Reduction and Condonation of Real Property Taxes and Interest/Penalties Assessed on Power Generation Facilities of IPPs under BOT Contracts with GOCCs

December 6, 1974 Far East Bank & Trust Company Muralla, Intramuros, Manila Gentlemen : This refers to your letter dated November 8, 1974 requesting this Office to allow you to deviate from the present and existing procedure of affixing documentary and science stamps at the back of individual checks issued to current account depositors to a new revised procedure described below as follows: cdt "1. Affixing of Stamps on 'documentary/Science Stamps on Checks' (DSSC) Forms (facsimiles attached ) These forms shall be printed by National Printing Company and shall respectively serve as the first page of a commercial or personal checkbook as the case may be. Pre-affixing of the required amount of stamps for each checkbook shall be made on the DSSC form (shaded portion), thus reducing the number of sheets where stamps are affixed to only one sheet for every checkbook. At the back of individual checks, National Printing Company shall print the phrase 'REQUIRED DOC./SCIENCE STAMPS AFFIXED ON SEPARATE FORM ON FILE'. "2. Issuance of Checkbook The serial numbers composed in each checkbook shall be indicated on the DSSC form. Upon issuance of the checkbook, the latter form shall be detached and then stapled to the corresponding REQUISITION FOR NEW CHECKBOOK (FEBTC No. I-CA-4, sample copy attached) for filing." In reply thereto, I regret to inform you that because of the provision of the Documentary Stamp Tax Law, your request has to be denied. This Office has consistently ruled that the documentary and science stamps shall be affixed to the documents or instruments taxed or to such other paper as may be indicated by law or regulations as the proper recipient of the stamps, upon such time such act is done or transaction had or in short upon the issuance of the blank checks. In the instant case, the documents or instruments being taxed are the individual checks. The "(DSSC) Forms in question on file" using your revised procedure is not being taxed since it is not subject to documentary stamp tax. Furthermore, there is no law or regulation which indicated that "(DSSC) Forms on file" may properly be the recipient of the stamps tax instead of the taxable documents. It has been held that the liability of an instrument to stamp tax and the amount of tax due thereon are determined by the form and face of the instrument itself and cannot be affected by proof of facts outside of the instrument. (U.S. v. Ishan 17 Wall. 496, 84 U.S. 496) Such being the case, the present procedure of affixing the documentary and science stamps on each blank check issued by your bank shall be followed. casia Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5