BIR Ruling No. 367-2018

REPUBLICF TH PHILIPPINES

t BUREAU OF IN TERNAL REVENUE DEPARTM NT OF FINANCE

Quezon City IDt

NIRG: E.O. 93 Sec. 173 & 184 000-00 257-3012 -9-2018 Tel Nos. 926-55-36/927-09-63 Person to Contact: Chief, Law & Legislative Division

National Food Authority Diliman, Quezon City. Philippine Sugar Center Bidg., North Avenue

Attention: Lt. Col. Jason Laureano Y. Aquino (Ret). PA NFA Administrator

Gentlemen:

This refers to your letter dated July 24, 2017 requesting on behalf of the National Food

life insurance policies issued to the Authority by the GSIS. Authority (NFA), for tax exemption on the payment of documentary stamp tax (DST) on non-

Owned and Controlled Corporation (GOCC) classified as a nonprofit or Non-Government Business Entity (GBE) heavily dependent on corporate receipts and government subsidy to pay its operating expenses and debt services. As represented, the NFA (formerly: National Grains Authority) is a Government. d

provide accessible, available, and affordable rice at government support price. NFA is mandated to provide food security and stabilization of rice supply and prices to

security/stabilization and tax expenditure subsidy on importation, and payment of net lending guaranteed by the National Government. The NFA operates at subsidized activity such as government support to food

subject to the following schedule pursuant to BIR Memorandum Order No. 79-2010 dated every insurance policy which it shall issue starting July 1, 2017. The DST shall be computed by multiplying a flat rate of 12.5% with the net premium appearing in the subject policy. For compulsory Third Party Liability, a fixed amount of PhP1 5.00 shall be due for every Certificate and Personal Accident Insurance (Optional Non-Life Insurance) coverage, the rate shall be 2017, informed the NFA that Revenue Memorandum Circular (RMC) No. 59-2008 dated non-iife insurance industries, requires the GSIS to coliect by proper billing and remit DST for of Cover issued. For the Group Personal Accident Insurance, Group Travel Accident Insurance August 23. 2008, amending RMC .30-2008, clarifying the taxability of both the life and the The Government Service Insurance System (GSIS), through a letter dated June 27.

:: 367-2018 3-8-2018

National Food Authority Page 2 of 2 2

October 14, 2010:

Amount of Insurance Tax Rate U does not exceed PhP100.000.00 exceeds PhP500,000.00 but does not exceed PhP750,000.00 exceeds PhP100,000.00 but does not exceed PhP300,000.00 exceeds PhP300,000.00 but does not exceed PhP500,000.00 PhP Exempt

exceeds PhP750,000.00 but does not exceed PhP1,000,000.00 exceeds PhP1,000,000.00

that there shall be levied, collected and paid upon documents, instruments and papers reflected on.the face of the policy, and which shall be the amount on which the DST due shall evidencing the act done or transaction had or the agreement or contract has been perfected, DST on all policies of insurance upon property. Also, Section 184 of the same Code holds that the insurance policy and the premium charged on the estimated insurance coverage, as it is be based. DST shall be based on the amount of premium charged. DST shall be due upon the issuance of In reply, please be informed that Section 173 of the Tax Code, as amended, provides

Nos. 699 and 1485, the certificates of insurance policy that will be issued by GSIS to the NFA Authority (now the NFA) stated under Presidential Decree (P.D.) No: 4, as amended by P.D) Since Executive Order No. 93 withdrew the tax privileges of the National Grains

pursuant to Section 173 in relation to Section 184 of the Tax Code, as amended. are subject to the documentary stamp tax (DST) based on the amount of premium charged

considered null and void. if upon investigation, it will be disclosed that the facts are different, then this ruling shall be This ruling is being issued on the basis of the foregoing facts as represented. However.

Very truly yours.

ARM

K-I-mcus Commissione'r of Internal Revenue CAESAR R. DULA 014154