As part of the reforms of package 1 TRAIN or RA-10963 in the Philippines, phP1.00 was increased to P1.50 for each PhP200.00 or fraction of the issue price of the loan contract or debt instrument in the Philippines. Document stamp duty (DST) is one of the most neglected taxes, as it is normally only a small percentage of a transaction, unless it is a significant amount. Temporary work is imposed on the privilege of concluding certain transactions by executing certain instruments or documents such as the sale or lease of land, the issuance or transfer of shares, loans or other forms of debt and insurance premiums, among others. Example: During the year, Company A received a business loan five times at peer intervals, and the balance of this loan is P500,000.00. Company A is responsible for P25,000 (P5M divided by P200) in each of the five credit transactions. Frequent transactions in which the DST is applied include issuing or selling shares, executing loan or debt contracts or selling and transferring real estate. The Ministry of Finance (DOF) and the Office of Internal Revenues (BIR) confirmed the stamp duty exemption (DST) during the extended community quarantine period, in order to stem the spread of COVID-19. For the sale of real estate, leases and mortgages, the DST should be paid by the DST to the Authorized Agent Bank (AAB) of the RDO, which is responsible for the location of the property. With respect to loan contracts, the DST must be paid and submitted to the RDO AAB of the person or company that received the loan. However, in the case of tax investigations, some tax inspectors are in a hurry to conduct assessments. For the TSD, loans and advances would be the current reference item on which reviewers assess this tax. Sometimes the calculation is done so quickly that they even base their calculations on the annual loan accounts or on advances to obtain a risk premium.
It is a relief that the Court of Tax Appeals (CTA) has recognized the incorrect practices or procedures that are sometimes applied during a tax investigation. In the difference in the application of the TSD, there is no fixed rate and the applicable rate would depend on the nature of the taxable transaction. Therefore, you must determine the applicable sentence by referring to the NIRC. Example: DSTs for loan contracts and initial share issuance are subject to the P1.00 DST rate for each P200 or nominal or fraction of nominal nominal value. DST on rental or rental contracts is P3.00 for the first P2,000 and P1.00 for each subsequent P1,000 of the rent under the contract. Prior to the tax reforms under the TRAIN or RA 10963, loan contracts or debt securities in the Philippines are subject to the documentary stamp tax instituted for each PhP200.00 or fraction of the issue price of the loan contract or debt instrument in the Philippines, in accordance with section 179 of the tax code as amended at the Rate of PhP1.00. Covered establishments, but not limited to banks, quasi-banks, finance companies, credit companies and other public and private financial institutions, including the GSIS, SSS and Pag-IBIG funds, present, as of 17 March 2020 (the start date of the ECQ), a summary list of all existing loans, commitments and other instruments that have benefited from the extension of payments and/or maturities. Download the summary format below. DST is a tax on the exercise of certain rights contained in a document proving these rights. As long as a right is exercised, it is possible to waive the formal documents of this exercise. An example of this is temporary work for equities, which does not necessarily require the issuance of taxable share certificates, proof of time for loan contracts that are no longer subject to a notarized loan contract.
Subject to the provisions of Section 199, Point (d) of the tax code as amended, there is no additional evidence of the time provided in sections 179, 195 and 198 of the same code regarding the aforementioned extensions.