Rider or Endorsement of an Insurance is Subject to DST in the Amount as the Original Contract of Insurance

November 27, 1968 BIR RULING NO. 037-68 Las Buenas Fabrica de Cigarillos, Inc. P. O. Box 1442 M a n i l a Attention : Mr . Jesus G . Sayson Gentlemen : This refers to your letter dated April 22, 1968 requesting clarification of our answer to the query in your letter dated February 22, 1968. cdi It appears that a certain property of that corporation, located at Grace Park, Caloocan City, was insured with the South Sea Surety & Insurance Co., Inc., that under this contract of insurance you paid the corresponding documentary stamp tax due thereon to the Insurance Company, in the amount of P100.80; that after a few months said property, consisting of a cigarette factory, was mortgaged to the Equitable Banking Corporation; that later you asked from the South Sea Surety & Insurance Co., Inc., an indorsement or rider in favor of the Mortgagee-Bank, said insurance company is again collecting the amount of P100.80 claimed to be an additional documentary stamp tax. You now would like to know whether Las Buenas Fabrica De Cigarillos, Inc., under said facts and circumstances, is still liable to pay the said additional documentary stamps to the South Sea Surety and Insurance Co., Inc. In accordance with the provisions of Section 235 of the Tax Code every assignment or transfer of policy or contract of insurance is subject to tax at the same rate as that imposed on the original instrument. (Sec. 55, Reg. No. 26 Dept. of Finance) The so-called rider or indorsement is equivalent to a transfer of policy of insurance. Such being the case it is subject to documentary stamp tax in the same amount as the original contract of insurance. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue