Tax Credit Certificates as Valid Payments of Documentary Stamp Tax

April 17, 1990 BIR RULING NO. 058-90 173 000 058-90 Gentlemen : This refers to your letter dated May 24, 1989 requesting clarification from this Office as to whether it would be in order for you to continue accepting tax credit certificates as valid payments of documentary stamp tax on insurance policies made on your behalf by your assured, Aris (Phil.) Inc., through its tax credit under Tax Credit Certificate No. 1413 issued by the Board of Investments (BOI). In reply, please be informed that your request is answered in the affirmative. Under Section 173 of the Tax Code, documentary stamp tax is payable by the person making, signing, issuing, accepting or transferring the document, instrument and paper. This provision leaves the tax to be paid indifferently by either party. (Sta. Clara Lumber Company, Inc. vs. Jose Araas, CTA Case No. 502, June 12, 1959). Accordingly, in the instant case, you, as the insurer or the assured, is liable for the payment of the documentary stamp tax on the insurance policies issued by you. Such being the case, since under Article 21 of the Omnibus Investments Code of 1987, BOI tax credit certificates can be used to pay taxes, duties, charges and fees due to the National Government, your assured may utilize its tax credit against the payment of documentary stamp tax due on said insurance policies. It must be noted, however, that whenever a tax credit certificate is used to pay taxes, duties, charges and fees to the National Government the holder in due course must first secure a debit memo from the BOI. Very truly yours, (SGD.) JOSE U. ONG Commissioner