Request for Authority to Pay Documentary Stamp Tax due on Insurance Policies in Advance or at the Beginning of Each Month

June 11, 1986 BIR RULING NO. 073-86 249 000-00 073-86 Gentlemen : This refers to your letters dated April 10 and July 16, 1985 requesting authority to pay documentary stamp tax due on insurance policies in advance or at the beginning of each month and every month thereafter, the amount thereof to be based on the previous month's policy register. It is represented that the maintenance of the premium register is a requirement of the Insurance Commission; that it is in loose leaf form as authorized by our office under Authority No. BT-69-LA-174 dated January 14, 1969, that the register contains the following columns: policy number, premiums and documentary stamps, etc., among others; thus, from the entries thereon the correct amount of documentary stamps can be easily verified and checked; and that the Philippine Home Assurance Corporation keeps separate loose leaf premium registers for a) fire insurance, b) marine insurance, c) motor car insurance, d) bonds, c) personal accident insurance, and f) aviation and other casualties insurance. cdt In reply, please be informed that pursuant to Revenue Regulations No. 3-75, amending Section 203 of Regulations No. 26 (Documentary Stamp Tax Regulations) and implementing Section 249 of the Tax Code, pertinent portion of which is quoted hereunder as follows: ". . . In meritorious cases . . . the Commissioner of Internal Revenue, may, in his discretion, authorize . . . that with respect to insurance policies the documentary stamps shall be adhered to the register copy or premium register; . . ." permission is hereby granted to your company to pay the documentary stamps in advance by indicating the amount and official receipt number on the premium register and for every issue of insurance policy by that company. It is, however, required that the "Continuous Form of Computer Paper" used as premium register shall be the kind that is serially pre-numbered and shall be registered first with this Office as loose leaf blank sheets or plain paper but with serial numbers before these are fed to the computer machine; and that to avoid the occurrence of a situation where the tax paid is advance is less than the tax due for the month, you should put up a reserve fund to answer for any deficiency at the end of the month, the same to be replenished every now and then or as soon as the necessity arises. Damaged or cancelled or unused sheets with their respective numbers shall still form part of the record or premium register. cd Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner