Exemption from the Payment of All Taxes

February 8, 1980 BIR RULING NO. 023-80 National Grains Authority 101 E. Rodriguez Sr. Avenue Quezon City Attention: Mr . Pablo V . Pablo, Jr . Deputy Administrator Gentlemen : This refers to your letter dated February 15, 1979 requesting confirmation that you are exempt from the payment of all taxes including documentary and science stamp taxes, tariff, duties, etc., pursuant to Presidential Decree No. 1485, which took effect on June 11, 1978, reading: cdti "Section 6, par (d) Exemption In furtherance to the effective implementation of the policy enunciated in this decree the Authority is hereby declared exempt: "i. From payment of all taxes, duties, fees, imposts, charges, costs and restrictions to the Republic of the Philippines, its provinces, cities, municipalities, including the taxes, duties fees, imposts and other charges provided for under the Tariff and Customs Code of the Philippines, R.A. No. 1937, as amended by Presidential Decree No. 34, dated October 27, 1972, and Presidential Decree No. 69, dated November 24, 1972, and all filing, docket, and service fees, bonds and other charges or costs in any court or administrative proceedings in which the Authority may be a party. ii. From all income taxes, franchise taxes and realty taxes to be paid to the National Government, its provinces, cities, municipalities and other government agencies and instrumentalities; and iii. From all duties, arrastre fees in so far as the Government's share is concerned, including all charges and fees imposed under Presidential Decree No. 857, compensating taxes and advance sales taxes, wharfage fees and tonnage dues on import-export of goods required for its operations and projects; All documents or contracts executed by or in favor of the authority shall also be exempt from the payment of documentary and science stamp taxes and registration fees; Provided, however , that this exemption shall not apply to taxes and assessments payable by persons or entities transacting business with the Authority." In reply, I have the honor to inform you that under the above-quoted provision of P.D. No. 1485, you are exempt from internal revenue taxes for which you are directly liable. However, as regards documentary stamp taxes, please be informed that pursuant to Section 222 of the Tax Code, the documentary stamp tax due on documents shall be paid by the person making, signing, issuing, accepting or transferring the same. This provision of the law was interpreted by the Court of Tax Appeals as placing the burden of paying the tax, indifferently on either party to the transaction evidenced by a document on which stamps are due. (Sta. Clara Lumber Co., Inc. versus Jose Araas, C.T.A. Case No. 502, June 12, 1959). Thus, in your contract with another party who is not tax exempt, the latter shall be liable for the payment of the documentary stamp due on the related contract document. Very truly yours, RUBEN B. ANCHETA Acting Commissioner