Borrowers of a Bank is Subject Only to One Documentary Stamp Tax on Both the Promissory Note and the Mortgage Executed to Secure Said Note

December 8, 1981 BIR RULING NO. 263-81 248-00 000-74 263-81 Republic Planters Bank Legaspi Tower 300 Roxas Blvd., corner Vito Cruz M a n i l a Attention: Mr . Antonio P . Acyatan Vice-President Gentlemen : This refers to your letter dated November 4, 1980 and February 20, 1981 requesting a ruling on whether your borrowers should pay documentary stamp tax both on their real estate/chattel mortgage and again on their promissory notes. It is represented that the Central Bank, in its regular examination of your various field offices, has repeatedly excepted to your practice of not requiring your borrowers the payment of documentary stamp tax on the promissory notes secured by real estate or chattel mortgage. In reply, please be informed that under Section 248 of the Tax Code of 1977, as amended, "when any bond, note or other obligation is secured by a mortgage, pledge or deed of trust, or by assignment or transfer of any documentary security, one tax only shall be collected upon these papers, the tax to be at the highest rate imposed on the mortgage, bond, note, obligation, or other documents, as the case may be." Accordingly, a borrower of that bank is subject only to one documentary stamp tax on both the promissory note and the mortgage executed to secure the said note, the tax being based on the document having the highest rate. Very truly yours, RUBEN B. ANCHETA Acting Commissioner