DST on Extra-Judicial Foreclosure Sale

August 23, 1988 BIR RULING NO. 402-88 196 304-88 402-88 Gentlemen : This refers to your letter dated June 9, 1988 requesting in effect a ruling as to whether or not documentary stamp tax on extra-judicial foreclosure sale under Act No. 3135, as amended by Act No. 4118 should be paid upon the registration of the Sheriff's Certificate of Sale. It is represented that while the issue on payment of capital gains tax has been clarified by RMO No. 16-88, the issue as to whether documentary stamp tax should be paid or not upon registration of Certificate of Sale is still not clearly pronounced; that Register of Deeds require payment of minimum documentary stamp tax; and that in your opinion the documentary stamp tax provided in RMO No. 29-86 should not be required upon registration of the Certificate of Sale considering that it is paid simultaneously with the capital gains tax which becomes due only upon consolidation of title in the name of the financial institution concerned. In reply, please be informed that this Office cannot agree with your opinion since the law specifies the time for payment of the documentary stamp tax. Section 173 of the Tax Code, as amended by Executive Order No. 273, provides that the corresponding documentary stamp tax shall be paid at the time the "act is done or transaction had." The implication is that the documentary stamp shall be affixed to the taxable document at the time it is issued or executed. Accordingly, in the case of the Sheriff's Certificate of Sale, the documentary stamp tax due thereon shall be paid on/or before the same is executed by the Sheriff. (BIR Ruling No. 304-88) aisadc Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner