Deed of Sale of Real Property is Subject to the Documentary Stamp Tax

May 23, 1960 BIR RULING NO. 249-60 The Register of Deeds Tagbilaran, Bohol S i r : In reply to your letter dated March 15, 1960, I have the honor to inform you that the deed of sale of real property is subject to the documentary stamp tax prescribed in section 233 of the National Internal Revenue Code if the consideration received for such realty exceeds two hundred pesos. Inasmuch as the consideration received by the vendors for sale of their land in favor of the Republic of the Philippines represented by the Civil Aeronautics Administration is only P100.00 the deed of sale covering the said transaction is exempt from tax. The acknowledgment is however, subject to the 30-centavo documentary stamp tax prescribed in section 225 of the Tax Code. casia As regards the question of whether or not a deed of sale of real property in favor of the Government for an amount exceeding P200.00 is subject to the documentary stamp tax prescribed in section 233 of the National Internal Revenue Code, I have the honor to quote hereunder the provisions of section 210 of the Tax Code: "SEC. 210. 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 time such act is done or transaction had." Pursuant to the above quoted provision of law the documentary stamp tax is due from the person making or signing the document. A deed of sale is a bilateral agreement which is signed by both parties. However, Article 1487 of our Civil Code provides that "the expenses for the execution and registration of the sale shall be borne by the vendor, unless there is a stipulation to the contrary". The documentary stamp tax on a deed of sale in favor of the Government should, therefore, be paid by the vendor. In case it is stipulated in the contract that the Government assumes the obligation of paying the tax, such agreement does not avoid payment of the tax. The Government pays for the account of the vendor and the amount paid is considered part of the purchase price of the property. cdi Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue