Chattel Mortgage which was Executed Abroad is Not Subject to Documentary Stamp Tax

November 7, 1991 BIR RULING NO. 235-91 195 068-83 235-91 Gentlemen : This refers to your letter dated October 31, 1991, requesting a ruling as to whether or not a chattel mortgage which was executed abroad is subject to the documentary stamp tax under the National Internal Revenue Code. It appears that your client, TNAC Corporation (TNAC for brevity), a non-resident foreign corporation organized and existing under the laws of Delaware, obtained a loan in the amount of $48,591,614.00 from Nichemen Europe B.V., another foreign corporation organized and existing under the laws of the Netherlands; that to secure the loan, TNAC executed an Aircraft Chattel Mortgage in favor of Nichemen; that the said Aircraft Chattel Mortgage was executed in San Francisco, California, U.S.A. on December 5, 1990; that the aircraft (A310-300) subject-matter of the chattel mortgage, is now being leased to Air Niugini; and that TNAC now wants to register the said chattel mortgage in appropriate jurisdictions, including but not limited to Australia, HongKong, Papua New Guinea and the Philippines. In reply, please be informed that the aforesaid Aircraft Chattel Mortgage is not subject to the documentary stamp tax imposed by Section 195 of the Tax Code because being an excise tax, it is applicable only to transactions effected and consummated within the Philippines. cdtech This revokes the letter dated August 7, 1991 of Revenue District Officer Potenciano E. Pineda of Revenue District Office No. 32, Makati East, requiring your client, TNAC Corporation to pay the amount of P1,675,568.75 as documentary stamp tax inclusive of surcharge, on said chattel mortgage. Very truly yours, (SGD.) JOSE U. ONG Commissioner