P9.00 Documentary Stamp Tax — "Farm Management Contract"

March 3, 1981 BIR RULING NO. 049-81 243 002-79 049-81 Atty. Felisicimo Santiago Register of Deeds of Bukidnon Malaybalay, Bukidnon S i r : This refers to your letter dated June 18, 1980 to the Commissioner of Land Registration requesting a ruling on the amount of documentary stamp tax due on several documents designated as "Farm Management Contract" entered into by the San Miguel Corporation and several land owners. It appears that the amount of documentary stamp tax due on said documents depends on the question as to whether or not the agreement is a contract of lease or a contract of sale. In reply, please be informed that under the aforesaid contract, the land is turned over to San Miguel Corporation for development and management for a term not exceeding sixty (60) years, the corporation paying the owner annual guaranteed profits. Accordingly, since the owner gives to another the enjoyment or use of the land for a price certain and for a period not exceeding ninety-nine years, the contract is that of a contract of lease. (Art. 1643, Civil Code). Such being the case, since the contract is for more than three years, the amount of documentary stamp tax due thereon is P9.00 pursuant to Section 243 of the Tax Code, as amended. aisadc Very truly yours, RUBEN B. ANCHETA Acting Commissioner