BIR Ruling

August 24, 1970 Philippine National Bank Manila Attention: Mr . Gabriel T . Deveza Asst . Manager S i r : This refers to your letter dated August 4, 1969 requesting information on the queries posed by Commerzbank, stated as follows: "1. What stamp duties, if any, and at what rate are imposed on bills of exchange and promissory notes in your country? Please indicate any differences in duty on bills of exchange and promissory notes. "2. Are there any differences in the duty imposed depending on whether the bills of exchange and promissory notes are payable inside or outside your country? cd "3. Are there any differences in duty between promissory notes and/or bills of exchange made and/or drawn at a place outside your country? This question can naturally only apply to such instruments which, if they have been made and/or drawn at a place outside your country, are at least payable in your country." In reply, I have the honor to inform you that bills of exchange and promissory notes drawn and made payable within the Philippines are subject to the documentary stamp tax at the rate of P0.04 on each P200.00 or fractional part thereof, of the face value of any such promissory note and bill of exchange pursuant to Section 217 of the Tax Code. Bills of exchange drawn abroad and payable in the Philippines are subject to the documentary stamp tax at the rate of P0.06 on each P200.00 or fractional pert thereof, of the face value of any such bill of exchange pursuant to Section 218 of the said Code; those drawn in but payable outside the Philippines is subject also to P0.06 on each P200.00 or fractional part thereof pursuant to Section 219 of the same Code. Promissory notes issued in a foreign country but negotiated in the Philippines as well as those issued in the Philippines but negotiated abroad are likewise subject to the P0.06 on each P200.00 or fractional part thereof pursuant to Sections 217 and 214 of the Tax Code, and Sections 26 and 42 of Revenue Regulations No. 26, applied by analogy. In addition to the documentary stamp tax, the said documents are also subject to the science stamp tax imposed by Republic Act No. 5448, the amount thereof being the same as the amount of documentary stamp tax due on said documents. Consequently, the aforementioned documents should be affixed with both the ordinary documentary stamps and the science stamps. Should you desire further information on the matter, we refer you to Title VI of the National Internal Revenue Code and Section 4 of Republic Act No. 5448. aisadc Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue