BUSTAXA

COURSE LEARNING OUTCOMES

At the end of the term, the would-be

Accountants are expected to:

1. Solve taxation problems by applying

the applicable principles, concepts,
formulae, and procedures.

2. Discuss applicable tax principles,

concepts, formulae, procedures, and
remedies including taxation updates and
relevant court rulings.

3. Apply various taxation principles,

concepts, procedures, and remedies in
case analysis and practical decision-
making involving both business and non-
business situations.

4. Integrate concepts, procedures,

BUSINESS TAXATION and remedies learned through application
in the preparation of Tax Returns and
Schedules as required by proper
government agencies.

5. Outline the National Internal

Revenue Code, as amended.

6. Examine the importance of taxation

in nation building as a whole.

7. Promote the Louisian core values in

making sound decisions with taxation
implications.

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 "But in this world, nothing can be said to
be certain, except death and taxes."
— Benjamin Franklin

COURSE INTRODUCTION

This course covers the study of the National Internal Revenue Code of the Philippines and
other pertinent laws regarding the taxation system in the Philippines. The course deals with
the study of business taxation laws, transfer tax laws, and local taxes. It also covers updates
and amendments to the Code by the enactment of the Tax Reform for Acceleration and
Inclusion (TRAIN) Law or Republic Act No 10963 which took effect on January 1, 2018. TRAIN
overhauls the outdated National Internal Revenue Code (NIRC) which was adopted 20
years prior.

Module VI: DOCUMENTARY STAMP TAX

Description

Documentary Stamp Tax is a tax on documents, instruments, loan agreements and papers
evidencing the acceptance, assignment, sale or transfer of an obligation, right or property
incident thereto.

Tax Forms

BIR Form 2000 (Documentary Stamp Tax Declaration Return);

BIR Form 2000-OT Documentary Stamp Tax Declaration Return (One- Time Transactions)

What are the documents/ papers not subject to Documentary Stamp Tax?

Under Section 9 of Revenue Regulations No. 13-2004, the following documents and papers
are not subject to DST:

 Policies of insurance or annuities made or granted by a fraternal or beneficiary

society, order, association or cooperative company, operated on the lodge system

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 or local cooperation plan and organized and conducted solely by the members
thereof for the exclusive benefit of each member and not for profit
 Certificates of oaths administered by any government official in his official capacity
or acknowledgement by any government official in performance of his official duty
 Written appearance in any court by any government official in his official capacity
 Certificates of the administration of oaths to any person as to the authenticity of any
paper required to be filed in court by any person or party thereto, whether the
proceedings be civil or criminal
 Papers and documents filed in court by or for the national, provincial, city or municipal
governments
 Affidavits of poor persons for the purpose of proving poverty
 Statements and other compulsory information required of persons or corporations by
the rules and regulations of the national, provincial, city or municipal government
exclusively for statistical purposes and which are wholly for the use of the Bureau or
office in which they are filed, and not at the instance or for the use or benefit of the
person filing them
 Certified copies and other certificates placed upon documents, instruments and
papers for the national, provincial, city or municipal governments made at the
instance and for the sole use of some other branch of the national, provincial, city or
municipal governments
 Certificates of the assessed value of lands, not exceeding P200 in value assessed,
furnished by the provincial, city or municipal Treasurer to applicants for registration of
title to land
 Borrowing and lending of securities executed under the Securities Borrowing and
Lending Program of a registered exchange, or in accordance with regulations
prescribed by the appropriate regulatory authority: Provided, however, That any
borrowing or lending of securities agreement as contemplated hereof shall be duly
covered by a master securities borrowing and lending agreement acceptable to the
appropriate regulatory authority, and which agreement is duly registered and
approved by the Bureau of Internal Revenue (BIR)
 Loan agreements or promissory notes, the aggregate of which does not exceed Two
hundred fifty thousand pesos (P250,000), or any such amount as may be determined
by the Secretary of Finance, executed by an individual for his purchase on installment
for his personal use or that of his family and not for business or resale, barter or hire of
a house, lot, motor vehicle, appliance or furniture: Provided, however, That the
amount to be set by the Secretary of Finance shall be in accordance with a relevant
price index but not to exceed ten percent (10%) of the current amount and shall
remain in force at least for three (3) years
 Sale, barter or exchange of shares of stock listed and traded through the local stock
exchange (R.A 9648)
 Assignment or transfer of any mortgage, lease or policy of insurance, or the renewal
or continuance of any agreement, contract, charter, or any evidence of obligation
or indebtedness, if there is no change in the maturity date or remaining period of
coverage from that of the original instrument.
 Fixed income and other securities traded in the secondary market or through an
exchange.
 Derivatives: Provided, that for purposes of this exemption, repurchase agreements
and reverse repurchase agreements shall be treated similarly as derivatives

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  Inter-branch or interdepartmental advances within the same legal entity
 All forbearances arising from sales or service contracts including credit card and
trade receivables: Provided, That the exemption be limited to those executed by the
seller or service provider itself.
 Bank deposit accounts without a fixed term or maturity
 All contracts, deeds, documents and transactions related to the conduct of business
of the Bangko Sentral ng Pilipinas
 Transfer of property pursuant to Section 40(C)(2) of the National Internal Revenue
Code of 1997, as amended
 Inter-bank call loans with maturity of not more than seven (7) days to cover deficiency
in reserves against deposit liabilities, including those between or among banks and
quasi-banks

Further, Section 20 of RR No. 4-2018 exempts from DST the following donations or gifts that
are exempt from donor’s tax:

a. Gifts Made by a Resident:

 Gifts made to or for the use of the National Government or any entity created by any
of its agencies which is not conducted for profit, or to any political subdivision of the
said Government; and
 Gifts in favor of an educational and/or charitable, religious, cultural or social welfare
corporation, institution, accredited nongovernment organization, trust or
philanthropic organization or research institution or organization: Provided, however,
that not more than thirty percent (30%) of said gifts shall be used by such donee for
administration purposes. For the purpose of this exemption, a 'non-profit educational
and/or charitable corporation, institution, accredited nongovernment organization,
trust or philanthropic organization and/or research institution or organization' is a
school, college or university and/or charitable corporation, accredited
nongovernment organization, trust or philanthropic organization and/or research
institution or organization, incorporated as a non-stock entity, paying no dividends,
governed by trustees who receive no compensation, and devoting all its income,
whether students' fees or gifts, donation, subsidies or other forms of philanthropy, to
the accomplishment and promotion of the purposes enumerated in its Articles of
Incorporation.

b. Gifts Made by a Non-resident not a Citizen of the Philippines:

 Gifts made to or for the use of the National Government or any entity created by any
of its agencies which is not conducted for profit, or to any political subdivision of the
said Government; and
 Gifts in favor of an educational and/or charitable, religious, cultural or social welfare
corporation, institution, accredited nongovernment organization, trust or
philanthropic organization or research institution or organization: Provided, however,
that not more than thirty percent (30%) of said gifts shall be used by such donee for
administration purposes.

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 What are the implications of failure to stamp taxable documents?

An instrument, document, or paper which is required by law to be stamped and which has
been signed, issued, accepted or transferred without being duly stamped, shall not be
recorded, nor shall it or any copy thereof or any record of transfer of the same be admitted
or used in evidence in any court until the requisite stamp or stamps shall have been affixed
thereto and cancelled.

No notary public or other officer authorized to administer oaths shall add his jurat or
acknowledgment to any document subject to documentary stamp tax unless the proper
documentary stamps are affixed thereto and cancelled.

What is Electronic Documentary Stamp Tax (eDST) System?

The eDST is a web-based application created for taxpayers and the BIR that is capable of
affixing a secured documentary stamp on the taxable documents as defined under the
appropriate provisions under Title VII of the National Internal Revenue Code of 1997, as
amended, thru the use of a computer unit, any laser printer with at least 1200 dpi resolution,
and Internet Explorer 7.0 It is also capable of providing a 3-layer watermark on stamps for
added security. (Sec. 5 (1), RR No. 7-2009)

Is DST Law applicable on Electronic Documents?

The DST rates as imposed under the Code, as amended by R.A. 9243 and further amended
by R.A. 10963 shall be applicable on all documents not otherwise expressly exempted by the
said law, notwithstanding the fact that they are in electronic form. As provided for by R.A.
8792, otherwise known as the Electronic Commerce Act, electronic documents are the
functional equivalent of a written document under existing laws, and the issuance thereof is
therefore tantamount to the issuance of a written document, and therefore subject to DST.
(Sec. 10, RR No. 13-2004 as amended by RR No. 4-2018)

What are the inclusions of the term debt instrument?

“Debt Instrument” shall mean instruments representing borrowing and lending transaction
including but not limited to:

 debentures
 certificates of indebtedness
 due bills
 bonds
 loan agreements, including those signed abroad wherein the object of the contract
is located or used in the Philippines
 instruments and securities issued by the government or any of its instrumentalities
 deposit substitute debt instruments
 certificates or other evidences of deposits that are drawing instrument significantly
higher than the regular savings deposit taking into consideration the size of the
deposit and the risks involved

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  certificates or other evidences of deposits that are drawing interest and having a
specific maturity date
 promissory notes, whether negotiable or non-negotiable, except bank notes issued
for circulation (Sec. 5, RR No. 13-2004)

Is any document, transaction or arrangement entered into under Financial Lease subject to
Documentary Stamp Tax?

Financial lease is akin to a debt rather than a lease. A nature of an obligation than a lease
of personal property. The mere act of extending credit is already a means of facilitating an
obligation or advancing in behalf of the lessee certain property in lieu of cash in exchange
for a definitive amortization to be paid to the lessor with profit margin included. Section 179
of the NIRC, as amended, covers all debt instruments. Therefore, being a nature of an
obligation, any document, transaction or arrangement entered into under financial lease is
subject to DST under such Section of the NIRC, as amended. (RMC No. 46-2014)

Documentary Requirements
Mandatory

1. Photocopy of the document to which the documentary stamp shall be affixed

2. Proof of exemption under special laws, if applicable;
3. Proof of payment of documentary stamp tax paid upon the original issue of the stock,
if applicable.

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 Tax Rates
Tax Code Document Taxable Unit Tax Due Per Unit % of Unit Taxable Base
Section

174 Original P200.00 or fraction 2.00 1% Par value of shares of stocks

Issue of thereof
Shares of
Stock with
par value

Original 2.00 1% Actual consideration for the issuance

Issue of P200.00 or fraction of shares of stocks
Shares of thereof
Stock
without par
value
Actual value represented by each
Stock P200.00 or fraction 2.00
1% share
Dividend thereof

175 Sales, P200.00 or fraction 1.50 0.75% Par value of such stock
Agreements thereof
to Sell,
Memorand
a of Sales,
Deliveries
or Transfer
of Shares
or Certifica

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 tes of
Stock

Stock
DST paid upon the original issuance of
without par
50% said stock.
value

176 Bonds, P200.00 or fraction .75 .375% Par value of such bonds, debentures,
Debentures, thereof Certificate of Stock or Indebtedness
Certificate
of Stock or
Indebtedne
ss issued in
foreign
Countries

177 Certificate P200.00 or fraction 1.00 .5% Face value of such certificates /
of Profits or thereof memorandum
Interest in
Property or
Accumulati
on

178 Bank On each Document 3.00

Checks,
Drafts,
Certificate
of Deposit

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 not bearing
interest an
d other
Instruments

179 All Debt P200.00 or fraction 1.50 .75% Issue price of any such debt
Instruments thereof instruments or a fraction of 365 days
for instrument with term of less than 1
year

180 All Bills of P200.00 or fraction .60 .3% Face value of any such bill of
Exchange thereof exchange or draft
or Drafts

181 Acceptanc P200.00 or fraction .60 .3% Face value of such bill of exchange or
e of Bills of thereof order or the Philippine equivalent of
Exchange such value, if expressed in foreign
or order for currency
the
payment of
money
purporting
to be drawn
in a foreign
country but
payable in
the
Philippines

182 Foreign Bills P200.00 or fraction .60 .3% Face value of such bill of exchange or
of thereof letter of credit or the Philippine
Exchange

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 and Letters equivalent of such value, if expressed
of Credit in foreign currency

183 Life If the amount of exempt Amount of Insurance

Insurance insurance does not
Policies exceed P100,000.00

20.00 Amount of Insurance

If the amount of
insurance exceeds
P100,000.00 but
does not exceed
P300,000.00

50.00 Amount of Insurance

If the amount of
insurance exceeds
P300,000.00 but
does not exceed
P500,000.00

100.00 Amount of Insurance

If the amount of
insurance exceeds
P500,000.00 but
does not exceed
P750,000.00

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 150.00 Amount of Insurance

If the amount of
insurance exceeds
P750,000.00 but
does not exceed
P1,000,000.00
200.00 Amount of Insurance

If the amount of
insurance exceeds
P1,000,000.00

184 Policies Of P4.00 premium or .50 12.5% Premium charged

Insurance fraction thereof
upon
Property

185 Fidelity P4.00 premium or .50 12.5% Premium charged

Bonds and fraction thereof
other
Insurance
Policies

186 Policies of P200.00 or fraction 1.00 .5% Premium or installment payment or

Annuities or thereof contract price collected
other
instruments

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 .40 .20% Premium or contribution collected

P200.00 or fraction
thereof
Pre-Need
Plans

187 Indemnity P4.00 or fraction .30 7.5% Premium charged

Bonds thereof

188 Certificates Each Certificate 30.00

of Damage
or otherwise
and
Certificate
or
document
issued by
any
customs
officers,
marine
surveyor,
notary
public
and certifi
cate
required by
law or by
rules and
regulations

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 of a public
office

189 Warehouse Each Receipt 30.00

Receipts
(except if
value does
not exceed
P200.00)

190 Jai-alai, P1.00 and below .20 20% Cost of the ticket
Horse Race cost of ticket
Tickets, lotto
or Other
Authorized
Number G Cost of the ticket
ames Additional P0.20 on
every P1.00 or
fraction thereof if
cost of ticket
exceeds P1.00

191 Bills of If the value of such 2.00 Value of such goods

Lading or goods exceeds
Receipts(ex P100.00 and does
cept not exceed
charter P1,000.00
party)
20.00 Value of such goods

If the value exceeds

P1,000.00

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 Exempt

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

192 Proxies Each proxy 30.00

(except
proxies
issued
affecting
the affairs of
associations
or corpora
tions,
organized
for religious,
charitable
or literary
purposes)

193 Powers of Each Document 10.00

Attorney

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 (except
acts
connected
with the
collection of
claims due
from or
accruing to
the
Governmen
t of
the Republ
ic of the
Philippines,
or the
government
of any
province,
city or
Municipality
)

194 Leases and First 2,000 or 6.00 .3%

other Hiring fractional part
agreements thereof
or
memorand
um or
contract for 2.00 .2%
hire, use or
rent of any For every P1,000 or
lands or fractional part

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 tenements thereof in excess of
or portions the first P2,000 for
thereof each year of the
term of the said
contract
or agreement

195 Mortgage First 5,000 40.00 .8% Amount Secured

or Pledge of
lands,
estate, or
property
and Deeds On each P5,000 or 20.00 .4% Amount Secured
of Trust fractional part
thereof in excess of
5,000

196 Deed of First 1,000 15.00 1.5% Consideration or Fair Market Value,
Sale, whichever is higher (if government is
Conveyanc a party, basis shall be the
es, consideration)
Donations
of
Real Prope
rty (except
grants, Consideration or Fair Market Value,
patents or whichever is higher (if government is
For each additional 15.00 1.5% a party, basis shall be the
original P1,000 or fractional
certificate consideration)
part thereof in
of excess of P1,000
adjudicatio
n issued by
the

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 government
)

197 Charter Charter parties and

parties and similar instruments if
Similar gross tonnage of the
Instruments ship, vessel or
steamer is:

1st 6 months Registered gross tonnage

1,000 tons and P1,000.00
below In excess + P 100.00

1st 6 months
P2,000.00 Registered gross tonnage
In excess + P200.00
1,001 to 10,000 tons

1st 6 months P3,000

In excess + 300

Registered gross tonnage

Over 10,000 tons

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 198 Stamp Tax At the same rate
on as that imposed on
Assignments the original
and instrument.
Renewals or
Continuanc
e of
Certain Inst
ruments

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 Procedures

 BIR FORM 2000 - (DOCUMENTARY STAMP TAX DECLARATION RETURN)

Who Shall File

The return shall be filed in triplicate by the following:

1. In the case of constructive affixture of documentary stamps, by the person making,

signing, issuing, accepting, or transferring documents, instruments, loan agreements and
papers, acceptances, assignments, sales and conveyances of the obligation, right or
property incident thereto wherever the document is made, signed, issued, accepted or
transferred when the obligation or right arises from Philippine sources or the property is
situated in the Philippines at the same time such act is done or transaction had;

2. In the case of Electronic Documentary Stamp Tax (eDST) System user, by the taxpayers
belonging to the industries mandated to use the web-based eDST System in the
payment/remittance of DST liabilities and the affixture of the prescribed documentary stamp
on taxable documents and taxpayers who, at their option, choose to pay the DST liabilities
thru the eDST System pursuant to Revenue Regulations (RR) No. 7-2009; and

3. By a revenue collection agent for remittance of sold loose documentary stamps.

Whenever one party to the taxable document enjoys exemption from the tax herein
imposed, the other party thereto who is not exempt shall be the one directly liable for the
tax.

When and Where to File

The return shall be filed within five (5) days after the close of the month when the taxable
document was made, signed, issued, accepted or transferred or upon remittance by
revenue collection agents of collection from the sale of loose documentary stamps.

The return shall be filed with the Authorized Agent Bank (AAB) within the territorial jurisdiction
of the Revenue District Office where the residence or place of business of the taxpayer is
located or where the collection agent is assigned. In places where there are no AABs, the
return shall be filed directly with the Revenue Collection Officer (RCO) within the Revenue
District Office which has jurisdiction over the residence or place of business of the taxpayer
or where the collection agent is assigned.

When and Where to Pay

Upon filing of this return, the total amount payable shall be paid to the AAB where the return
is filed within five (5) days after the close of the month when the taxable document was
made. In places where there are no AABs, the tax shall be paid with the Revenue Collection
Officer who shall issue an Electronic Revenue Official Receipt (eROR) therefor.

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 When the return is filed with an AAB, taxpayer must accomplish and submit BIR-prescribed
deposit slip, which the bank teller shall machine validate as evidence that payment was
received by the AAB. The AAB receiving the tax return shall stamp mark the word “Received”
on the return and also machine validate the return as proof of filing the return and payment
of the tax by the taxpayer, respectively. The machine validation shall reflect the date of
payment, amount paid and transactions code, the name of the bank, branch code, teller’s
code and teller’s initial. Bank debit memo number and date should be indicated in the return
for taxpayers paying under the bank debit system.

For eDST System User

Prior to the enrollment in the eDST System, taxpayers availing thereof, whether on the
mandatory or optional basis, shall be duly enrolled under the BIR Electronic Filing and
Payment System (eFPS). In paying the DST liabilities, BIR Form No. 2000 shall be filed and the
amount due thereon shall be paid thru the eFPS for taxpayers and PhilPass Facility of the
Bangko Sentral ng Pilipinas for banks (AABs and non-AABs).

For eFPS Taxpayer

The deadline for electronically filing and paying the taxes due thereon shall be in
accordance with the provisions of existing applicable revenue issuances.

 BIR FORM 2000-OT DOCUMENTARY STAMP TAX DECLARATION RETURN (ONE-TIME

TRANSACTIONS)

Who Shall File

The return shall be filed in triplicate by the following person making, signing, issuing,
accepting or transferring the document or facility evidencing transaction:

1. Every natural or juridical person, resident or non-resident, for donation, sale, barter,
exchange or other onerous disposition of shares of stock in a domestic corporation, classified
as capital asset, not traded in the local stock exchange;

2. Every withholding agent/buyer/seller on the sale, transfer or exchange of real property

classified as capital asset. The “sale” includes pacto de retro sale and other forms of
conditional sale; and

3. Every withholding agent/buyer/seller on the sale, transfer or exchange of real property

other than capital asset.

4. Every natural or juridical person, resident or non-resident, for donation of real properties.

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 Whenever one party to the taxable document enjoys exemption from the tax herein
imposed, the other party thereto who is not exempt shall be the one directly liable for the
tax.

When and Where to File and Pay

The return shall be filed and the tax paid within five (5) days after the close of the month
when the taxable document was made, signed, issued, accepted or transferred.

The return shall be filed with and the tax paid to the Authorized Agent Bank (AAB) within the
territorial jurisdiction of Revenue District Office (RDO) where the seller/transferor/donor is
required to be registered or where the property is located in case of sale of real property.

When the return is filed with an AAB, taxpayer must accomplish and submit BIR-prescribed
deposit slip, which the bank teller shall machine validate as evidence that payment was
received by the AAB. The AAB receiving the tax return shall stamp mark the word “Received”
on the return and also machine validate the return as proof of filing the return and payment
of the tax by the taxpayer, respectively.

The machine validation shall reflect the date of payment, amount paid and transactions
code, the name of the bank, branch code, teller’s code and teller’s initial. Bank debit memo
number and date should be indicated in the return for taxpayers paying under the bank
debit system.

Payments may also be made thru the epayment channels of AABs or online facility,
credit/debit/prepaid cards, and mobile payments.

For transactions covered by one (1) Deed of Sale/Exchange/Donation involving one (1) to
three (3) properties, the taxpayer can avail of the fast lane pursuant to Revenue
Memorandum Circular (RMC) No. 43-2018, as amended by RMC No. 107-2018. Payments
amounting to twenty thousand pesos (P 20,000.00) and below shall be paid in cash while
payments above twenty thousand pesos (P 20,000.00) shall be made through Manager’s
Check or Cashier’s Check to the Revenue Collection Officer of the RDO concerned.

Related Revenue Issuances

Revenue Regulations (RR) Nos. 9-2000, 6-2001, 13-2004, 7-2009, 6-2014, 4-2018

Revenue Memorandum Order (RMO) Nos. 8-1998, 15-2001, 13-2008, 14-2008

Revenue Memorandum Circular (RMC) Nos. 1-2010, 24-2010, 51-2010, 24-2011, 46-2014, 3-
2018

OPM-AS-APMD 2017-06-06

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 OPM-AS-APMD 2017-06-01

Codal Reference

Secs. 51 to 70 of Republic Act No. 10963 of the Tax Reform for Acceleration and Inclusion
(TRAIN) Law

Sec. 173 to Sec. 201 of the National Internal Revenue Code (NIRC)

Website: www.bir.gov.ph

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