RR No. 13-2004: Implements Republic Act No. 9243, otherwise known as “An Act Rationalizing the Provisions on the Documentary Stamp Tax of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes”

Summary

RR No. 13-2004 implements Republic Act No. 9243, which rationalizes the Documentary Stamp Tax (DST) provisions of the NIRC of 1997, and renumbers and amends the affected sections under Title VII.

Key points

1. Shares of stock. DST on original issue of shares is now P 1.00 on each P 200.00, or fractional part, of par value. DST on sales and transfers of shares is now P 0.75 on each P 200.00. For shares without par value, the basis is the actual consideration, or the actual value of each share when issued as stock dividends.
2. Debt instruments and bills of exchange. Debt instruments bear DST of P 1.00 on each P 200.00 of issue price, imposed only on original issue, so secondary market sales are not subject to DST. Bills of exchange and drafts within the Philippines bear P 0.30 on each P 200.00 of face value.
3. Insurance, annuities and pre-need plans. Life insurance policies stay at P 0.50 on each P 200.00, but the base is now the amount of premium collected. Annuities are P 0.50 on each P 200.00 of premium, installment payment or contract price collected, and pre-need plans are P 0.20 on each P 200.00 of premium or contribution collected.
4. Exempt instruments. Exempt items include policies of fraternal or beneficiary societies, bank deposit accounts without a fixed term, listed stocks sold through the local stock exchange for 5 years from effectivity of the Act, and fixed income securities traded in the secondary market. Certain loan agreements or promissory notes of an individual not exceeding P 250,000 for personal installment purchases are also exempt.
5. Electronic documents. The DST rates apply to documents not expressly exempted even if they are in electronic form, because Republic Act No. 8792 treats electronic documents as the functional equivalent of written ones.
6. Coverage period. Life insurance, annuities and pre-need plans are assessed only if issued on or after March 20, 2004. The Regulations apply to transactions and documents executed or issued as of March 20, 2004, the date R.A. 9243 took effect.

Deadlines and effectivity

• Effectivity of R.A. 9243: March 20, 2004
• Insurance, annuities and pre-need plans: issued on or after March 20, 2004

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.