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You may have transacted with government agencies to secure certificates and other documents. And then you look at the official receipt and notice that you paid PhP30.00 for something called a “DST.” You may be wondering to yourself, what is this additional fee for?

DST stands for “Documentary Stamp Tax” which is a tax on documents, instruments, loan agreements and papers evidencing the acceptance, assignment, sale, or transfer of an obligation, right or property incident thereto. These physical documentary stamps are called “loose documentary stamps.”

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Now, you decide to visit a notary public and wonder why you are asked to pay for an additional PhP30.00 or required to affix a loose documentary stamp before your document is notarized. This is because no notary public or other office authorized to administer oaths shall add jurat or acknowledgment to any document subject to documentary stamp tax unless the proper documentary stamps are affixed thereto and cancelled. (Sec. 201, NIRC) 

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Jurat or acknowledgment are the acts of a notary public and are added to the end of notarized documents. A jurat is required for documents sworn and subscribed under oath, e.g., affidavit of loss, joint affidavit of disinterested persons, judicial affidavits, and secretary’s certificates. Acknowledgment is added for documents that require the person’s voluntariness in signing and executing documents such as special power of attorney, loan agreements, lease contracts, mortgage, pledge, deeds of trust, deeds of sale of land or motor vehicle, last will and testament, undertaking, quitclaims, and waivers.

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Certificates issued by a notary public are also subject to documentary stamp tax of Thirty pesos (P30.00) and thus a loose stamp must also be affixed thereto. (Sec. 188,NIRC)

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Not all documents that are notarized are required to be affixed with a loose documentary stamp. Those that are called One-Time Transactions (ONETT) are not to be affixed with a loose documentary stamp. These transactions include sale of parcel of land, sale of shares of stock, donation, and settlement of estate of a deceased person. Their corresponding deeds therefore are not to be affixed with a loose stamp. However, you are still required to pay a DST which is computed by the BIR.

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What if I failed to pay and affix the loose documentary stamp to a document that needs one?

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 An instrument, document or paper which is required by law to be stamped and which has been signed, issued, accepted or transferred without being duly stamped, shall not be recorded, nor shall it or any copy thereof or any record of transfer of the same be admitted or used in evidence in any court until the requisite stamp or stamps are affixed thereto and cancelled. (Sec. 201, NIRC) 

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However, the Supreme Court had the occasion to clarify that the documentary stamp may be affixed at the time the taxable document is presented in evidence. The court should allow a party’s tender of a stamp to supply the deficiency. The lack of the documentary stamp on a document does not invalidate such document. (Gabucan v. Hon. Manta, G.R. No. L-51546, 28 January 1980)

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Conclusion

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To summarize, you may be required to affix a loose documentary stamp tax on documents notarized by a notary public including copy certifications, jurat for affidavits and the like, and acknowledgment for instruments like special power of attorney. However, there are certain exceptions like deeds of absolute sale and deed of assignment of shares. 

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Disclaimer: This article is for informational purposes only and should not be considered legal advice. For specific guidance on concerns regarding notarization of documents, consult with a notary public.

‍Padin & Partners Law Offices is a full-service law firm that provides notarial services. For notarization: book an appointment or reach us at  +63 (32) 316-1540 or +63 917 188 0361.