Title
Documentary Stamp Tax Rationalization Act
Law
Republic Act No. 7660
Decision Date
Dec 23, 1993
Republic Act No. 7660 rationalizes the structure and administration of the documentary stamp tax in the Philippines, specifying rates and conditions for the collection of taxes on various documents, instruments, loan agreements, and papers.
A

Stamp Tax on Bonds, Debentures, and Certificates of Indebtedness

  • Imposes a tax of ₱1.50 for every ₱200 or fractional part of the face value.

Stamp Tax on Original Issue of Certificates of Stock

  • Tax of ₱2.00 for every ₱200 or fractional part of par value.
  • For stocks without par value, tax based on actual consideration received.
  • Stock dividends taxed on actual value.

Stamp Tax on Sales, Transfers, and Agreements of Stocks and Securities

  • Tax of ₱1.00 per ₱200 or fractional part of par value, increasing to ₱1.50 in 1996.
  • Only one tax per sale or transfer regardless of certificate endorsement.
  • Stocks without par value: tax equivalent to 25% of original issue tax.

Stamp Tax on Certificates of Profits or Interests in Property

  • Tax of ₱0.50 per ₱200 or fractional part of face value on certificates and transfers.

Stamp Tax on Bank Checks, Drafts, and Certificates of Deposit Not Bearing Interest

  • Tax of ₱1.25 per item, increasing to ₱1.50 in 1996.

Stamp Tax on Loan Agreements and Related Instruments

  • Tax of ₱0.30 per ₱200 or fractional part on loan agreements, promissory notes, bills of exchange, drafts, instruments, securities issued by the government.
  • Only one tax on loan agreement or promissory notes whichever is higher.
  • Exemption for installment purchases up to ₱250,000 for personal use.

Stamp Tax on Insurance Policies

  • Property insurance premiums taxed at ₱0.50 per ₱4 or fractional part.
  • No tax on reinsurance contracts.
  • Fidelity and other specified insurance policies also taxed at ₱0.50 per ₱4.

Stamp Tax on Annuities and Pre-Need Plans

  • Annuities taxed at ₱1.50 per ₱200 or fractional part of capital.
  • If capital unknown, basis is 33 1/3 times annual income.
  • Pre-need plans taxed at ₱0.50 per ₱500 or fractional part.

Stamp Tax on Indemnity Bonds

  • Tax set at ₱0.10 per ₱4 or fractional part, rising to ₱0.30 in 1996.

Stamp Tax on Certificates Issued by Officials

  • Fixed tax of ₱10 per certificate, increasing to ₱15 in 1996.

Stamp Tax on Warehouse Receipts

  • Tax of ₱10 per receipt, increasing to ₱15 in 1996.
  • No tax if value does not exceed ₱200 in a calendar month.

Stamp Tax on Gambling Tickets

  • Tax of ₱0.10 per ticket plus additional tax if ticket price exceeds ₱1.

Stamp Tax on Bills of Lading or Receipts

  • Tax varies from ₱1 up to ₱10 depending on goods value.
  • Exemption for freight tickets covering accompanied baggage.

Stamp Tax on Proxies for Company Elections

  • Tax of ₱10 per proxy, increasing to ₱15 in 1996.
  • Exempts religious, charitable, literary associations.

Stamp Tax on Powers of Attorney

  • Tax of ₱5 per power of attorney.
  • Excludes powers related to government claims collection.

Stamp Tax on Leases and Hiring Agreements

  • Initial tax of ₱3 for first ₱2,000 value; ₱1 for each additional ₱1,000 or fraction per year.

Stamp Tax on Mortgages, Pledges, and Deeds of Trust

  • ₱20 if amount secured ≤ ₱5,000; ₱10 for each additional ₱5,000 or fraction.
  • Tax computed on amount loaned at execution time.
  • Additional tax on subsequent advances.

Stamp Tax on Deeds of Sale and Conveyance of Real Property

  • ₱15 for consideration/value up to ₱1,000; ₱15 additional for each additional ₱1,000 or fraction.
  • True market value may be assessed if under-declared.

Stamp Tax on Charter Parties and Similar Instruments

  • Tax rates based on vessel gross tonnage and duration.
  • Base taxes: ₱500, ₱1,000, ₱1,500; with monthly increments for contracts over six months.

Allocation of Incremental Revenues

  • 1994-1995: 25% to Unified Home-Lending Program for socialized housing, community mortgage, and land development.
  • 1996 onwards: 25% to National Health Insurance Program.
  • 25% annually to Special Education Fund for education facilities and resources.
  • 50% annually to Special Infrastructure Fund for public works and development projects.
  • Specific percentages allocated to depressed provinces with equity-based disbursement.
  • Administrative expenses capped at 1% of allocated funds.

Implementation and Effectivity

  • Secretary of Finance to issue rules and regulations upon recommendation.
  • Repeals inconsistent laws.
  • Severability clause applies.
  • Law effective 15 days after publication in official or national newspapers.

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.