DST Imposed on Contracts Involving Infrastructure Works Contracts of Lease

December 15, 1988 BIR RULING NO. 580-88 188; 194 000-00 580-88 Gentlemen : This refers to your letter dated October 20, 1988 requesting information as to the amount of documentary stamp tax due and payable on (1) Contracts involving infrastructure works and (2) Contracts of Lease where in both instances that Office is one of the parties. In reply, please be informed that contracts involving infrastructure works like the Contract for the construction of the remaining works of Mamdurriao Sites and Services Project are not subject to the documentary stamp tax. Only the acknowledgment portion of such contract is subject to the documentary stamp tax of P3.00 under Section 188 of the Tax Code, as amended by Executive Order No. 273. However, the contract of lease involving a portion of a two-storey building shall be subject to a documentary stamp tax of P3.00 for each year of the term of said contract pursuant to Section 194 of the same Code. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner