Exemption of Ship Mortgage from DST

June 29, 1988 BIR RULING NO. 290-88 195 068-83 290-88 Gentlemen : This refers to your letter dated May 3, 1988 requesting in behalf of your clients, Credit Commercial de France (CCF) and Banque France-Hellenique De Commerce International Et Maritime S.A. (BFH), for a ruling exempting from the documentary stamp tax the ship mortgage executed abroad by Jane Shipping Inc. (JS) in favor of your clients. It is represented that JS is a non-resident foreign corporation not doing business in the Philippines and organized and existing under the laws of Liberia, while your clients CCF and BFH, are non-resident foreign corporations existing under the laws of the Republic of France and the Republic of Greece, respectively; that to secure a loan, JS executed in Athens, Greece, a First Priority Naval Mortgage on the vessel MV "Alejandras Grace" in favor of CCF and BFH; and that at present, the vessel is being leased by JS under a bareboat charter to Mabuhay Shipping Corporation, a domestic corporation. In reply, please be informed that the aforesaid First Priority Naval Mortgage, being executed abroad is not subject to the documentary stamp tax imposed by Section 195 of the Tax Code. This is in accordance with the rulings previously issued by this Office to the effect that the documentary stamp tax, being an excise tax, is applicable only to transactions effected and consummated within the Philippines. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner