Publishing the Amendments Effected by Presidential Decree No. 1457 on Title VI (Documentary Stamp Taxes) of the National Internal Revenue Code of 1977, as Amended

August 15, 1978 REVENUE MEMORANDUM CIRCULAR NO. 057-78 SUBJECT : Publishing the Amendments Effected by Presidential Decree No. 1 457 on Title VI (Documentary Stamp Taxes) of the National Internal Revenue Co de of 1977, as Amended TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published below the amendments introduced in Title VI (Documentary Stamp Taxes) by Presidential Decree No. 1457, viz.: "SEC. 29. Sections 222 to 246, except 226, of Title VI of the National Internal Revenue Code are hereby amended to read as follows: "SEC. 223. Stamp tax on bonds , debentures , and certificates of indebtedness . On all bonds, debentures, and certificates of indebtedness issued by any association, company or corporation, there shall be collected a documentary stamp tax of sixty-five centavos on each two hundred pesos, or fractional part thereof, of the face value of such documents." "SEC. 224. Stamp tax on original issue of certificates of stock . On every original issue, whether on organization, reorganization or for any lawful purpose, of certificates of stock by any association, company, or corporation, there shall be collected a documentary stamp tax of one peso and ten centavos on each two hundred pesos, or fractional part thereof, of the par value of such certificates: Provided , That in the case of the original issue of stock without par value the amount of the documentary stamp tax herein prescribed shall be based upon the actual consideration received by the association, company, or corporation for the issuance of such stock, and in the case of stock dividends on the actual value represented by each share." "SEC. 225. Stamp tax on sales agreements to sell , memoranda of sales , deliveries or transfer of bonds , due-bills , certificates of obligation , or shares or certificates of stock . On all sales, or agreements to sell, or memoranda of sales, or deliveries, or transfer of bonds, due-bills, certificates of obligation, or shares of certificates of stock, in any association, company or corporation, or transfer of such securities by assignment in bank, or by delivery, or by any paper or agreement, or memorandum or other evidences of transfer or sale whether entitling the holder in any manner to the benefit of such bonds, due-bills, certificates of obligation or stock, or to secure the future payment of money, or for the future transfer of any bond, due-bill, certificates of obligation or stock, there shall be collected a documentary stamp tax of twenty-five centavos on each two hundred pesos, or fractional part thereof, of the par value of such bond, due-bill, certificates of obligation or stock: Provided , That only one tax shall be collected on each sale or transfer of stock or securities from one person to another, regardless of whether or not a certificate of stock or obligation is issued, indorsed, or delivered in pursuance of such sale or transfer: And provided , further , That in the case of stock without par value the amount of the documentary stamp tax herein prescribed shall be equivalent to twenty-five per centum of the documentary stamp tax paid upon the original issue of said stock." "SEC. 227. Stamp tax on certificates of profits or interest in property or accumulations . On all certificates of profits, or any certificate or memorandum showing interest in the property or accumulations of any association, company, or corporation, and on all transfers of such certificates or memoranda, there shall be collected a documentary stamp tax of ten centavos on each two hundred pesos, or fractional part thereof, of the face value of such certificate or memorandum." "SEC. 228. Stamp tax on bank checks , drafts , certificates of deposit not bearing interest and other instrument . On each bank check, draft, or certificate of deposit not drawing interest, or order for the payment of any sum of money drawn upon or issued by any bank, trust company, or any person or persons, companies or corporation, at sight or on demand, there shall be collected a documentary stamp tax of fifteen centavos." "SEC. 229. Stamp tax on negotiable promissory notes , bills of exchange , drafts , certificates of deposit bearing interest and others not payable on sight or demand . On all bills of exchange (between points within the Philippines), drafts, or certificates of deposits drawing interest, or orders for the payment of any sum of money otherwise than at sight or on demand, or on all negotiable promissory notes, except bank notes issued for circulation, and on each renewal of any such note, there shall be collected a documentary stamp tax of ten centavos on each two hundred pesos, or fractional part thereof, of the face value of any such bill of exchange, draft, certificate of deposit, or note." "SEC. 230. Stamp tax upon acceptance of bills of exchange and others . Upon any acceptance or payment of any bill of exchange or order for the payment of money purporting to be drawn in a foreign country but payable in the Philippines, there shall be collected a documentary stamp tax of fifteen centavos on each two hundred pesos, or fractional part thereof, of the face value of any such bill of exchange, or order, or the Philippine equivalent of such value, if expressed in foreign currency." "SEC. 231. Stamp tax on foreign bills of exchange and letters of credit . On all foreign bills of exchange and letters of credit (including orders, by telegraph or otherwise, for the payment of money issued by express or steamship companies or by any person or persons) drawn in but payable out of the Philippines in a set of three or more according to the custom of merchants and bankers, there shall be collected a documentary stamp tax of twenty centavos on each two hundred pesos, or fractional part thereof, of the face value of any such bill of exchange or letter of credit, or the Philippine equivalent of such face value, if expressed in foreign currency." "SEC. 232. Stamp tax on life insurance policies . On all policies of insurance or other instruments by whatever name the same may be called, whereby any insurance shall be made or renewed upon any life or lives, there shall be collected a documentary stamp tax of thirty-five centavos on each two hundred pesos or fractional part thereof, of the amount issued by any such policy." "SEC. 233. Stamp tax on policies of insurance upon property . On all policies of insurance or other instruments by whatever name the same may be called, by which insurance shall be made or renewed upon property of any description, including rents or profits, against peril by sea or on inland waters, or by fire or lightning, there shall be collected a documentary stamp tax of fifteen centavos on each four pesos, or fractional part thereof, of the amount of premium charged: Provided , however , That no documentary stamp tax shall be collected on reinsurance contracts or on any instrument by which cession or acceptance of insurance risks under any reinsurance agreement is effected or recorded." "SEC. 234. Stamp tax on fidelity bonds and other insurance policies . On all policies of insurance or bonds or obligations of the nature of indemnity for loss, damage, or liability made or renewed by any person, association, company or corporation transacting the business of accident, fidelity, employer's liability, plate, glass, steam boiler, burglar, elevator, automatic sprinkler, or other branch of insurance (except life, marine, inland, and fire insurance), and all bonds undertakings, or recognizances, conditioned for the performance of the duties of any officer or position, for the doing or not doing of anything therein specified, and on all obligations guaranteeing the validity or legality of any bonds or other obligations issued by any province, city, municipality, or other public body or organization, and on all obligations guaranteeing the title to any real estate, or guaranteeing any mercantile credits which may be made or renewed by any such person, company or corporation, there shall be collected a documentary stamp tax of fifteen centavos on each four pesos, or fractional part thereof, of the premium charged." "SEC. 235. Stamp tax on policies of annuities . On all policies of annuities, or other instrument by whatever name the same may be called, whereby an annuity may be made, transferred, or redeemed, there shall be collected a documentary stamp tax of sixty-five centavos on each two hundred pesos, or fractional part thereof, of the capital of the annuity, or should this be unknown, then on each two hundred pesos, or fractional part thereof, of thirty-three and one-third times the annual income." "SEC. 236. Stamp tax on indemnity bonds . On all bonds for indemnifying any person, firm, or corporation who shall become bound or engaged as surety for the payment of any sum of money or for the due execution or performance of the duties of any office or position or to account for money received by virtue thereof, and on all other bonds of any description, except such as may be required in legal proceedings, or are otherwise provided for herein, there shall be collected a documentary stamp tax of two pesos and twenty-five centavos." "SEC. 237. Stamp tax on certificates . On each certificate of damage or otherwise, and on every other certificate or document issued by any customs officer, marine surveyor, or other person acting as such, and on each certificate issued by a notary public, and on each certificate of any description required by law or by rules or regulations of a public office, or which is issued for the purpose of giving information, or establishing proof of a fact, and not otherwise specified herein, there shall be collected a documentary stamp tax of one peso and fifty centavos: Provided , That in the case of tax clearance certificates, there shall be collected a documentary stamp tax of seventy pesos on each certificate for a first class passenger; forty-five pesos for a second or tourist class passenger; and fifteen pesos for a third class or steerage passenger." "SEC. 238. Stamp tax on warehouse receipts . (a) On each warehouse receipt for property held in storage in a public or private warehouse or yard for any other person than the proprietor of such warehouse or yard himself, there shall be collected a documentary stamp tax of ninety centavos: Provided , That no tax shall be collected on each warehouse receipt issue to any one person in any one calendar month covering property the value of which does not exceed two hundred pesos. "(b) On each hotel receipt issued by keepers of hotels, motels, resthouse, lodging houses or resorts to a guest for lodging, there shall be collected a documentary stamp tax of two pesos: Provided , however , That if the amount of the receipt exceeds twenty pesos, an additional tax of two pesos on each twenty pesos or fractional part thereof shall be collected." "SEC. 239. Stamp tax on Jai-Alai or horse race tickets . On each Jai-Alai or horse race ticket, there shall be collected a documentary stamp tax of ten centavos: Provided , That if the cost of the tickets exceeds one peso, an additional tax of ten centavos on every one peso or fractional part thereof shall be collected." "SEC. 240. Stamp tax on bills of lading or receipts . On each set of bills of lading or receipts (except charter party), for any goods, merchandise, or effects shipped from one port or place in the Philippines to another port or place in the Philippines (except on ferries across rivers), or to any foreign port, there shall be collected a documentary stamp tax of fifteen centavos, if the value of such goods exceeds five pesos and does not exceed two hundred pesos; thirty-five centavos, if the value exceeds two hundred pesos and does not exceed one thousand pesos; seventy centavos, if the value exceeds one thousand pesos and does not exceed five thousand pesos; two pesos, if the value exceeds five thousand pesos and does not exceed ten thousand pesos; and three pesos and seventy-five centavos, if the value exceeds ten thousand pesos: Provided , however , That freight tickets covering goods, merchandise, or effects carried as accompanied baggage of passengers on land and water carriers primarily engaged in the transportation of passengers are hereby exempt." "SEC. 241. Stamp tax on proxies . On each proxy for voting at any election for officers of any company or association, or for any other purpose, except proxies issued affecting the affairs of associations or corporations organized for religious, charitable, or literary purposes, there shall be collected a documentary stamp tax of one peso and fifty centavos." "SEC. 242. Stamp tax on powers of attorney . On each power of attorney to perform any act whatsoever, except acts connected with the collection of claims due from or accruing to the Government of the Republic of the Philippines, or the government of any province, city or municipality, there shall be collected a documentary stamp tax of one peso: Provided , however , That on each power of attorney which authorizes another to administer, sell, lease, or otherwise dispose of the property of a principal, there shall be collected a documentary stamp tax of two pesos." "SEC. 243. Stamp tax on leases and other hiring agreements . On each lease, agreement, memorandum, or contract for hire, use or rent of any lands or tenements, or portions thereof, there shall be collected a documentary stamp tax at the following rates: "(a) If executed for not more than one year, two pesos. "(b) If executed for more than one year and not more than three years, four pesos and fifty centavos. "(c) If executed for more than three years, nine pesos." "SEC. 244. Stamp tax on mortgages , pledges , deeds of trust . On every mortgage or pledge of lands, estate or property, real or personal, heritable or movable, whatsoever, where the same shall be made as a security for the payment of any definite and certain sum of money lent at the time or previously due and owing or forborne to be paid being payable, and on any conveyance of land, estate, or property whatsoever, in trust or to be sold, or otherwise converted into money which shall be and intended only as security, either by express stipulation or otherwise, there shall be collected a documentary stamp tax at the following rates: "(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, three pesos and fifty centavos. "(b) On each three thousand pesos, or fractional part thereof in excess of three thousand pesos, an additional tax of three pesos and fifty centavos. "On any mortgage, pledge, or deed of trust, where the same shall be made as a security for the payment of a fluctuating account or future advances without fixed limit, the documentary stamp tax on such mortgage, pledge or deed of trust shall be computed on the amount actually loaned or given at the time of the execution of the mortgage, pledge, or deed of trust. However, if subsequent advances are made on such mortgage, pledge or deed of trust, additional documentary stamp tax shall be paid which shall be computed on the basis of the amount advanced or loaned at the rates specified above: Provided , however , That if the full amount of the loan or credit, granted under the mortgage, pledge or deed of trust, the documentary stamp tax prescribed in this section shall be paid and computed on the full amount of the loan or credit granted." "SEC. 245. Stamp tax on deeds of sale and conveyance of real property . On all conveyance, deeds, instruments, or writings, other than grants, patents, or original certificates of adjudication issued by the Government, whereby any lands, tenements or other realty sold shall be granted, assigned, transferred or otherwise conveyed to the purchaser or purchasers, or to any other person or persons designated by such purchaser or purchasers, there shall be collected a documentary stamp tax at the following rates: "(a) When the consideration, or value received or contracted to be paid for such realty, after making proper allowance of any encumbrance, exceeds two hundred pesos and does not exceed one thousand pesos, two pesos. "(b) For each additional one thousand pesos, or fractional part thereof in excess of one thousand pesos of such consideration or value, eight pesos. "When it appears that the amount of the documentary stamp tax payable hereunder has been reduced by an incorrect statement, of the consideration in any conveyance, deed, instrument, or writing subject to such tax, the Commissioner, provincial or city treasurer, or other revenue officer shall from the assessment rolls or other reliable source of information, assess the property of its true market value and collect the proper tax thereon." "SEC. 246. Stamp tax on charter parties and similar instruments . On every charter party, contract, or agreement for the charter of any ship, vessel, or steamer, or any letter or memorandum or other writing between the captain, master, or owner, or other person acting as agent of any ship, vessel, or steamer, and any other person or persons for or relating to the charter of any such ship, vessel, or steamer, and on any renewal or transfer of such charter, contract, agreement, letter or memorandum, there shall be collected a documentary stamp tax at the following rates: "(a) If the registered gross tonnage of the ship, vessel or steamer does not exceed three hundred tons, and the duration of the charter or contract does not exceed six months, sixty pesos; and for each month or fraction of a month in excess of six months, an additional tax of nine pesos shall be paid. "(b) If the registered gross tonnage exceeds three hundred tons and does not exceed six hundred tons, and the duration of the charter or contract does not exceed six months, one hundred forty pesos; and for each month or fraction of a month in excess of six months, an additional tax of eighteen pesos shall be paid. "(c) If the registered gross tonnage exceeds six hundred tons and the duration of the charter or contract does not exceed six months, two hundred pesos; and for each month or fraction of a month in excess of six months, an additional tax of thirty-six pesos." Features of the Amendment 1. The rates of documentary stamp taxes required to be affixed on documents were increased as shown below: DOCUMENTARY STAMP TAX COMPARATIVE RATES NIRC - 1977 P.D. 1457 Documents Taxable Section Rate Section Rate 1. Bonds, debentures, and certificate of indebtedness 223 P0.30/P200.00 29 P0.65/P200.00 2. Original issue of Certificate of Stock 224 P0.50/P200,00 29 P1.10/P200.00 3. Sales, Agreements to sell, memoranda of sales, deliveries or transfer of bonds, due bills, certificate of obligation, or shares or certificate of stock 225 P0.10/P200.00 29 P0.25/P200.00 4. Certificates of profits or interest in property or accumulations 227 P0.04/P200.00 29 P0.10/P200.00 5. Bank checks, drafts, certificate of deposit not bearing interest and other instruments 228 P0.04 29 P0.15 6. Negotiable promissory notes, bills of exchange, drafts, certificate of deposit bearing interest and others not payable on sight or demand 229 P0.04/P200.00 20 P0.10/P200.00 7. Acceptance of bills of exchange and others 230 P0.06/P200.00 29 P0.15/P200.00 8. Foreign bills of exchange and Letters of Credits 231 P0.08/P200.00 29 P0.20/P200.00 9. Life Insurance Policies 232 P0.16/P200.00 29 P0.35/P200.00 10. Policies of Insurance upon property 233 P0.06/P4.00 29 P0.15/P4.00 11. Fidelity Bonds and other insurance policies 234 P0.06/P4.00 29 P0.15/P4.00 12. Policies of Annuities 235 P0.30/P200.00 29 P0.65/P200.00 13. Indemnity Bonds 236 P0.75 29 P2.25 14. Certificates 237 P0.30 29 P1.50 a. Clearance Cert. 1st class 15.00 70.00 b. -do- 2nd class 8.00 45.00 c. -do- 3rd class 2.00 15.00 15. Warehouse receipts 238-a P0.30 29 P0.90 Hotel receipts 238-b P1.00 for every 29 P2.00 P20.00 16. Jai-Alai or race tickets 239 P0.05 29 P0.10 P0.05/P1.00 if P0.10/P1.00 ticket exceeds additional in P1.00 excess of P1.00 17. Bills of Lading or receipts 240 P0.06 = over P5 to 200 29 P0.15 = over P5 to P0.15 = over P200 to P1,000 P200 P0.30 = over P1,000 to P0.35 = over P200 to P5,000 P1,000 P0.75 = over P5,000 to P0.70 = over P1,000 P10,000 to P5,000 P1.50 = over P10,000 P2.00 = over P5,000 P3.75 = over P10,000 to P10,000 18. Proxies 241 P0.50 29 P1.50 19. Powers of Attorneys 242 P0.30 29 P1.00 (Power to sell, dispose or administer property of principal) 0.60 2.00 20. Leases and other 243 P0.60 = executed for not 29 P2.00 = not more hiring agreement more than 1 year than 1 year 1.50 = more than 1 year 4.50 = more than 1 and not more than year and less than 3 years 3 years 3.00 = more than 3 years 9.00 = more than 3 years 21. Mortgages, Pledges 244 P1.50 = over P1,000 but 29 P3.50 = more than and Deeds of Trust does not exceed P3,000 P1,000 but does 1.50/P3,000 additional not exceed P3,000 in excess of P3,000 3,50/P3,000 in excess of P3,000 22. Deeds of sale and 245 P0.75 = over P200 but does 29 P2.00 = over P200 conveyances of not exceed P1.000 but does not real property 3.00/P1,000 additional exceed P1,000 in excess of P1,000 8.00/P1,000 additional in excess of P1,000 23. Charter parties and 246 a. P18.00 = gross tonnage 29 a. P60.00 = gross similar instruments of ship does not tonnage does exceed 300 tons not exceed 300 and contract not to tons, duration of exceed 6 months contract does not exceed 6 months 9.00/month, additional in excess of 6 months b. P36.00 = gross tonnage b. P140.00 = gross exceeds 300 tons but tonnage exceeds does not exceed 600 300 tons but tons, contract does does not exceed not exceed 6 months 600 tons, dura- 6.00/month in excess of tion of contract 6 months does not exceed 6 months. 18.00/month, additional in excess of 6 months c. P72.00 = gross tonnage c. P200.00 = gross exceeds 600 tons tonnage exceeds and duration of 600 tons, dura- charter does not tion of contract exceed 6 months does not exceed 12.00/month, 6 months additional in excess 36.00/month, of 6 months additional in excess of 6 months Note: Under PD 1457, the Science Stamps provided for under Section 4 of RA 5448 has been repealed. 2. In the tabulation above, the first column is the rate of tax as provided for in the National Internal Revenue Code of 1977. The document is subject further to an additional payment of the Science Stamp Tax in an amount equal to that shown in the said column. In the second column showing the rate of tax under P.D. 1457, the amount shown therein is already net and does not require the additional payment of the Science Stamp Tax. 3. Section 4 of Republic Act No. 5448 which made it mandatory to collect an additional science stamp tax equal to or corresponding to the amount collected as documentary stamp tax provided for under Section 223 to 247 of the Tax Code was repealed by Presidential Decree No. 1457. Science stamp taxes should, therefore, not be collected anymore after the promulgation of Presidential Decree No. 1457. All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this Circular as wide a publicity as possible. aisa dc EFREN I. PLANA Acting Commissioner