Basis of Computation of the Documentary Stamp Tax

April 25, 1989 BIR RULING NO. 082-89 196 000-00 082-89 M a d a m : This refers to your letter dated October 10, 1988 stating that you bought two real properties on July 30, 1979 (not June 1979) for a total amount of P200,000.00 which you now intend to register in your name; that the corresponding documentary stamp taxes due from said sales were not paid by the transferor; and you now wish to pay the same yourself; that upon presentation for payment, you are being assessed on the adjusted basis of the value of the properties based on the present zonal valuation; and that you disagree with the said assessment since you are of the opinion that the zonal valuation which was adopted only in 1986 should not be applied to a 1979 transaction. Based on the foregoing representations, you now request confirmation of your opinion that the documentary stamp tax due would be the rate prevailing at the time of sale and that the basis would be the selling price of P200,000.00. In reply, please be informed that the documentary stamp on sales of real property shall be affixed at the time the taxable document is executed (BIR Ruling No. 304-88) and at the rates then in force (BIR Ruling No. 227-88). Accordingly, the deed of sale in question executed in July 1979 is subject to the documentary stamp tax at the rates then in force, i.e., P2.00 if the consideration exceeds P200.00 but does not exceed P1,000 and P8.00 for each additional P1,000.00 or fractional part thereof in excess of P1,000.00 of such consideration, pursuant to then Section 245 of the Tax Code. The documentary stamp tax due on the deed of sale in question shall be based on the amount of P200,000.00 and not the present zonal valuation of the properties if the same represents the correct amount of consideration for the sale of the real properties purchased by you on July 30, 1979. Under then Section 245 in case of an incorrect statement of the consideration which has reduced the amount of documentary stamp tax, the tax due shall be based on the properties true market value. cd Very truly yours, (SGD.) JOSE U. ONG Commissioner