Non-inclusion from Exemption — Employees of Service Contractors

December 12, 1979 BIR RULING NO. 120-79 This refers to your letter dated August 1, 1979 requesting opinion based on the following facts: "We cover, among others, executives and employees of certain companies in our country engaged in oil exploration. In the course of said medical insurance coverages, we bill these companies for the cost of the documentary stamps as required of and allowed us by law. One of these companies raises exemption from said payment and claims P.D. No. 87 as authority." In reply thereto, I have the honor to inform you that the exemption from tax except income tax under Presidential Decree No. 87, known as the "Oil Exploration Act" is granted only to service contractors in connection with their petroleum explorations. This exemption does not extend to the employees of aforesaid service contractors engaged in said petroleum operations. Accordingly, the medical insurance policies covering said employees are subject to documentary stamp tax, the tax to be paid by the person making, signing, issuing, accepting or transferring the same, and at the time such act is done or transaction had. (Section 222, Tax Code of 1977, as amended.)