Ship Mortgage - No Doc. Stamp Tax

February 16, 1993 BIR RULING NO. 068-93 SHIP MORTGAGE NO DOC. STAMP TAX 195 164-89 068-93 Sycip Salazar Hernandez & Gatmaitan 103 Paseo de Roxas 1200 Makati, Metro Manila Attention: Atty . Roderick R . C . Salazar III This refers to your letter dated December 11, 1992 requesting in behalf of your client, The HongKong and Shanghai Banking Corporation Limited (The Bank), for a ruling exempting from the documentary stamp tax the ship mortgage executed abroad by Atlas Marine Transport Corporation (Atlas) in favor of your client. It is represented that Atlas is a non-resident foreign corporation not doing business in the Philippines and organized and existing under the laws of the Republic of Panama while the Bank is a HongKong Corporation; that to secure a loan, Atlas executed a first preferred ship mortgage in HongKong on the vessel MV "CS Everest" in favor of the Bank; that at present, the vessel is being leased by Atlas under a bareboat charter to Ambassador Shipping Corporation, a domestic corporation. In reply, please be informed that the aforesaid First Preferred Ship Mortgage being executed abroad is not subject to the documentary stamp tax imposed by Section 195 of the Tax Code. This is in accordance with the rulings previously issued by this Office to the effect that the documentary stamp tax, being an excise tax, is applicable only to transactions effected and consummated within the Philippines. cdt JOSE U. ONG Commissioner of Internal Revenue