EXCISE TAX

Is a tax on the production, sale or consumption of a commodity in a country.

APPLICABILITY
On goods manufactured or produced in the Philippines for domestic sale or consumption or for any
other disposition
On goods imported

TYPES OF EXCISE TAX

Specific tax-refers to the excise tax imposed which is based on weight or volume capacity or
any other physical unit of measurement
ad valorem tax-refers to the excise tax which is based on selling price or other specified value
of the goods/articles

EXCISE TAX RATES base on RA 10351

http://www.bir.gov.ph/index.php/tax-information/excise-tax.html - concepts

DOCUMENTARY STAMP TAX

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

1) Who are required to file Documentary Stamp Tax Declaration Return?

a) In case of constructive affixture of documentary stamps, by the persons 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;

b) By using the web-based Electronic Documentary Stamp Tax (eDST) System in the
payment/remittance of its/his/her DST liabilities and the affixture of the prescribed documentary
stamp on taxable documents; and

c) By Revenue Collection Agent, for remittance of sold loose documentary stamps.

Note: Wherever one party to the taxable document enjoys exemption from the tax imposed, the other
party who is not exempt will be the one directly liable to file Documentary Stamp Tax Declaration and
pay the applicable stamp tax.

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? (sec. 9, RR No. 13-2004)

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

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 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

4) What are the implications of failure to stamp taxable documents?

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 The untaxed document will not be recorded, nor will it or any copy thereof or any record of
transfer of the same be admitted or used in evidence in court until the requisite stamp or
stamps have been affixed thereto and cancelled
No notary public or other officer authorized to administer oaths will 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? (sec. 5 (1), RR No. 7-2009)

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.

6) Is DST Law applicable on Electronic Documents? (sec. 10, RR No. 13-2004)

The DST rates as imposed under the Code, as amended by R.A. 9243 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.

7) What are the inclusions of a debt instrument? (sec. 5, RR No. 13-2004)

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.

8) Is any document, transaction or arrangement entered into under Financial Lease subject to
Documentary Stamp Tax? (RMC No. 46-2014)

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,

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transaction or arrangement entered into under financial lease is subject to DST under such Section of
the NIRC, as amended.

TAX RATES

http://www.bir.gov.ph/index.php/tax-information/documentary-stamp-tax.html

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