Agreements to Finance the Purchase of a Car and Mortgage of the Car Purchased to Guarantee Payment of the Amount Loaned

October 28, 1959 BIR RULING NO. 560-59 3rd Indorsement Respectfully returned to the Honorable, the Secretary of Finance, with the information that agreements to finance the purchase of a car is not subject to documentary stamp tax. The mortgage of the car purchased to guarantee payment of the amount loaned is however subject to documentary stamp tax at the following rates: cdll "SEC. 232. Stamp tax on mortgages, pledges, and deeds of trust . . . . "(a) When the amount for which the mortgage or deed of trust is given exceeds one thousand pesos and does not exceed three thousand pesos, one peso and fifty centavos. "(b) On each three thousand pesos or fractional part thereof in excess of three thousand pesos, an additional tax of one peso and fifty centavos." Section 238 of the National Internal Revenue Code provides as follows: "SEC. 238. Effect of failure to stamp taxable document . An instrument, document, or paper which is required by law to be stamped and which has been signed, issued, accepted, or transferred without being duly stamped, shall not be recorded, nor shall it or any copy thereof or any record of transfer of the same be admitted or used in evidence in any court until the requisite stamp or stamps shall have been affixed thereto and cancelled. "No notary public or other officer authorized to administer oaths shall add his jurat or acknowledgment to any document subject to documentary stamp tax unless the proper documentary stamps are affixed thereto and cancelled." cdt (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue