BUSINESS AND TRANSFER TAXATION 6th Edition (BY: VALENCIA & ROXAS)

SUGGESTED ANSWERS
Chapter 16: DOCUMENTARY STAMP TAXES

CHAPTER 16
DOCUMENTARY STAMP TAXES

Problem 16 – 1
1. True
2. True
3. False – the transaction.
4. False – to be taxed against the party who is not exempt.
5. True
6. False – 10 days from the close of the month
7. True
8. True
9. True
10. True

Problem 16 – 2 B
Documentary stamp tax to be paid (P1,000/P200) x P10 x P2 P 100

Problem 16 – 3 A
Documentary stamp tax to be paid ($5,000 x P40/P200) x P0.30 P 300

Problem 16 – 4 B
DST on first P5,000 P 20
DST on excess of the first P5,000 = (P395,000/P5,000) x P10 790
Total documentary stamp tax P810

Problem 16 – 5 C
Documentary stamp tax (P800,000/P1,000) x P15 P12,000

Problem 16 – 6 D
DST on first P2,000 P 3
DST on excess of the first P2,000 = (P142,000/P1,000) x P1 142
Total P145
Multiply by 2
Total documentary stamp tax P290

Problem 16 – 7
Face value of the bonds P50,000
Divide by 200
250
Multiply by documentary stamp tax P 1.50
Documentary stamp tax P 375

Problem 16 – 8
Par value of the stock (P100 x 1,000 shares) P100,000
Divide by 200
500
Multiply by documentary stamp tax P 2.00
Documentary stamp tax P 1,000

Problem 16 – 9
Par value (P100 x 100 shares) P10,000
Divide by value 200
50
Multiply by documentary stamp tax P 1.50
Documentary stamp tax P 75
Problem 16 – 10
Face value of document P100,000
Divide by 200
500
Multiply by documentary stamp tax rate P 0.30
Documentary stamp tax P 150

Problem 16 – 11
Face value of document (P50 x $5,000) P250,000
Divide by 200
1,250
Multiply by documentary stamp tax rate P 0.30
Documentary stamp tax P 375

Problem 16 – 12
Insurance policy P1,000,000
Divide by 200
5,000
Multiply by documentary stamp tax rate P 0.50
Documentary stamp tax P 2,500

Problem 16 – 13
Annual insurance premium P 5,000
Divide by 4
1,250
Multiply by documentary stamp tax rate P 0.50
Documentary stamp tax P 625

Problem 16 – 14

The documentary stamp tax on the affidavit of loss is P15.00.

Problem 16 – 15

The documentary stamp tax would be P10.00.

Problem 16 – 16
Sales price P1,000,000
Less: Unpaid mortgage balance 200,000
Balance P 800,000
Less: Amount not subject to DST 1,000
Balance P 799,000
Divide by P 1,000
799
Multiply by P 15
Documentary stamp tax P 11,985
Add: DST for the first P1,000 15
Total documentary stamp tax P 12,000

Problem 16 – 17
Documentary stamp (P1,000,000/ P1,000) x 15 P15,000
Surcharge (P15,000 x 25%) 3,750
Interest (from June 25 to July 25) (P15,000 x 20%) 250
Total payable P19,000

Problem 16 – 18
a. P – 0 –
b. P – 0 –

See page 503 of the textbook. Deeds of property donated to the government are exempt from
documentary stamp tax.