Mon. Aug 19th, 2019

Documentary Stamp Tax under TRAIN Law 2018

There are taxes that are imposed on the documents, instruments, loan contracts and papers proving the sale or transfer of an obligation, rights or property or acceptance and assignment. These excise taxes are called as Documentary Stamp Tax (DST) in the Philippines.

There are taxes that are imposed on the documents, instruments, loan contracts and papers proving the sale or transfer of an obligation, rights or property or acceptance and assignment. These excise taxes are called as Documentary Stamp Tax (DST) in the Philippines.


Here are the updates about the documentary stamp Tax under the Republic Act No. 10963 as Tax Reform for Acceleration and Inclusion (TRAIN Law). Learn this update of TRAIN law 2018.

Shares of Stocks

The rate on the original issuance of share increased from one peso to two pesos on each two hundred pesos (200.00) of fractional part of the part value of the shares of stock.

Any sales, agreement to sell, memoranda of sales, deliveries or transfer of shares or certificates of stock has a rate of documentary stamp tax of one peso and fifty centavos (1.50) on each two hundred pesos or fractional of the par value of the stock. If the stock has no par value, the documentary stamp tax shall be equal to half (50%) of the documentary stamp paid from the original issuance of stock.

Financial Instruments

This tax on bank checks, drafts, certificates of deposits non-interest bearing, and other instruments has a rate of three pesos (3.00) per instrument. This rate has increased twice from the old dst.

One Peso and fifty centavos (1.50) dst on two hundred pesos (200.00) of debt instruments issued.

This a tax imposed of sixty centavos (.60) on every two hundred pesos or fractional part of the face value of all bills of exchange or draft. It includes any acceptance of bills of exchange and other bill of exchange or drafts based on the face value of the any such bill of exchange or draft, of the Philippine equivalent of such value if expressed in foreign currency.

Other instruments like insurance policies there is also a one-time payment of documentary stamps depending on the amount of insurance. This payment is imposed whether the insurance shall be made or renewed upon any life or lives. If the amount of insurance is one hundred thousand pesos less or less is exempted from this one-time payment of documentary stamp tax.

  • Twenty pesos (20.00) of dst imposed on amount of insurance more than 100, 000 but does not exceed 300, 000.
  • Any amount of insurance exceeds 300, 000 but does not exceed 150, 000 will be subject to fifty pesos (50.00) dst.
  • If the amount of insurance exceeds 150, 000 but does not exceed 750,000 will be subject to 100.00 dst.
  • Amount of insurance exceeds 750,000 but not exceeding 1,000,000 will be subject to one hundred pesos (150.00) of dst and if the amount of insurance exceeds 1,000,000 will be subject to documentary stamp tax of two hundred pesos (200.00).

Other Instruments

For annuities, every two hundred pesos (200.00) or fractional part of the premium or installment payment on a contract price collected except any pre-need plans are now subject to forty centavos (.40) dst.

The rate on certificates and warehouse receipts have been increased from fifteen pesos to thirty pesos of documentary stamp tax. On each bill of lading or receipts there is a two pesos dst imposed if the value of goods exceeds one hundred pesos (100.00) and does not exceed one thousand pesos (1,000.00) and twenty pesos documentary stamp tax if it exceeds one thousand pesos.

More than one-peso worth of ticket will be subject to documentary stamp of twenty centavos and additional tax of twenty centavos on every one peso or fractional part thereof on jai-alai, horse race, tickets, lotto or other authorized number game.

Contract Papers and others

Some papers are necessarily make the agreement binds or legal. Some of these are power of attorney which is subject also to documentary stamp tax of ten pesos each. Any lease and other hiring agreements are subject to six pesos documentary stamp tax for the first two thousand pesos or fractional and the additional tax is two pesos (2.00) for every one thousand pesos or fractional in excess of the first two thousand pesos (2,000.00)

Mortgage contract, pledge or deed of trust has been increased from twenty pesos (20.00) to forty pesos (40.00) when amount secured does not exceed five thousand pesos (5,000.00). It has an additional tax of twenty pesos (20.00) on each five thousand pesos after the first five thousand pesos (5,000.00).

Charter parties and similar instruments have been double. Donations of real property shall now be subject to documentary stamp tax under the amended Section 196 except those donations that are exempted by law or any special laws.

Conclusions

Therefore, after knowing some of the updates about Documentary Stamp tax under TRAIN Law 2018, you have enough knowledge to about TRAIN law 2018. These updates about documentary stamp tax in the Philippine will help us not only in computing the right amount of DST to be paid but we will know also that these DST varies depending on the type of transactions whether shares of stocks, financial instruments and others.

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