Pawnshop Ticket is Subject to Documentary Stamp Tax

September 24, 1987 BIR RULING NO. 305-87 208 000-00 305-87 Gentlemen : In reply to your letter dated July 17, 1987, please be informed that 1. The transaction between pawner and pawnee is a contract of pledge since it is actually a loan secured by a personal property. (Art. 2085, Civil Code of the Philippines) Accordingly, a pawnshop ticket showing that an article has been pawned therein for a stated amount is subject to the documentary stamp tax under Section 208 of the Tax Code as amended. The tax is paid on the sum of money hypothecated and not on the value of the property pledged. (Section 153, Documentary Stamp Tax Regulations) 2. Pursuant to Section 282(d) of the Tax Code, a surcharge of 25% shall be imposed upon each and every pawnshop ticket issued without the proper documentary stamp affixed therein, in addition to the amount of documentary stamp tax required to be paid. An assessment for documentary stamp tax may be issued covering ten (10) years which corresponds to the prescriptive period of assessment counted from the discovery of the omission to file return, as in the instant case [Sec. 269(a), Tax Code] 3. After the issuance of the corresponding assessment for documentary stamp tax, such assessment may be protested administratively by filing a request for reconsideration or reinvestigation within 30 days from receipt thereof; if the protest is denied in whole or in part, an appeal may be made to the Court of Tax Appeals within 30 days from receipt of the decision. (Section 270, Tax Code). iatdc Very truly yours, (SGD.) EUFRACIO D. SANTOS Commissioner