Prescribing the Policies, Guidelines and Procedures in the Use of On-line Electronic Documentary Stamp Tax (DST) Metering Machine Pursuant to Revenue Regulations No. 9-2000 dated August 31, 2000

June 16, 2001 REVENUE MEMORANDUM ORDER NO. 15-01 SUBJECT : Prescribing the Policies, Guidelines and Procedures in the Use of On-line Electronic Documentary Stamp Tax (DST) Metering Machine Pursuant to Revenue RegulationsNo.9-2000 dated August 31, 2000 TO : All Internal Revenue Officers and Others Concerned I. OBJECTIVES A. To monitor Documentary Stamp Tax (DST) collections through the use of On-line Electronic DST Imprinting Machines; B. To prescribe the policies and guidelines in the implementation of the use of On-line Electronic DST Imprinting Machine. II. POLICIES A. The Bureau of Internal Revenue (BIR) shall identify and notify the DST Taxpayers/Users who are required under Revenue Regulations No. 9-2000 dated August 31, 2000 to use the Documentary Stamp Electronic Imprinting Machine with Encryption (DS-EIM); B. The BIR shall purchase and distribute, free of charge, the DS-EIM to the Taxpayer/User. However, the Taxpayer/User shall have the option to purchase directly their own DS-EIM; C. The Taxpayer/User shall shoulder the costs to install and operate the BIR owned DS-EIM in the premises (telephone lines, cable, incidental expenses) and the cost of maintaining the same; D. BIR retains the ownership of the DS-EIM purchased and distributed to the Taxpayers/Users; E. The Supplier shall install the DS-EIM in the Taxpayers/Users' premises whether the same is owned by the BIR or by the Taxpayers/Users. In case of malfunctions/repairs, the Supplier shall make the necessary repair within twenty-four (24) hours upon notification by the BIR through the Collection Programs Division (CPD) or by the Taxpayers/Users, if repairs shall be performed by local technician. If the nature of the malfunction requires US Main Data Intervention, repair shall be made within seventy two (72) hours upon notification by CPD; F. In case of loss or damage of the BIR-owned DS-EIM, the Taxpayer/User shall be liable for the original cost of the machine. The loss shall be reported to the BIR through CPD within twenty-four (24) hours from discovery of such loss; G. The Information Systems Group (ISG) shall assist in the technical testing and acceptance of the hardware component (electronic meters and servers) of the project as well as represent the BIR in the installation activities of the supplier/contractor and ensure the physical security of the DST Data Center. It shall also work with the contractor in developing report programs that will efficiently and effectively monitor DST collections; H. The Large Taxpayers (LTs) such as commercial and universal banks shall pay/remit the DST payment through the Direct Tax Debit System pursuant to the pertinent provisions of RMO No. 4-99 dated October 27, 1998; I. Schedule 1, Details of Documentary Stamp Tax for Replenishment, of BIR Form 2000 (Documentary Stamp Tax Declaration/Return) shall be accomplished/attached to the Tax Return when paying DST while the use of BIR Form No. 2002 (Information Return for Documentary Stamp Taxes Paid) shall be discontinued. However, in the initial payment of DST through DS-EIM, Schedule 1 of the Tax Return need not be accomplished; J. Request to purchase documentary stamps of Large Taxpayers' branches shall be coursed through its Head Offices. Payment of DST shall be made per machine to be supported by the corresponding BIR Form 2000. In short, one BIR Form 2000 should be accomplished for replenishing DST in every machine; K. Purchases/replenishment of documentary stamps shall be allowed up to the amount of DST consumption indicated in Schedule 1 of the corresponding BIR Form 2000; L. Insurance companies shall pay/remit DST pursuant to the pertinent provisions of RMO No. 66-98 dated August 20, 1998. Stock Brokers shall pay/remit DST under existing procedures; M. Any intention of the Taxpayer/User to retire or transfer the DS-EIM shall be communicated to the BIR; N. A Memorandum Receipt (MR) shall be issued by the BIR to the Taxpayer/User who shall acknowledge receipt of the BIR-Owned DS-EIM upon installation of the machine. III. COVERAGE Unless expressly exempted by the Commissioner on meritorious grounds, the following classes of taxpayers shall use the On-line Electronic DST Imprinting Machine in payment and remittances of DST: A. A bank, a quasi bank or a non-bank financial intermediary, a finance company, or an insurance, a surety, a fidelity, or annuity company; B. The Philippine Stock Exchange (PSE), in the case of shares of stock and other securities traded in the local stock exchange; C. Shipping and airline companies; D. A pre-need company on sale of pre-need plans as provided under Section 186 of the Tax Code; and E. Such other industries as may be required by the Commissioner to use the On-line Electronic DST Imprinting Machine. IV. DEFINITION OF TERMS A. On-line Electronic DST Imprinting Machine refers to a device capable of imprinting the value of the stamp tax and other data on the taxable document, with remote loading and resetting feature, and/or with built-in modem which enables users to load/purchase the stamp tax value through an on-line set up or electronic data transmission with the BIR, thereby enabling the latter to monitor actual usage or stamp consumption of the users; B. DS-EIM refers to Documentary Stamps Electronic Imprinting Machine; C. BIR-Owned DS-EIM refers to the Documentary Stamps Electronic Imprinting Machine purchased, owned and distributed by the BIR for use of the Taxpayers/User; D. Taxpayer/User-Owned DS-EIM refers to the Documentary Stamps Electronic Imprinting Machine directly purchased and owned by the Taxpayer/User; E. Supplier refers to the person from whom the DS-EIMs are directly acquired by the BIR. V. PROCEDURES A. ON ACCEPTANCE AND TESTING OF HARDWARE COMPONENTS (ELECTRONIC METERS AND SERVERS) 1. The Procurement Division shall 1.1 Facilitate the testing and acceptance and deployment of the hardware component of the project. HAEDCT 2. The ISG shall 2.1 Provide technical assistance in validating technical requirements/specifications; 2.2 Assist in testing and acceptance of servers and electronic meters. B. REGISTRATION AND INSTALLATION OF MACHINE 1. The Taxpayer/User shall 1.1 For BIR-Owned DS-EIM, apply for permit to use DS-EIM by completing and signing the Application for Permit to Use On-Line Electronic Documentary Stamp Imprinting Machine (Annex "A") and the Memorandum of Agreement (MOA) (Annex "B") and return these documents, fully accomplished and signed, to the CPD. For Taxpayer/User-Owned DS-EIM, accomplish the Application Form and file with CPD through the Supplier; 1.2 Prepare the place where the Supplier will install the machine. The Cost of materials, telephone lines, cables and other incidental expenses shall be shouldered by the Taxpayer/User; 1.3 Receive original copy of Permit to Use On-line DS-EIM (Annex "C") from CPD; 1.4 Maintain and take care of the BIR-Owned DS-EIM as if it/he is the actual owner thereof and shoulder the cost of maintenance. Report any damage and/or malfunction to the BIR, through CPD, immediately; 1.5 Make available the DS-EIM and pertinent records thereof, whether BIR-Owned or Taxpayer/User-Owned, for inspection/audit of the BIR and Commission of Audit (COA) personnel. 2. The Supplier shall 2.1 Install and activate the machine in the Taxpayer/User premises upon receipt of the advise from CPD or upon presentation of the Permit to Use On-line DS-EIM by the BIR or Taxpayer/User; 2.2 Submit to CPD a DS-EIM Installation Report within twenty-four (24) hours; 2.3 Respond to notification of machines' malfunctions within twenty-four (24) hours and submit Supplier's Service Report to the BIR through CPD; 2.4 Shoulder the transportation and incidental expenses of installation of the machine in the Taxpayer/User premises; 2.5 Coordinate and inform the concerned Revenue Data Centers (RDCs) of the schedule of installation of electronic metering machine. 3. The RDCs shall 3.1 Ensure that a BIR counterpart is present in all the installation activities to be conducted by the Supplier; 3.2 Sign and validate the installation reports prepared by the supplier/contractor prior to its submission to concerned BIR Offices. 4. The CPD shall 4.1 Identify and notify Taxpayers/Users; 4.2 Send Application for Permit to Use DS-EIM and MOA to Taxpayers/Users; 4.3 Process the Application for Permit to Use DS-EIM and MOA returned by the Taxpayers/Users; 4.4 Distribute copies of Permit to Use DS-EIM as follows: Original Taxpayer's copy Duplicate CPD's copy Triplicate COA Resident Auditor's copy Quadruplicate Concerned RDO's copy 4.5 Release signed MOA to Taxpayers/Users and maintain copy for file; 4.6 Prepare communication to Supplier to install the machine in accordance with the Permit, copy furnished the Collection Division of the Region and the concerned Revenue District Office (RDO); 4.7 Maintain record of permit issued and generate Monthly Report of DS-EIM Permits Processed and Issued (Annex "D"); 4.8 Submit to the Assistant Commissioner (ACIR), Collection Service the Monthly Report of DS-EIM Installed (Annex "E"), copy furnished the Deputy Commissioner (DCIR) for Operations,; 4.9 Conduct periodic verification of Taxpayer/User DS-EIM and pertinent documents relative to the operations of the machine in coordination with the RDO and Collection Division of the Region. 5. The CPD-DST Metering Machine Section shall 5.1 Verify on-line the serial number of the machine; 5.2 Encode the information in the Permit (account number, name and address of the Taxpayer/User, Permit Number, RDO Code, etc.); 5.3 Generate the Monthly Report of DS-EIM Installed (Annex "E"). 6. The Assistant Commissioner, Collection Service shall 6.1 Approve Permit to Use DS-EIM; DISHEA 6.2 Review and initial MOA and forward the same to the DCIR-Operations for review and initial. 7. The Commissioner of Internal Revenue shall 7.1 Sign the MOA. C. LOADING AND RELOADING 1. The Taxpayer/User shall 1.1 Accomplish Documentary Stamp Tax Declaration Form (BIR Form 2000) and pay DST to the Authorized Agent Banks (AABs) for regular taxpayers; through the Electronic Fund Transfer Instruction System (EFTIS), except for DST on Capital Gains Tax, for Large Taxpayers; to the Land Bank of the Philippines (LBP) -United Nations Branch for Insurance Companies; and to Rizal Banking Corporation (RCBC) Tektite and Ayala Tower Branches and Equitable PCI Bank Tektite and Ayala Branches for Philippine Stock Exchange; 1.2 Head Offices of Large Taxpayers shall submit BIR Form 2000 duly acknowledged by the Large Taxpayers Quality Assurance Division (LT-QAD), bank validated/officially receipted BIR Form 2000 to the CPD-DST Data Center (CPD-DSTDC) within twenty four (24) hours for on-line processing and remote loading and reloading; 1.3 Non-large taxpayers shall fax a copy of the bank validated/officially receipted BIR Form 2000 to the CPD-DST Data Center (CPD-DSTDC) within twenty four (24) hours for on-line processing and remote loading and reloading; 1.4 Load/reload on-line, daily, the amount of documentary stamps purchased subject to the minimum loading values of P20,000.00 and maximum loading value of P1 Million per loading/reloading a day. However, a maximum loading of P1 Million for three (3) times within a day can be done through a Special Request to the DST Data Center. Other loading/reloading values are in the amount of P50,000.00, P100,000.00, P200,000.00 and P500,000.00; 1.5 Imprint amount of documentary stamps on the documents or other equivalent instruments subject to DST pursuant to Sections 174 to 198 of the National Internal Revenue Code of 1997. 2. The CPD DST DC (DST Monitoring Section) shall 2.1 Receive the duly bank validated/officially receipted BIR Form 2000 from the Taxpayer/User; 2.2 Verify BIR Form 2000 received from the Taxpayer/User as to validity of payment data and compliance to existing issuance; 2.3 Encode data into the Work Station. D. MONITORING OF DST COLLECTION 1. The CPD-DSTDC (DST Monitoring Section) shall 1.1 Generate on-line the following reports and furnish copy to concerned Officials/Offices as follows: a. Weekly Report of ACIR, Collection Every DST Collection Service Tuesday (Annex "F") b. Monthly Report of CIR, 10th Working DST Collection per DCIR-Operations day after User (Annex "G") ACIR-CS, RAD the End of Month (EOM) c. Monthly Report of CIR 10th Working DST Collection by DCIR-Operations day after Region/RDO ACIR-CS EOM (Annex "H") Concerned RDO d. Monthly Department of 10th Working Report of DST Finance (DOF) days after Collection by Type CIR, DCIR-OG EOM of Transaction ACIR-CS (Annex "I") e. Monthly Report of CIR 5th Working DS Purchased, DCIR-Operations day after Loaded/Reloaded ACIR-CS EOM (Annex "J") 1.2 Maintain the following records/reports on-line and generate hard copies as requested: a. DS-EIM Taxpayer/User Subsidiary Ledger (Annex "K") b. Daily Meter Activity Reports c. Monthly Meter Activity Reports 1.3 Conduct periodic audit of Taxpayer/User of DS-EIM in coordination with the RDO and Collection Division of the Region. acEHSI 2. The Concerned RDO shall 2.1 Conduct verification of DS-EIM and the relative operations in cases of retirement and transfer; 2.2 Submit verification report to CPD. 3. The Collection Division of the Concerned Revenue Region shall 3.1 Monitor collection of DST and DS-EIM of the RDOs under the jurisdiction of the Region. 4. The Revenue Accounting Division shall 4.1 Receive Monthly Report of DST Collection by Region/RDO (Annex "H") and Monthly Report of DST Collection by Type of Transaction (Annex "I") from CPD; 4.2 Reconcile Monthly Report of DST Collection against 12.09 Report. E. TRANSFER AND RETIREMENT 1. The Taxpayer/User shall 1.1 Notify in writing the BIR through CPD of the impending retirement/transfer of the DS-EIM; 1.2 Surrender the machine if the same is BIR-Owned. 2. The CPD shall 2.1 Request the concerned RDO to conduct verification of the DS-EIM and the related documents/operations of the machine; 2.2 Act on the Verification Report (Annex "L") submitted by the concerned RDO. 3. The Concerned RDO shall 3.1 Conduct investigation of the documents/operations of the machine as per request of CPD; 3.2 Submit Verification Report (Annex "L") to CPD. F. SYSTEMS DESIGN AND DEVELOPMENT The Information Systems Development Service (ISDS) shall provide business analyst to work with the contractor and CPD for requirements analysis to ensure that the system to be designed and developed by the contractor conforms to end-users' need to effectively and efficiently monitor DST collection. VI. TRANSITORY PROVISION Pending the implementation of the enhanced System that will effectively and efficiently implement the provisions of this RMO, CPD shall generate reports and maintain the Taxpayers/Users Subsidiary Ledgers required, manually or through the Supplier System. The concerned RDO shall submit the DST Reconciliation Report to CPD and Collection Division of the concerned Revenue Region not later than the 20th day of the following month until the System developed by ISDS is implemented and in place. Whenever there are unused stamps in the conventional Electro-mechanical Documentary Stamp, the amount thereof shall be transferred to the On-Line DS-EIM subject to the required minimum loading capacity of P20,000.00 only after the amount have been verified and confirmed by the Collection Division of the concerned Region and the die had been transferred to the CPD. VII. REPEALING CLAUSE The provisions of Revenue Memorandum Order No. 83-98 dated October 16, 1998 and other existing issuance/orders inconsistent hereto is hereby repealed. VIII. EFFECTIVITY This Order shall take effect immediately. (SGD.) REN G. BAEZ Commissioner of Internal Revenue ANNEX A Annex A - Application for Permit to use On-Line Electronic Documentary Stamp Imprinting Machine ANNEX B MEMORANDUM OF AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This Memorandum of Agreement is executed and entered into by and between: The BUREAU OF INTERNAL REVENUE (BIR), a government agency created and existing under the laws of the Philippines with principal office at the BIR National Office Building, East Triangle, Diliman, Quezon City, Philippines, represented herein by its Commissioner, REN G. BAEZ, herein referred to as "BIR", and The ____________________________________________________________, a _________________________ created under the laws of the _________________, with principal office at _______________________________________, represented herein by its ________________________________________, herein referred to as "TAXPAYER/USER", WITNESSETH WHEREAS, there is a need to ensure that the correct amount of Documentary Stamp Tax on every transaction subject to documentary stamp tax is collected, remitted and accounted for; WHEREAS, there is a need to implement the use of an On-Line Electronic Documentary Stamp Tax Imprinting Machine to monitor collections of documentary stamp tax; WHEREFORE, for and in consideration of the foregoing premises, the parties hereto have mutually agreed, as they hereby agree, as follows, that: The TAXPAYER/USER shall 1. Comply with Revenue RegulationsNo.9-2000 dated August 31, 2000, Revenue Memorandum OrderNos.83-98 and ___-2001 dated October 16, 1998 and June 16, 2001, respectively, relative to the implementation of an On-Line Electronic Documentary Stamp Tax Imprinting Machine and with all issuances and regulations on Documentary Stamp Taxes; 2. Provide telephone line and an appropriate location where the On-Line Electronic Documentary Stamp Imprinting Machine will be installed. The cost of consumables, particularly, the cartridge shall be shouldered by the Taxpayer/User; 3. Provide BIR and the Supplier with the name of the contact person(s) responsible for the On-Line Electronic Documentary Stamp Tax Imprinting Machine; 4. Maintain and take care of the machine as the owner thereof would take care of it; 5. Shoulder the maintenance of the machine; 6. Return the machine to the BIR in good condition when its use is no longer required, i.e. cessation from business, change of business ownership/line of business, etc.; 7. Pay the replacement cost of the machine in case of loss or damage rendering the machine useless for the purpose for which it is intended. The cost of the machine is US$898; 8. Be liable for the cost of repairs, except for inherent defects in hardware which are covered by warranty; 9. Open its pertinent records for verification of BIR and COA; and 10. Use the machine for the purpose it is intended. The BIR shall 1. Distribute the machine, free of charge, for the use of the Taxpayer/User but retain the ownership thereof. However, subsequent acquisition of machines shall be for the account of the Taxpayer/User; 2. Reserve the right to withdraw the machine from the Taxpayer/User for the violation of the provisions of existing issuances and of this MOA; and 3. Conduct field verification of the pertinent records of the Taxpayer/User. This Agreement shall take effect during the duration of the business of the Taxpayer/User unless sooner terminated by either party voluntarily, with thirty (30) days advance notice. In case of violation of any terms and conditions stated herein, by either party, this Agreement shall be automatically terminated with immediate notice to that effect. IN WITNESS WHEREOF, we sign this Agreement this ______ day of ___________________ , 2001. BUREAU OF INTERNAL REVENUE TAXPAYER/USER By: By: ______________________________ __________________ Commissioner Name and Position Signature Over Printed Name A C K N O W L E D G M E N T REPUBLIC OF THE PHILIPPINES) ____________________________) s.s BEFORE ME, this ______ day of _________ 2001, at ______________________________ personally appeared the following: AECIaD COMMUNITY TAX DATE/ NAME CERTIFICATE NO. PLACE ISSUED REN G. BAEZ 00000083 2-28-02/Quezon City Commissioner of Internal Revenue Known to me and to me known to be the same persons who executed the foregoing instrument and acknowledged to me that the same is their free and voluntary act and deed and those of the Agency and Taxpayer/User represented. IN WITNESS WHEREOF, I have hereunto set my hand and seal this ______ day of ___________, 2001. NOTARY PUBLIC Doc. No. _________ Page No. _________ Book No. ________ Series of _______ ANNEX C Annex C - Permit to use On-Line Electronic Documentary Stamp Imprinting Machine ANNEX D Collection Programs Division Annex D - Monthly Report of Documentary Stamps Electronic Imprinting Machine Permit Processed and Issued ANNEX E Annex E - Monthly Report of Documentary Stamps Electronic Imprinting Machines Installed ANNEX F Annex F - Weekly Report of DST Collection ANNEX G Annex G - Monthly Report of DST Collection per User ANNEX H Annex H - Monthly Report of DST Collection by Region/RDO ANNEX I Annex I - Monthly Report of DST Collection by Type of Transaction ANNEX J COLLECTION PROGRAMS DIVISION Annex J - Monthly Report of Documentary Stamps Purchased, Loaded/Reloaded ANNEX K Annex K - DS-EIM User Subsidiary Ledger ANNEX L Annex L - On-Line Documentary Stamp Verification Report