RMC No. 36-2020: Further clarifies the exemption from Documentary Stamp Tax of relief for qualified loans pursuant to RR No. 8-2020 and RMC No. 35-2020

Key points

1. No additional DST. Subject to Section 199(d) of the Tax Code, as amended, no additional DST is imposed under Sections 179, 195 and 198 on credit extensions, credit restructuring and micro-lending, including pawnshop loans and their extensions, during the ECQ period. The new loan principal is not subject to DST.
2. Extensions of pre-existing loans. The same treatment applies to extensions of payment and maturity periods of pre-existing loans, including salary, personal, housing and motor vehicle loans, falling due within the ECQ period. This includes maturity extensions from grace periods, whether or not the maturity originally fell within the ECQ.
3. Still subject to DST. Fresh loan availments, top-ups to existing loans and new loan drawdowns during the ECQ period, and their collateral documentation, remain subject to DST as applicable.
4. Further guidelines. The Circular gives further guidelines on the DST exemption and the reportorial requirements.

Who is affected

• Borrowers and lenders of qualified loans during the ECQ period

Deadlines and effectivity

• During the Enhanced Community Quarantine (ECQ) period