There are things that should be considered when applying Documentary Stamp Tax (DST) on transactions. The following should be considered:
WHAT Determination of transactions that needs DST
HOW How to compute and file DST
WHEN Identification of the date the transaction has been made. This is important because the deadline of filing and payment of DST will depend on this date.
The following are the transactions that need DST:
- Sale of real property
- Loan agreements
- Lease agreements
- Mortgages
Sale of real property
Determine the selling price and fair market value of the real property. Whichever is higher between the two will be the basis for the DST computation. The amount will now be divided by P1,000 (the amount should be rounded off), then multiply it by P15.
Loan agreements
DST on loan agreements is computed as P1.00 for every P200. Thus, if the company obtained a loan in the amount of P1,000,000, the DST on the loan agreement is P5,000 (1,000,000 divided by 200).
Lease agreements
DST on lease agreement is P3.00 for the first P2,000 and additional P1.00 for every P1,000 in excess of the P2,000. Determine the following information in the lease contract:
- Monthly rent
- Number of years stated in the contract
The monthly rent will be multiplied by 12 then multiply by the number of years stated in the contract. Then subtract P2,000 and multiply by 0.001 then add P3.00
For example, the following where obtained from the lease contract:
Monthly rent | P12,000 |
Number of year stated in the contract | 5 years |
The computation will be:
Monthly rent | 12,000 |
Multiply by 12 | 12 |
Annual rent | 144,000 |
Multiply by | 5 |
Total contract amount | 720,000 |
Subtract | 2,000 |
718,000 | |
Multiply by | 0.001 |
718 | |
Plus | 3 |
DST amount | 721 |
Mortgages
Subtract P5,000 from the amount stated in the contract then divide the remaining by P5,000 (amount should be rounded off), then multiply the amount by 10 then add P20.
For example, if the mortgage is P120,000, the DST will be computed as follows:
Amount of mortgage | 120,000 |
Subtract | 5,000 |
115,000 | |
Divided by | 5,000 |
23 | |
Multiply by | 10 |
230 | |
Add | 20 |
DST amount | 250 |
Deadline for DST
DST Return (Form 2000-OT) should be filed within five (5) days after the close of the month when the taxable transaction was made. For example, if the lease contract was made and signed on July 15, 2014, the DST will be due on August 5, 2014.
Where to file and pay DST?
For sale of real property, lease agreements and mortgages, the DST should be paid on the Authorized Agent Bank (AAB) of the RDO having a jurisdiction over the place where property is located. For loan agreements, the DST should be paid and filed on the AAB of the of the RDO of the individual or company who obtained the loan.
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