Ship Mortgage Exempt from Doc. Stamp Tax

April 18, 1993 BIR RULING NO. 150-93 SHIP MORTGAGE EXEMPT FROM DOC. STAMP TAX 195 164-89 150-93 Sycip, Salazar, Hernandez & Gatmaitan 105 Paseo de Roxas 1200 Makati, Metro Manila Attention: Atty . Roderick R . C . Salazar III This refers to your letter dated December 11, 1992 requesting in behalf of your client, the HongKong and Shanghai Banking Corporation Limited (The Bank), for a ruling exempting from the documentary stamp tax the ship mortgage executed abroad by Blanford Investment Limited (Blanford) in favor of your client. It is represented that Blanford is a non-resident foreign corporation not doing business in the Philippines and organized and existing under the laws of the Republic of Liberia while the Bank is a HongKong corporation; that to secure a loan, Blanford executed a first preferred ship mortgage in HongKong on the vessel MV "CSK Glory" in favor of the Bank; that at present, the vessel is being leased by Blanford under a bareboat charter to Ambassador Shipping Corporation, a domestic corporation. In reply, please be informed that the aforesaid First Preferred Ship Mortgage being executed abroad is not subject to the documentary stamp tax imposed by Section 195 of the Tax Code. This is in accordance with the ruling 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. cdtech VICTOR A. DEOFERIO, JR. Deputy Commissioner of Internal Revenue