Request for Exemption from Payment of DST on Deed of Real Estate Mortgage between PASAR and DBP

June 25, 1986 BIR RULING NO. 095-86 186 067-86 095-86 Gentlemen : This refers to your letter dated January 20, 1986 addressed to our Regional Director at Tacloban City requesting exemption from the payment of the documentary stamp tax on the Deed of Real Estate Mortgage entered into by and between Philippine Associated Smelting and Refining Corporation (PASAR) and the Development Bank of the Philippines (DBP). cdt Your request is based on the opinion of your Chief Counsel to the effect that the aforesaid Deed of Real Estate Mortgage is exempt from the documentary stamp tax inasmuch as PASAR, which assumed payment of the liability is tax exempt being a duly registered export producer under P.D. No. 1789, as amended, otherwise known as the Omnibus Investments Code. In reply, I have the honor to inform you in the affirmative Under the law in force at the time of the execution of the aforesaid Deed of Real Estate Mortgage which is Section 222 (now Section 186) of the Tax Code before its amendment by P.D. No. 1994 which took effect on January 1, 1986, reading: "Sec. 222. Stamp Taxes Upon Documents Instruments, and Papers . Upon documents, instruments, and papers, and upon acceptances, assignments, sales, and transfers of the obligation, right, or property incident thereto, there shall be levied, collected and paid, for and in respect of the transaction so had or accomplished, the corresponding documentary stamp taxes prescribed in the following sections of this Title, by the person making, signing, issuing, accepting, or transferring the same, and at the time such act is done or transaction had." the documentary stamp tax is paid indifferently by either party, and accordingly, the party assuming payment of said tax becomes directly liable therefor. Hence, as PASAR, the party assuming payment is tax-exempt, the Deed of Real Estate Mortgage is exempt from documentary stamp tax. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner