BIR Ruling

September 16, 1969 Danao City Development Bank Danao City Attention: Mr . Vicente D . Urgel, Jr . Managing-Director Gentlemen : This is with reference to your letter dated March 3, 1969 to the BIR, Regional Director, Cebu City, requesting exemption from the payment of the documentary and science stamp taxes on every certificate and check issued by the Danao City Development Bank, which was referred to this Office for final appropriate action. In reply, I have the honor to inform you that in accordance with Section 10 of Republic Act No. 4887, amending Republic Act No. 4093, all private development banks, with net assets not exceeding ten million for Class C, twenty million for Class B, and thirty million for Class A banks, excluding the counterpart capital and paid-in by the Development Bank of the Philippines, shall be totally exempt from the payment of all taxes, charges and fees of whatever nature and description except from compensating tax and tariff duties. It appearing that the Danao City Development Bank is organized under the aforesaid Act and falls under the category Class "C", mentioned in the law, it is, therefore, exempt from the payment of the documentary and science stamp taxes on checks and stock certificates issued by it. However, in view of the particular character of the documentary stamp tax, this Office, has consistently ruled that were tax exempt person is party to a taxable transaction. Accordingly, in cases where there are particular named drawees, the aforesaid tax may be shifted to the drawees of the checks and/or persons to whom the stock certificates are issued. cdlex Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue