BIR Ruling No. 282-82

November 10, 1982 BIR RULING NO. 282-82 237-00 000-00 282-82 The Governor Central Bank of the Philippines M a n i l a S i r : This refers to your letter dated April 14, 1982 requesting a ruling on whether foreign loan agreements signed in the Philippines without the issuance of promissory notes, is subject to the documentary stamp tax. cdt It is represented that in pursuance of the public policy of the Government to develop Manila as a financial center in the Asia-Pacific region, the Central Bank has adopted the policy of encouraging the signing in the Philippines of foreign loan agreements involving Philippine borrowers, particularly foreign agreements of which the borrower is the Government itself or its agency; and that Philippine borrowers and foreign banks are however hesitant to sign loan agreements in the Philippines since they are concerned that the loan agreements will be subject to a documentary stamp taxes. In reply, please be informed that a foreign loan agreement to be executed in the Philippines is not subject to the documentary stamp tax. If the agreement is acknowledged before a Notary Public, the certificate of acknowledgment is subject to the documentary stamp tax of P1.50 (Sec. 237, Tax Code; Sec. 79, Regulations No. 26 or the Documentary Stamp Tax Regulations). However, if a mortgage, pledge or deed of trust is made as a security for the payment of the loan, such mortgage, pledge or deed of trust shall be subject to the documentary stamp tax imposed by Section 244 of the Tax Code. If a negotiable promissory note is issued, said note shall be subject to the documentary stamp tax imposed by Section 229 of the Tax Code. Very truly yours, RUBEN B. ANCHETA Acting Commissioner