Affixture of the Requisite Documentary Stamps

June 3, 1988 BIR RULING NO. 236-88 175 000-00 236-88 Gentlemen : This refers to your letter dated March 24, 1988 requesting a ruling as to whether a corporation is liable to documentary stamp tax if it did not issue or deliver the necessary stock certificates to the stockholders but only recorded the stockholder's investment in its Stock and Transfer Book. In reply, please be informed in the negative. Pursuant to Section 175 (formerly Section 188) of the Tax Code as amended, the documentary stamp tax is imposed on every original issue of certificates of stocks. It has been held that the mere preparation of a certificate of shares in favor of a subscriber payable in installments and signing thereof by the officers of a mutual building and loan association without affixing thereto the corresponding documentary stamps does not constitute an issuance of said certificates despite the notice by the secretary advising the subscriber of the issuance of the certificate in his name and further stating that the certificate was at his disposal whenever he had time to come and get it. (Tuazon vs. La Provisora Filipina, G.R. 44579, 7 Law Journal, March 15, 1939) In other words, it is the actual issuance of the certificates of stocks to the stockholders that makes the corporation liable to affix the requisite documentary stamps. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner