BIR Ruling No. 175-83

October 11, 1983 BIR RULING NO. 175-83 Gentlemen : In reply to your letter dated February 18, 1983, please be informed that as a corporation registered with the Board of Investments under R.A. 6135, you are exempt from all internal revenue taxes except income tax on a graduated basis, pursuant to Section 8(a) of R.A. 5186, as incorporated in Article 46(a), Chapter II of Title IV of P.D. No. 1789, otherwise known as the Omnibus Investments Code, to the following extent: (1) One hundred per cent (100%) for the first five years; (2) Seventy-five per cent (75%) for the sixth through the eighth years; (3) Fifty per cent (50%) for the ninth and tenth years; (4) Twenty per cent (20%) for the eleventh and twelfth years; and (5) Ten per cent (10%) for the thirteenth through the fifteenth year. However, the above exemption privilege which includes exemption from documentary stamp tax, shall cover only your direct tax liabilities as may be imposed in connection with the operation of your registered pioneer project and shall exclude such taxes as may be transferred or passed on to you either by business practice or mere contractual arrangement. (Section 6, Rule XV, Rules and Regulations implementing P.D. 1789). Accordingly, since under Section 222 of the Tax Code, as amended, the documentary stamp taxes were the direct liabilities of the banks and insurance companies which issued the taxable documents and the said taxes were passed on to you either by business practice or mere contractual arrangements, you cannot claim exemption for the payment of the documentary stamp tax on surety bonds, insurance policies, promissory notes and checks. In view thereof, your request for tax credit is hereby denied for lack of legal basis. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue