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.

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Tax Forms

BIR Form 2000 (Documentary Stamp Tax Declaration Return);

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

Transactions)

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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 Document Taxable Unit Tax Due Per % of Unit Taxable Base
Cod Unit
e
Sect
ion
174   Original P200.00 or 2.00                 1%  Par value of shares of
Issue of fraction thereof         stocks                              
Shares of        
Stock with   2.00   Actual consideration for the
par value P200.00 or                        1%  issuance of shares of
fraction thereof     stocks                              
Original Issue                            2.00                      
of Shares of   Actual value represented
Stock without   1% by each share
 P200.00 or
par value fraction thereof

Stock
Dividend
175   Sales, P200.00 or 1.50     0.75%                       Par value of such stock
Agreements fraction thereof                       
to Sell,  50%  
Memoranda  
of Sales,  
Deliveries  
or Transfer DST paid upon the original
of Shares or issuance of said stock.
Certificates
of Stock   
 
 
 
Stock
without par
value
 176   Bonds, P200.00 or .75 .375% Par value of such bonds,
Debentures, fraction thereof  debentures, Certificate of
Certificate Stock or Indebtedness
of Stock or
Indebtedne
ss issued in
foreign
Countries 
 177   Certificate P200.00 or 1.00 .5% Face value of such
of Profits or fraction thereof certificates / memorandum
Interest in
Property or
Accumulatio
n
178   Bank On each 3.00    
Checks, Document
Drafts,
Certificate
of Deposit
not bearing
interest  
and other
Instruments
179   All Debt P200.00 or 1.50 .75% Issue price of any such
Instruments fraction thereof debt instruments or a
fraction of 365 days for
instrument with term of
less than 1 year
180   All Bills of P200.00 or .60 .3% Face value of any such bill
Exchange fraction thereof of exchange or draft
or Drafts
181   Acceptance P200.00 or .60 .3% Face value of such bill of
of Bills of fraction thereof exchange or order or the
Exchange Philippine equivalent of such
or   order value, if expressed in foreign
for the currency
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
of Exchange thereof exchange or letter of credit
and Letters or the Philippine equivalent
 of Credit of such value, if expressed
in foreign   currency
 183    Life If the amount of exempt      Amount of Insurance
   Insurance insurance does    
Policies not exceed     
P100,000.00    
   20.00    Amount of Insurance
     
If the amount of     
insurance exceeds    
P100,000.00 but    
does not exceed 50.00   Amount of Insurance
P300,000.00     
     
      
If the amount of    
insurance exceeds 100.00    Amount of Insurance
P300,000.00 but    
does not exceed    
P500,000.00     
     
  150.00    Amount of Insurance
If the amount of    
insurance exceeds    
P500,000.00 but     
does not exceed    
P750,000.00 200.00 Amount of Insurance
 
 
If the amount of
insurance exceeds
P750,000.00 but
does not exceed
P1,000,000.00
 
 
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 1.00 .5% Premium or installment
Annuities fraction thereof     payment or contract price
or other       collected 
instruments         
           
    .40 .20%  
   P200.00 or Premium or contribution  
  fraction thereof collected
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  
certificate
required by
law or by
rules and
regulations
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   Cost of the ticket
Other Additional P0.20
Authorized on every P1.00 or
Number   fraction thereof if
Games cost of   ticket
exceeds P1.00
191   Bills of If the value of 2.00      Value of such goods
Lading or such goods     
Receipts(exc exceeds P100.00     
ept charter and does not     
party) exceed P1,000.00 20.00   Value of such goods
        
   
If the value  
exceeds Exempt
P1,000.00
 
 
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  
corporation
s, organized
for
religious,
charitable
or literary
purposes)
193   Powers of Each Document 10.00    
Attorney
(except acts
connected
with the
collection of
 claims due
from or
accruing to
the
Governmen
t of the  
Republic 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      
memorandu   2.00   .2%
m or  
contract for For every P1,000
hire, use or or fractional part
rent of any thereof in excess
lands or of the   first
tenements P2,000 for each
or portions year of the term
thereof of the said
contract or  
agreement
195 Mortgage or First 5,000 40.00 .8% Amount Secured
Pledge of        
lands,        
estate, or On each P5,000 20.00 .4% Amount Secured
property or fractional part
and Deeds thereof in excess
of Trust of 5,000
196 Deed of First 1,000 15.00 1.5% Consideration or Fair
Sale,       Market Value, whichever is
Conveyance       higher (if   government is a
s,          party, basis shall be the
Donations            consideration)
of Real              
Property For each 15.00 1.5%  
(except additional P1,000 Consideration or Fair
grants, or fractional part Market Value, whichever is
patents or thereof in excess higher (if   government is a
original of P1,000 party, basis shall be the
certificate consideration)
of
adjudication
issued by
the
government
)
197   Charter Charter parties      
parties and and similar    
Similar instruments if    
Instruments gross tonnage of    
the ship, vessel or 1st 6 months Registered gross tonnage
steamer is: P1,000.00  
  In excess + P  
1,000 tons and 100.00  
below    
       
    Registered gross tonnage
  1st 6 months  
   P2,000.00  
  In excess +  
1,001 to 10,000 P200.00  
tons     
      
     Registered gross tonnage
  1st 6 months
  P3,000
   In excess + 300
 
Over 10,000 tons
198   Stamp Tax   At the same rate    
on as that imposed
Assignments on the original
and instrument.
Renewals or
Continuance
of Certain  
Instruments

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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.

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.
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.

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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

OPM-AS-APMD 2017-06-01

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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)

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Frequently Asked Questions

1) 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 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
 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.

2) Where is the Documentary Stamp Tax Declaration Return filed?

In the Authorized Agent Bank (AAB) within the territorial jurisdiction of the RDO which
has jurisdiction over the residence or principal place of business of the taxpayer or
where the property is located in case of sale of real property or where the Collection
Agent is assigned. In places where there is no Authorized Agent Bank, the return will be
filed with the Revenue Collection Officer or duly authorized City or Municipal Treasurer
where the taxpayer's residence or principal place of business is located or where the
property is located in case of sale of real property or where the Collection Agent is
assigned.

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

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

society, order, association or cooperative company, operated on the lodge
system 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
 Interbranch or interdepartmental advances within the same legal entity
 All forebearances 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
 Interbank 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   (sec. 9, RR No. 13-2004)

4) 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.

5) 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)

6) 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)

7) What are the inclusions of a 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
 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)

8) 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)