Liability for Documentary Stamp Taxes on Misplaced Deed of Assignment

September 17, 1986 BIR RULING NO. 187-86 186 000-00 187-86 Gentlemen : This refers to your letter dated February 12, 1986 stating that a Deed of Assignment, assigning certain real estate properties to a corporation then in the process of incorporation, in exchange for shares of stock of said corporation, was executed on December 15, 1975; that the equivalent value in shares was executed in favor of the assignors (incorporators) and the properties were taken over by the new corporation. For some reason however the Deed of Assignment was not registered, and that as the original of the Deed can no longer be located a certified true xerox copy of the carbon original on file with the SEC has been secured and will be presented to the Register of Deeds for registration and transfer of the properties to the assignee corporation. cdtech Based on the foregoing representation, you pose the following question: "1. Are new documentary stamp taxes payable again on the misplaced Deed of Assignment? "2. If answer to Query is in the affirmative, what are the documentary stamp taxes due on said Deed, the same being in effect an assignment in exchange for shares of stock rather than pursuant to a sale? "3. For purposes of registration, what code shall govern the amount of stamp taxes due, those provided for in the law in force at the time of execution (as provided for in Sec. 222, Title VI of the National Internal Revenue Code) or those provided for under the present law? If the latter, under what provision of the Revenue Code is such (prospective) imposition justified? "4. What are the procedural requirements for paying said stamp taxes?" In reply thereto, I have the honor to inform you as follows: 1. If no documentary stamp tax has been affixed on the misplaced original Deed of Assignment, then the duplicate copy of such deed will be subject to the documentary stamp tax pursuant to Section 3 of the Revised Documentary Stamp Tax Regulations which provides that the duplicate copy of a document would only be subject to the stamp tax when the same has been substituted and used in place of the original and the original itself can not be reached by taxation . 2. Pursuant to Section 209 (formerly Section 245) of the Tax Code, as amended, a conveyance or deed whereby land is assigned or transferred to the purchaser is subject to documentary stamp tax based on the consideration or value received or contracted to be paid for such realty. A stock in a corporation is a valuable consideration for transfer of real properties (Section 177 Documentary Stamp Tax Regulations). Accordingly, if a parcel of land is exchanged with stocks in a corporation, the latter is the consideration, the value of which shall be the basis of the documentary stamp tax on the aforesaid deed . (BIR Ruling No. 109-82 dated April 6, 1982; BIR Ruling No. 214-85 dated December 5, 1985). 3. Section 186 of the Tax Code, as amended, requires that the corresponding documentary stamp taxes shall be paid at the time the "act is done or transaction had". Inasmuch as the misplaced Deed of Assignment was executed on December 15, 1975 the amount of documentary stamp tax due on the duplicate copy of such deed is that prescribed by Title VI of the Tax Code before its amendment by P.D. No. 1959 on October 15, 1984. 4. The procedural requirement in the payment of documentary stamp tax is provided for in Section 213 (formerly Section 249) of the Tax Code, as amended. However, payment of documentary stamp tax with denomination of P10.00 or more shall be effected as in the case of other internal revenue taxes by the issuance of the corresponding official receipt by authorized BIR personnel or the issuance of Bank Official Receipt by Authorized Banks. Upon payment of the required documentary stamp tax on the taxable document or instrument subject to tax, such document or instrument must bear the notation regarding the amount paid and the number and date of OR/CR Official Receipt on the original and every duplicate copy thereof, if there is any. (Section 6, Revenue Regulations No. 9-76 dated November 25, 1976). cdti Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner