Exemption of the Ship Mortgage from the Documentary Stamp Tax

April 12, 1989 BIR RULING NO. 069-89 195 068-83 069-89 Gentlemen : This refers to your letters dated March 2 and 17, 1989 requesting in behalf of your client, The Royal Bank of Scotland plc, for a ruling exempting from the documentary stamp tax the ship mortgage executed abroad by Jessie Maritime Limited in favor of your client. cdtech It is represented that Jessie Maritime Limited is a non-resident foreign corporation not doing business in the Philippines and organized and existing under the laws of Hong Kong while The Royal Bank of Scotland plc is also a non-resident foreign corporation with office at 6 Battery Road, #18-01 Standard Chartered Bank Blg., Singapore 0104; that the former is the owner of motor vessel "Daphne" (later renamed "J. Jasmine"); and that to secure a loan, Jessie Maritime Limited executed abroad a First Preferred Panamian Mortgage (copy attached) on the vessel m.v. "J. Jasmine" in favor of your client. In reply, please be informed that the aforesaid First Preferred Panamian Mortgage, being executed abroad, is not subject to the documentary stamp tax imposed by Section 195 of the Tax Code. This is in consonance 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. cd Very truly yours, (SGD.) JOSE U. ONG Commissioner