BIR Ruling No. 233-82

August 11, 1982 BIR RULING NO. 233-82 222 127-79 233-82 Office of the President Malacaang, Manila Attention: Mr . Cesar A . Dumlao Presidential Finance Assistant Gentlemen : This refers to your letter dated July 16, 1982 requesting exemption from the payment of documentary stamp taxes on the Deed of Absolute Sale executed by and between the Lumang Bayan Realty Development Corporation (Seller) and the Government of the Republic of the Philippines (Buyer) of Office Condominium Units with an aggregate area of 5,847.10 square meters, more or less, located at Aduana St.,Intramuros, Manila, covered by Transfer Certificate of Title No. 118381 of the Registry of Deeds of Manila. cdti It appears in said Deed that the Buyer assumed payment of the documentary stamp tax. In reply, I have the honor to inform you that Section 222 of the Tax Code which reads: "Sec. 222. Stamp taxes upon documents, instruments, and papers . Upon documents, instruments, and papers, and upon acceptances, assignments, sales, and transfers of the obligation, right or property incident thereto, there shall be levied, collected and paid for and in respect of the transaction so had or accomplished, the corresponding documentary stamp taxes prescribed in the following sections of this Title, by the person making, signing, issuing, accepting, or transferring the same, and at the same time such act is done or transaction had." places the burden of paying the tax upon the parties to the contract and leaves the tax to be paid indifferently by either party, and accordingly, the party assuming payment of said taxes becomes directly liable therefor. (Sta. Clara Lumber Company, Inc.,vs. Jose Aranas, CTA Case No. 502, June 12, 1959) In the instant case, therefore, the Buyer, Government of the Republic of the Philippines, has become directly liable for the tax; and although it is a government unit it is subject to the documentary stamp tax in question, pursuant to Section 23 of P.D. No. 1177. However, it is entitled to either a tax subsidy or payments constituting equity contributions in which case, it shall not be required to pay cash or its equivalent. The revenue collecting agencies shall instead issue a "Payment Compliance Certificate" indicating the nature of the assessment and amount due. The subsidy shall be effected through journal vouchers or their equivalent. (see Joint Budget Circular No. 289 and pars. 4, 6 and 9, Finance Circular No. 2-78, implementing Sec. 23, P.D. 1177) Very truly yours, RUBEN B. ANCHETA Acting Commissioner