DOCUMENTARY STAMP TAX

Documentary stamp tax is an excise tax on the exercise of rights embodied in a certain
documents

NATURE OF DOCUMENTARY STAMP TAX

It is an excise tax upon the facilities for the transaction of the business separate and certain
apart from the business itself. It is levied on the exercise by persons of certain privileges conferred
by law for the creation, revision, or termination of specific legal relationships through the
execution of specific instruments.

PERSON LIABLE TO PAY THE DOCUMENTARY STAMP TAX.

The person making, signing, issuing, accepting or transferring documents. Either of the
contracting party is liable. Usually, it is the benefiting party to the transaction who pays the
documentary stamp tax but they may agree who between them who will pay the DST. If the ag
party fails to pay the DST, the government may enforce the payment to the other party. If one of
the contracting parties enjoys exemption from DST, the other party who is not exempt shall be
liable to pay the same.

MODES OF PAYMENT OF DST

1. Purchase of documentary stamp and actual affixture on the document.
2. Imprinting a secured stamp on the taxable document through the web-based electronic
documentary stamp tax (eDST) System.
3. Constructive affixture by filing the documentary stamp tax return (Form 2000 /200OT)

DEADLINE OF PAYMENT OF DST - 5th day from the close of the month when the taxable
document was signed, issued, accepted or transferred.

Who shall file the documentary stamp tax return?

Mode of payment
Loose stamps or actual affixture
Machine imprinted stamps
Constructive affixture
Person liable who file
Revenue collection officer who sold the stamps
Imprinting machine user
The person making, signing, issuing, accepting
or transferring document

Attachment to the documentary stamp tax return

1. Photocopy of the document
2. Proof of payment of the documentary stamp tax
3. Schedule showing the details of the usage or consumption of the documentary stamps.

Effects of non-compliance
Non-payment of DST shall not invalidate the document but non payment of it will result to
the following:
1. Document is not acceptable for recording in the Registry of Deeds.
2. Document is not admissible as evidence in court
3. Notary or other officers authorized to administer oaths shall not affix his acknowledgment
on the documents unless the documentary stamp is affixed thereto and cancelled.

LIST OF DOCUMENTS/TRANSACTIONS SUBJECT DST

1. Real properties
A. Deed of sale
B. Donation
2. Shares of stocks 0 0
A. Original issue of shares
B. Transfers of shares
3. Certificate of profits or interest in property or accumulations
4. Bonds, debentures, certificate of stocks or indebtedness issued in foreign countries.
5. Indemnity bonds
6. Bank checks, drafts, certificates of deposits not bearing interest, and other instrument.
7. Bills of exchange or drafts

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8. Acceptance of bills of exchange and others
9. foreign bills of exchange and letters of credits.
10. Debt instruments
11. Insurance
A. Life insurance policies
B. Property insurance
C. Fidelity bonds and other insurance policies
12. Policies of annuities and pre-need plans
13. Certificates
14. Warehousing receipts
15. Bills of lading or receipts
16. Proxies
17. Power of attorney
18. Leases and other hiring agreements
19. Mortgages, pledges and deeds of trusts
20. Charter parties and similar arrangements
21. Assignment and renewals of certain instruments.

Basic principle of imposition of DST

1. One transaction, one tax basis
2. Scope of taxable transaction - DST is imposed whenever the right or obligation arises in
the Philippines or the object of the contract is in the Philippines regardless of the place where the
document is executed.
3. Invalidity of the contract does not affect DST imposition
4. Only transactions or documents listed by law is taxable

DST on Sale of Real Properties - P15 for every P1,000 or 1.5% of the selling price or fair market value
whichever is higher except to government
Ex. 1 Mr. AA sold 500 sq. m. lot for P5,000,000 to Mr. B. The zonal value of BIR is P4,500,000 while
the market value of the assessor is P4,800,000. Compute for the DST.

Selling price 5,000,000.00

Multiply: 1.50%
DST 75,000.00

Ex. 2 Mr. AA sold 500 sq. m. lot for P4,000,000 to Mr. B. The zonal value of BIR is P4,500,000 while
the market value of the assessor is P4,800,000. Compute for the DST.

Market value of the asessor 4,800,000.00

Multiply: 1.50%
DST 72,000.00

DST on donation of real properties - P15 for every P1,000 or 1.5% of the fair market value except to gov
Ex. 1 Mr. AA donated a 500 sq. m. lot which he acquired for P5,000,000 to Mr. B. The zonal value of
BIR is P4,500,00 while the market value of the assessor is P4,800,000. Compute for the DST.

Market value of the asessor 4,800,000.00

Multiply: 1.50%
DST 72,000.00

Ex. 2 Mr. AA donated a 500 sq. m. lot which he acquired for P5,000,000 to Mr. B. The zonal value of
BIR is P4,000,00 while the market value0of the assessor 0 is P4,500,000. Compute for the D
Market value of the asessor 4,500,000.00
Multiply: 1.50%
DST 67,500.00

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 Summary of DST rules on real property
1. Sale to government - exempted from DST
2. Sale to private persons - selling price or fair market value, whichever is higher.
3. Donation to government - exempted from DST
4. Donation to accredited non-profit - exempted from DST
5. Donation to other donees - fair market value (market value or zonal value, whichever is higher)

Stamp taxes on shares of stock

Original Issue of Stocks - P2.00/P200 of par value. If the stocks issued is a no-par value s
the DST shall be based on the actual consideration. In the case of stock dividend, the DST is based
on the actual value represented by each share.
Examples of taxable transactions:
1. Approval of the application for registration of stock corporations with the SEC.
2. Increase of authorized capitalization with the SEC requiring minimum subscription of 25%
based on authorized capitalization.
3. Issuance of unsubscribed authorized capitalization requiring an application for confirmation
of Securities Regulation Code exemption.
4. Issuance of shares of stocks through declaration of stock dividends in the Philippines.

Ex. 1 AA Corp. issued P10,000,000 divided into 200,000 shares with a P50/share par
On Aug. 1, 2020, 80,000 shares of the common shares were subscribed. Subscribers paid 40%
of the their subscription receivables. The balance shall be paid on Dec. 1, 2020.

Total subscription (80,000 x P50) 4,000,000.00

Multiply by: rate (P2/P200) 1%
DST 40,000.00

Ex. 2 AA Corporation issued 100,000 no-par value stocks for a used equipment with a
value of P800,000. The stocks have a stated value of P5/share in the by-laws.

Value of consideration 800,000.00

Multiply: rate (P2/200) 1%
DST 8,000.00

Subsequent sale of stocks - P1.50 per P200 of par value, or fractional thereof. In case of no-par
value stocks, the DST shall be 50% of the DST paid on the original issue of such stocks.

Ex. 1 Mr. AA is a holder of 10,000 P100-par value shares which he purchased for a
consideration of P1,800,000. He sold 4,000 shares for P240/share

Par value of stocks (4,000 X P100) 400,000.00

Multiply: rate (P1.5/P200) 0.75% 0.0075
DST 3,000.00

Ex. 2 Mr. AA sold 10,000 no par value shares of DEF Company for P200/share. He purchased
the shares for P150/share from a buyer who bought the shares from DEF Company for P120/share.

Original issue price (10,000xP120) 1,200,000.00

Multiply: rate (P2/P200) 0 0 1%
DST paid on original issuance 12,000.00
Multiply: percentage 50%
DST on subsequent issuance 6,000.00
Statutory merger
A company entered into a statutory merger with B Company wherein A shall issue shares in
exchange for the shares of B Company. Incident thereto, B Company's assets which include

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some real estate and liabilities shall be assumed by A Company.
The issuance of A's shares shall be subject to DST/ However, the exchanges of B's shares
by its shareholders, the surrender of the real property of B, and A's assumption of B's liabilities
shall not be separately subject to DST.

Special cases:
1. Issue of stocks for property
Ex. Mr. AA invested his commercial land in the stocks of BB Corporation. BB Corp.
issued him 1,000,000 shares with P10/share par value. The commercial land has a zonal value
of P12,000,000. In this case, the property is not said to have been sold because this is an
investment transaction. It is the issue of the stocks that should be subject to DST. The D
shall be computed as follows:

Deemed sold (1,000,000xP10) 10,000,000.00

Multiply: rate (P2/P200) 1.0%
DST 100,000.00

2. Stock dividend - the basis for the computation of DST is the value represented by the
stock dividend.
Ex. ABC Company declared P10,000,000 stock dividends. Its stock which has P20/share
par value has a current fair value of P100/share.

Value of stock dividend 10,000,000.00

Multiply: rate (P2/P200) 1%
DST 100,000.00

3. Initial Public Offering and sale of stocks through of PSE - not subject to DST.

4. Deposit for future stock subscription - not subject to DST

Stamps Tax on Certificates of profits or interest in Property or Accumulations - P1/P200 or

fractional parts thereof, of the face value of such certificate of memorandum.

DST on Debt instruments - P1.5/P200, or fractional part thereof, of the issue price of any
such debt instrument.

Loan Agreement - P1.5/P200 of the loan principal

Short term loan agreement - P1.5/P200 of the loan principal taking into consideratio
period of loan agreement.
ILLUSTRATION
On Jan. 1, 2020, AA Corp. entered into a loan agreement with BB Corp. whereby BB Corp. lent
AA Corp. P800,000 at 12% interest per annum due in Oct. 31, 2020.
Loan principal 800,000.00
Multiply: rate (P1.5/200) 0.75%
DST for 1 year 6,000.00
Multiply: prorated term (305 days/365 days) 84%
DST 5,013.70

Exemption to the DST on loans:

1. Borrowing and lending of securities executed under the Securities Borrowing and Lending
Program. 0 0
2. Loan agreements or promissory notes not exceeding an aggregate amount of PP250,0
executed by individuals on non-business purchases or hire of a house, lot motor vehicle,
appliance or furniture on installments.
3. Interbranch or interdepartmental advances within the same legal entity.
4. Forbearances arising from sales or services contracts including credit card and trade
receivables.
5. Bank deposit accounts without a fixed term or maturity

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6. Interbank call loan with maturity of not more than 7 days to cover deficiencies in reserves
against deposit liabilities, including those between or among bank or quasi banks.
7. Derivatives including repurchase agreements and reverse repurchase agreements.
8. Fixed income and other securities traded in secondary markets or through an exchange.

DST on Bonds, Debentures, Certificates of Stocks or Indebtedness Issued in Foreign Countries

Not subject to DST but when sold in the Philippines subject to DST.

Domestic Foreign
Shares of Stocks
Issuance P1.5/P200 Exempt
Transfer of stocks P1.5/P200 P1.5/P200

Debt Instruments
Issuance P1.5/P200 Exempt
Assignment of Debt Instruments P1.5/P200 P1.5/P200

Stamp on Mortgages, Pledges and Deeds of Trusts

Amount not exceeding P5,000 ----- P40
On each P5,000, or fractional part thereof in excess of P5,000 ------ P20

Ex. Mr. AA bought John residential house for P4,000,000. Paid P1,000,000 down an
mortgage back the property as security for P3,000,000
Mortgage 3,000,000.00
Less: threshold 5,000.00
Excess 2,995,000.00
Divide: 5,000.00
Total 599.00
Multiply: amount 20.00
DST in Excess over P5,000 11,980.00
Add: DST on P5,000 40.00
Total DST 12,020.00

DST on bills of Exchange, Drafts or Order - P0.60/P200 of the face value

Exempt from DST

1. Electronic instruction to transfer fund
2. Remittance of OFWs

DST on bank checks, drafts, certificate of deposits, not bearing interest and other instruments
DST - P3 on each check, draft, or certificate of deposit not drawing interest 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 corporations, at sight or demand.
Ex. A depositor of AA Bank requested for a booklet of personal check consisting of 50
copies for drawing against his current account.

No. of checks 50.00

Multiply: DST per check 3.00
DST 150.00
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DST on bills of lading or receipts
On each set of bills of lading or receipt for any good, merchandise, or effect shipped from
Philippine port to another Philippine port or from Philippine port to any foreign port
P2 - if the value of goods exceeds P100 but does not exceed P1,000
P20 - exceeding P1,000

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Except:
A. Charter party
B. Ferries across rivers
3. Baggages accompanying passengers of land and water carriers.

Ex. AA Shipping received the following goods for shipment from various clients during
the month:
Amount declared Inter-domestic For abroad
less than P100 12 -
P101 to P1,000 314 114.00
More than 1,000 191 148.00

less than P100 -

P101 to P1,000 (314X2) 628.00
More than 1,000 (191x20) 3,820.00
DST 4,448.00

P101 to P1,000 (114X2) 228.00

More than 1,000 (148*20) 2,960.00
DST 3,188.00

DST on inter-domestic shipping 4,448.00

DST on outbound for abroad 3,188.00
Total DST 7,636.00

DST on Warehouse Receipts

P30 per receipt except
1. Receipts issued for goods worth P200 or less to any person in any calendar month.
2. Receipts issued by the warehouse owner for his own goods.

Ex. AA Warehousing Co. maintains a warehouse in Bacolod City for various comme
clients. During the month it issued the following
No. of receipts Value declared
Receipts issued with Value less than P200 2.00 180
Receipts issued with Value more than P200 49.00 378,000.00
Receipts issued for own goods 3.00 42,000.00

DST (P30X49) 1,470.00

DST ON LEASE AGREEMENT

On the value of the lease contract:
First P2,000 ------- P6.00
For every P1,000 in excess of P2,000 ------ P2.00

Ex. 1 Mr. AA is leasing a bodega to Mr. BB. The annual rental is P120,000. The lease
contract covers 1 year.
In excess over P2,000 (120,000-2,000) 118,000.00
Divide: 1,000.00
Basis 118.00
multiply: 2.00
DST on the excess over P2,000 236.00
Add: DST on P2,000 0 0 6.00
Total DST 242.00

Ex. 2 Mr. AA is leasing a bodega to Mr. BB. The annual rental is P120,000. The lease
contract covers 5 year.
In excess over P2,000 ((120,000x5)-2,000) 598,000.00
Divide: 1,000.00
Basis 598.00

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multiply: 2.00
DST on the excess over P2,000 1,196.00
Add: DST on P2,000 6.00
Total DST 1,202.00

DST on charter parties and similar instruments

on every charter party, contract or agreement of charter of any ship, vessel or streamer,
including renewal or transfer of such charter, contract or agreement, there shall be collecte
documentary stamp tax:
DURATION OF THE CHARTER
Ship gross tonnage FIRST 6 MONTHS EXCESS OVER 6 MONTHS
NOT MORE THAN 1,000 TONS P1,000 P100/month or fraction
MORE THAN 1,000 TONS BUT NOT MORE THAN 10,000 TONS P2,000 P200/month or fraction
MORE THAN 10,000 TONS P3,000 P300/month or fraction

Ex. AA Shipping Lines chartered a 5,000-tonner vessel at a contract price of P1,000,000

per month for 9 1/2 months.

First six months 2,000.00

In excess over 6 months (10-6)
(4X200) 800.00
DST 2,800.00

DST on Indemnity Bonds, Annuities, Pre-Need Plans and Insurance

Life insurance Policies Per policy
Not more than P100,000 exempt
More than P100,000 to P300,000 P20
More than P300,000 to P500,000 P50
More than P500,000 to P750,000 P100
More than P750,000 to P1,000,000 P150
More than P1,000,000 P200

Other Insurance Insurance Policies, Indemnity, Annuity or Pre-Need Contracts

On premium or
fraction thereof
Property insurance policies P0.50/P4
Fidelity bonds and other insurance policies P0.50/P4
Indemnity bonds P0.30/P4
Annuities or pre-need P1.00/P200

Ex. AA Assurance Corp. had the following data on its premium register on non-life
insurance contracts:
Total premium charges 4,000,000.00
Less: returned premiums 300,000.00
Net premiums received 3,700,000.00

Total premiums 0 0
4,000,000.00
Multiply: rate (P0.5/P4) 12.50%
DST 500,000.00
DST on Certificates
On each certificate of damage or otherwise, and on every certificate or document issued b
customs officer, marine surveryor, or other person acting as such, and on each certificate issued
by law or by rules or regulations of a public office or which is issued for the purpose of giving

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information, or establishing proof of fact, and not otherwise specified, there shall be
collected a documentary stamp tax of P30.

DST on Proxies
On each proxy for voting at any election for officers or any company or corporation, or for any
other purposes, there shall be collected a documentary stamp tax of P30.

DST on Power of Attorneys - P10 for each power of attorney to perform an act except
power of attorneys involving 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.

DST on jai-alai and horse race tickets, lotto and other authorized number games
On each jai-alai, horse race ticket, lotto or other authroized number games, there shall be
collected a documentary stamp tax as follows

Ticket Cost DST

Not more than P1.00 P0.20
More than P1.00 P0.20/P1.00 or fractional thereof

DST on Assignments and Renewals of Certain Instruments

There shall be collected a documentary stamp tax at a rate the same as that imposed on the
original instrument upon:
!. Every assignment or transfer of any:
A. Mortgage
B. Lease
C. Policy Insurance
2. Renewal or continuance by altering or otherwise of any:
A. Agreement
B. Contract
C. Charter
D. Any evidence of indebtedness

Documents and Papers Not Subject to Stamp Tax

1. Policies of insurance made or granted by a fraternal, society, order, association or cooperative
company
2. Certificate of oaths administered by any government official in his official capacity
3. Borrowing or lending of securities under the Securities Borrowing and Lending Program
4. Loans agreement or promissory notes, the aggregate of which do not exceed P250,000 of non-
business purposes.
5. Sales, barter or exchange of shares of stocks listed and traded through the local stock
exchange.
6. Assignment or transfer of any mortgage, lease or policy of insurance or renewal or
continuances of any agreement, contract, charter or evidence of obligation or indebtedness,
if there is no change in the maturity date or remaining period of coverage from that of the
original document.
7. Fixed income or other documents traded in the secondary market
8. Derivatives, including repurchase agreements and reverse repurchase agreements.
9. Inter-branch or interdeparmental advances within the same legal entity
10. All forbearances arising from sales or service contracts including credit cards and trade
receivables (limited to those executed by the seller or service provider)
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11. Bank deposit without a fixed term or maturity 0
12. All contracts, deeds, documents and transactions related to the conduct of business of the
BSP.
13. Tax free transfers of property such as corporate readjustment
14. Interbank call loans with maturity of more than 7 days to cover deficiencies in reserve
deposit liabilities, including those made between banks and quasi-banks.
15. Remittance of all OFWs.

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Source: Transfer and Bsuiness Taxation by Rex Banggawan 2019 ed.

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