BIR Ruling

August 7, 1969 Northern Cement Corporation Rm. 602, Sikatuna Bldg. Ayala Avenue, Makati, Rizal Attention: Mr . Ricardo G . Librea Finance Manager Gentlemen : This refers to your letter dated July 23, 1969 requesting for a ruling or order as to whether or not the Northern Cement Corporation (hereinafter referred to as the Company), is likewise exempt from the payment of documentary and science stamp taxes on the registration of documents such as mortgage contract, deed of sale and the like, pursuant to its grant of a certificate of Qualification for Tax Exemption No. 12 on August 20, 1968. In reply, I have the honor to inform you that in accordance with Section 79-A of the mining Act, (C.A. 137), as amended by Republic Act No. 3823, new mines and old mines which resume operation, when certified to as such by the Secretary of Agriculture and Natural Resources upon recommendation of the Director of Mines, shall be granted five years complete tax exemptions, except income tax, from time of its actual bona fide orders for equipment for commercial production. There is no question that the exemption includes the documentary stamp tax. In the light of the provisions of Sec. 210 of the Tax Code, however, the documentary stamp tax may be paid either by the person making, signing issuing, accepting, or transferring the document, instrument, and papers and/or acceptance, assignments, sales and transfer of the obligation, right or property incident to the transaction so had or accomplished. Thus in a mortgage undertaking for instance, the tax may be paid by either the mortgagor or mortgagee. In view of this particular character of the documentary stamp tax, this Office had consistently ruled that where a tax exempt person is party to a taxable transaction, the tax is nonetheless due and payable, the same to be paid by the other party to the transaction. Accordingly, your inquiry has to be as it is hereby answered in the negative. LibLex Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue