Publishing the Effectivity of the Increased Rate of Tax on Insurance Premiums and Documentary Stamp Tax on Insurance Policies

August 8, 1985 REVENUE MEMORANDUM CIRCULAR NO. 32-85 SUBJECT : Publishing the Effectivity of the Increased Rate of Tax on Insurance Premiums and Documentary Stamp Tax on Insurance Policies TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder is the full text of the letter of the Commissioner of Internal Revenue, dated June 27, 1985 addressed to the Insurance Commissioner prescribing the effectivity of increased rate of the tax on insurance premiums and documentary stamp tax on insurance policies. "27 June 1985 The Insurance Commissioner Insurance Commission United Nations Avenue Metro Manila Madam: Reference is made to your letter dated 7 February 1985, informing this Office that representatives of the Insurance Commission, the National Tax Research Center, the Insurance Industry and this Bureau agreed on the manner of implementing the effectivity of the increased rates of premium tax and documentary stamp tax on life insurance policies. cd i Section 50 of Presidential Decree No. 1959 expressly provides that the said decree "shall take effect on October 15, 1984". It was explained, however, that life insurance policies are issued out of approved insurance plans with premium rates actuarially determined beforehand. In the light of the above explanation as to the nature of life insurance policies, this Office will implement the relevant provisions of Presidential Decree No. 1959 as follows: 1. Effectivity of the increased tax on insurance premium . The increased premium tax rate imposed under Section 263 of the National Internal Revenue Code, as amended by Presidential Decree No. 1959, shall be applied on: 1.1 Premiums received from life insurance policies which are issued under new life insurance plans. "New life insurance plans" means life insurance plans which are approved by the Insurance Commissioner on or after October 15, 1984 and all life insurance plans for which life insurance companies were enjoined to submit revised premium rates under IC Circular Letter dated January 30, 1985, whether or not the premium rates were submitted for revision. 1.2 Premiums received from non-life insurance policies issued on or after October 15, 1984. aisa dc 2. Effectivity of the increased rates of documentary stamp tax . The increased rates of documentary stamp tax imposed under Sections 232 and 233 of the National Internal Revenue Code, as amended by Presidential Decree No. 1959, shall be collected respectively on: 2.1. Life insurance policies issued in the same manner as provided in paragraph 1.1 above. cd 2.2. Non-life insurance policies issued on or after October 15, 1984. Very truly yours, (Sgd.) RUBEN B. ANCHETA Acting Commissioner All internal revenue officials, employees and others concerned are hereby enjoined to give this Circular the widest publicity possible. (Sgd.) RUBEN B. ANCHETA Commissioner of Internal Revenue