Exemption of a Coal Operating Contractor from the Payment of Documentary Stamp Taxes

May 29, 1992 BIR RULING NO. 173-92 173; 193; 194; 195; 196; 197 000-00 173-92 Semirara Coal Corporation Hermis Bldg., Salcedo Street Legaspi Village, Makati Metro Manila Attention: Mr . Manuel G . Domingo, Jr . President Gentlemen : This refers to your letter dated June 21, 1991 which was referred to this Office by the Revenue Service, Department of Finance, requesting for a definitive ruling as to whether you are exempt from the payment of documentary stamp taxes imposed by Section 193 to 197 of the Tax Code. LexLib It appears that you are a coal operating contractor, being the assignee of a Coal Operating Contract executed on July 11, 1977 by and between the Energy Development Board (now Office of Energy Affairs) and Vulcan Industrial & Mineral Exploration Corporation and Sulu Sea Oil Development Corporation, for the exploration and development of coal properties; that Section 16 of P.D. 972 otherwise known as the Coal Development Act of 1976 contains this tax exemption provision: "Sec. 16. Incentives to Operators . The provisions of any law to the contrary notwithstanding, a contract executed under this Decree may provide that the operator shall have the following incentives: a) Exemption from all taxes except income tax"; xxx xxx xxx The aforesaid tax and duty exemptions, which were withdrawn by E.O. No. 93, were restored in full by the Fiscal Incentives Review Board under FIRB Resolution No. 19-87 dated June 24, 1987. In reply, please be informed that on the basis of the aforequoted provision, you are exempt from the payment of the corresponding documentary stamp taxes imposed upon documents, instruments and papers referred to in Sections 193, 194, 195, 196 and 197 all of the Tax Code, as amended. However, the other party to the taxable document/s who is not exempt will be the one directly liable for the payment of the tax pursuant to Section 173 of the same Code. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue