions.
Documentary stamp tax nature and liability rules
- Section 2(a) provides that documentary stamp taxes under Title VII of the National Internal Revenue Code of 1997 are taxes on certain transactions.
- Section 2(a) imposes the DST against “the person making, signing, issuing, accepting, or transferring” the document or facility evidencing the transaction.
- Section 2(a) states that, in general, documentary stamp tax may be imposed on the transaction itself or upon the document underlying such act.
- Section 2(a) provides that any of the parties may be liable for the full amount of the tax due, while allowing parties to agree among themselves on who shall bear the tax or how it will be shared.
- Section 2(b) provides an exception: when one party is exempt from DST under Title VII of the Code, the other party that is not exempt is the one directly liable for the tax.
Default payment/remittance mode and exceptions
- Section 3(a) provides that, unless otherwise provided, any party to the taxable transaction shall pay and remit the full amount of DST in accordance with Section 200 of the National Internal Revenue Code of 1997.
- Section 3(b)(1) restates the exemption exception: if one party is exempt, the other (non-exempt) party directly pays and remits the DST, unless otherwise provided by the Regulations.
- Section 3(b)(2) states that if the tax-exempt party is among the persons enumerated in Section 3(c)(4), the exempt party is constituted as agent of the Commissioner for collection and must remit the tax it collects in the same manner under Section 200.
- Section 3(b)(2) further provides that if the agent-exempt party fails to collect and remit as required, it becomes personally liable for the tax, in addition to penalties under Title X of the Code for failure to pay the tax on time.
- Section 3(b)(3) requires the agent-exempt party to issue an acknowledged receipt for DST collected and to remit the collected tax consistent with the Regulations.
Who remits DST—general rule and enumerated exceptions
- Section 3(c) provides the general rule: the full amount of DST under Title VII may be remitted by any party or parties to the taxable transaction, except in the cases listed in Section 3(c)(1) to (4).
- Section 3(c)(1) provides a specific rule for DST on bonds, debentures, certificates of indebtedness, deposit substitute, or other similar instruments: the person who issued the instruments remits the tax.
- Section 3(c)(2) provides a specific rule for DST on original issue of shares of stock: the corporation issuing the shares remits the tax due on the issuance.
- Section 3(c)(2) defines the timing of “issued shares” for this purpose: the shares are considered issued upon acceptance by the corporation of the subscribers’ subscription, even if actual delivery of the certificate occurs later.
- Section 3(c)(3) provides the remitter for DST on Jai-Alai, Horse Race, Lotto or other Authorized Numbers Games: the proprietor or operator remits.
- Section 3(c)(3) adds an exemption consequence for these games: if the proprietor/operator is exempt, it must collect the tax from the other party not exempt and remit as prescribed.
- Section 3(c)(4) provides that when one of the entities enumerated below is a party to the taxable document/transaction, that entity must be responsible for remittance under Title VII, subject to the agent-collection rule when the entity is exempt (referring to Section 3(b)(2)).
- Under Section 3(c)(4), remittance is the responsibility of the following entities (when applicable to the taxable DST transaction):
- (a) A bank, quasi-bank or non-bank financial intermediary, finance company, or insurance, surety, fidelity, or annuity company.
- (b) The proprietor or operator of Jai-alai, Horse-racing, Lotto and other Authorized Numbers Games.
- (c) The Philippine Stock Exchange (PSE), for shares of stock and other securities traded in the local stock exchange.
- (d) A pre-need company on sale of pre-need plans under Section 186 of the Code, with “pre-need company” including providers of pre-need health care services, educational plan, memorial plan, pension plan, and other similar services.
- (e) An educational institution regarding issuance of taxable certificates (e.g., Diploma, Transcript of Record, and other documents taxable as certificates under Section 188 of the Code).
- (f) Warehouse operators regarding warehouse receipts taxable under Section 189 of the Code.
- (g) The Corporation regarding stamp tax on “Proxies” in exercising stockholders’ voting right taxable under Section 192 of the Code (e.g., appointment of a proxy for Board elections).
- (h) The transportation contractor regarding Bills of Lading or Receipts taxable under Section 191 of the Code.
- (i) Franchise grantees and other taxpayers paying a fixed percentage of the prescribed taxable base in lieu of all internal revenue taxes in the manner covered by the Code provisions referenced.
Use of online electronic DST imprinting machine
- Section 4 requires that, unless expressly exempted by the Commissioner on meritorious grounds, specified taxpayers shall use the “on-line electronic DST imprinting machine” for payment and remittance of DST.
- Under Section 4(a), taxpayers required to use the machine include a bank, quasi-bank or non-bank financial intermediary, finance company, or insurance, surety, fidelity, or annuity company.
- Under Section 4(b), the PSE must use the machine for shares of stock and other securities traded in the local stock exchange.
- Under Section 4(c), shipping and airline companies must use the machine.
- Under Section 4(d), a pre-need company on sale of pre-need plans under Section 186 of the Code must use the machine.
- Under Section 4(e), the Commissioner may require such other industries to use the machine.
- Section 4 defines an “on-line electronic DST imprinting machine” as a device capable of imprinting the value of the stamp tax and other data on the taxable document, with remote loading and resetting feature, and/or with a built-in modem to load/purchase stamp tax value through an on-line set-up or electronic data transmission with the BIR, enabling BIR monitoring of actual usage or stamp consumption.
Repeal, amendment, and effect on existing issuances
- Section 5 provides that any revenue issuance inconsistent with the Regulations is considered amended, modified or revoked accordingly.
- Section 6 provides the effectivity rule: fifteen (15) days after publication in a newspaper of general circulation.