BIR Ruling No. 397-12

June 13, 2012 BIR RULING NO. 397-12 RA No. 9243; SEC. 199 of the Tax Code, as amended; BIR Ruling No. 011-05 Agbayani & Mendoza Attorneys-at-Law Unit 305 Times Square Bldg. Examiner cor. Times Sts. West Triangle, Quezon City Attention: Atty. Maria Elisa Dr. Mendoza Gentlemen : This refers to your letter dated June 21, 2011, requesting in behalf of the Bangko Sentral ng Pilipinas, for a ruling that the deed of assignment is exempt from Documentary Stamp Tax pursuant to Republic Act (R.A.) No. 9243. It appears from the record that Industrial Savings and Loans Association (ISLA) has been closed and liquidated by court order; that through Philippine Deposit Insurance Corporation, it executed a Deed of Assignment in favor of the Bangko Sentral ng Pilipinas over a parcel of land covered by Transfer Certificate of Title (TCT) No. 108846. In reply, please be informed that pursuant to Section 9 of RA No. 9243, pertinent portions of which state that: SEC. 9. Section 199 of the National Internal Revenue Code of 1997, as amended is hereby further amended to read as follows: SEC. 199. Documents and Papers Not Subject to Stamp Tax. The provisions of Section 173 to the contrary notwithstanding, the following instruments, documents and papers shall be exempt from the documentary stamp tax: xxx xxx xxx (l) All contracts, deeds, documents and transactions related to the conduct of business of the Bangko Sentral ng Pilipinas. xxx xxx xxx Corollary thereto, Revenue Regulations No. 13-04 dated December 23, 2004, implementing the Provisions of Republic Act No. 9243, An Act Rationalizing the Provisions on the Documentary Stamp Tax of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes, provides what documents and papers are not subject to Stamp Tax as follows: SEC. 9. Documents and Papers not Subject to DST. "SEC. 199. Documents and Papers Not Subject to Stamp Tax . The provisions of Section 173 to the contrary notwithstanding, the following instruments, documents and papers shall be exempt from the DST: xxx xxx xxx (l) All contracts, deeds, documents and transactions related to the conduct of business of the Bangko Sentral ng Pilipinas. xxx xxx xxx Section 173 of Tax Code of 1997, as amended, which provides that whenever one party to the taxable document enjoys exemption from the tax herein imposed, the other party thereto who is not exempt shall be the one directly liable for the tax. However, it is clear from the provision of R.A. 9243 as implemented by Revenue Regulations No. 13-04, the provisions of Section 173 to the contrary notwithstanding, that all contracts, deeds, documents and transactions entered into by the BSP which are related to the conduct of its business are exempt from the payment of DST. (BIR Ruling No. 011-05 dated August 10, 2005) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue