BIR Ruling No. 455-2020

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OF INTERNAL REVENUE

Quezon City

BIRRuling No.143-10 Section 188,NIRC,as amended T-0455-2020

DEPARTMENT OF EDUCATION

Region IV-A CALABARZON

Schools Division of Rizal

Date: AUG 1 8 2020

Attention: CHERRYLOU D. REPIA,CESO V

Schools Division Superintendent

Gentlemen:

This refers to your letter requesting legal opinion with regard to the imposition of

documentary stamp tax (DST) on various school credentials such as Diploma, Form 137.

Certification, Authentication and Verification (CAV) and other school records. In particular,

you seek an opinion whether or not such school records may be exempted from the DST and,

if not, that the imposition of the same be deferred until the enhanced community quarantine

(ECQ) period is fully lifted.

It was represented that the Department of Educationis anticipating the closing of

the school year 2019-2020; that the new graduates and transferee-students from various

schools will be requesting for the school credentials such as Diploma, Form 137,

Certification, Authentication and Verification (CAV) and otherschool records; that as part of

the collection drive of the Government, schools under your juri$diction are advised to require

those who requested the aforesaid records to affix DST for every issuance of records or

certificates before the release of the same; that being under the ECQ, you are cognizant of the

fact that most of your students are saddled with financial constraints and, more often than not.

their parents are prioritizing to buy food to sustain their daily living; and that it is your

opinion that failure to affix the required stamp on a taxable document shall not invalidate the

same but will have the effect of non-recording of documents in the government registry,

inadmissibility thereof as evidence in any courts and no notary[or other officer authorized to

administer oaths shall add his jurat or acknowledgement to the document until the required

stamp is affixed thereto and cancelled.

In reply, please be informed that the issue on the imposition of the DST on school records, such as Diploma, Form 137, Certification, Authentication and Verification (CAV)

and other school records issued for the purpose of giving information or establishing a proof

of a fact, is already settled. Section 188 of the 1997 Tax Code, as amended, provides, to wit:

or otherwise, and on every certificate or document issued by any "SEC.188.Stamp Tax on Certificates.-On each certificate of damages

Department of Education Region IV-A CALABARZON OT-655-2020 AUG 1 8 2020

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customs officer, marine surveyor, or other person acting as such, and shall be collected a documentary stamp tax of Thirty pesos (P30.00). (Underscoring supplied) on each certificate issued by a notary public, and on each certificate of any description required by law or by rules or regulations of a public office, or which is issued for the purpose of giving information, or establishing proof of a fact, and not otherwise specified herein, there

Clearly, school records, such as Diploma, Form 137, Certification, Authentication and Verification (CAV), are documents which are issued by the school to give information or to establish proof of a fact and, thus, fall within the ambit of Section 188 of the 1997 Tax Code.

as amended.

Relative to the above, the BIR has issued Revenue Regulations (RR) No. 9-2000 identifying the persons liable for the DST and the mode of payment/remittance of the said tax

under certain conditions. As enunciated in the aforesaid Regulations, the DST is a tax

or facility evidencing the aforesaid transactions. However, whenever one of the parties to the imposed against the person making, signing, issuing, accepting or transferring the document

taxable document is exempt from the DST. the other party who is not exempt shall be the'one

directly liable for the said tax. This was further clarified in Revenue Memorandum Circular (RMC) No. 25-2008 particularly with regard to the obligation of educational institutions to

remit the DST in respect of issuance of taxable certificates such as Diploma, Transcript of Records and other taxable certificates. Said RMC provides, to wit:

"Sec. 3 Mode of Payment and Remittance of Tax.

XXX XXXXXX

(4) When one of the parties to taxable document or transaction

is included in any of the entities enumerated below, such entity shall be responsible for the remittanceof the stamp tax

prescribed under Title VII of the Code: Provided, however, that if such entity is exempt from tax herein imposed, it shall remit

the tax as a collecting agent, pursuant to the preceding paragraph 3 (b) (2) hereof, any provision of these Regulations to the contrary notwithstanding:

XXX XXX XXX

(e) An educational institution in respect of issuance of taxable certificates (e.g. Diploma, Transcript of Records, and other documents taxable as certificates under Section 188 of the Code);

In BIR Ruling No. 143-2010, we had the occasion to rule that notwithstanding the tax

exemption of educational institutions, they are"collectingagents" for the BIR for the

purpose of remitting to the BIR the DST on diplomas and transcript of records, issued by

them in favor of non-exempt persons or entities, and that should they fail to remit the DST on

1 As amended by Republic Act No. 10963 or the TRAIN Law

Department of Education Region IV-A CALABARZON Page 3 of 3 OT-0455-2020 AUG 1 8 2020

diplomas and transcripts of record to the BIR as such "collecting agents", the educational institutions shall be held personally liable for the DST.

been lifted by the Government, please take note of RR No. 7-2020, as amended by RR No. 30-2020, which provides for the extension of statutory deadlihes and timelines for the filing and submission of any documents and the payment of taxes Huring the ECQ period. Under the said Regulations, the filing of DST returns and the payment of the taxes due thereon for Anent your request for the deferment of the payment of the DST until the ECQ has

transactions for the month of March which falls due on April 5, 2020 has been extended until May 20, 2020. The Regulations further provides that if theECQ period will be extended further, then the filing of the returns and payment of the corresponding taxes due thereon shall also be extended by thirty (30) calendar days from the lifting of the ECQ.

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

shall be considered null and void.

Very truly yours,

CAESAR R. DULAY

Commissioner of Internal Revenue

036081

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