Professional Documents
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Taxation 2010
(2)
(3)
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Taxation 2010
CrimsonPower, JBIC, Mizuho Bank and SMBC will execute an Omnibus Agreement
which, among other documents, will include the following documents:
(1)
Prefatory Statement;
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
Moreover, within a reasonable period of time from the acquisition and take
over of management of MAPL Group of Companies, CrimsonPower or new
mortgagor/pledgor will mortgage and pledge additional assets, including the power
plant and shares of stock of MAPL and its subsidiaries; that CrimsonPower will also
obtain (or cause a member of the MAPL Group of Companies to obtain) certain
insurance and reinsurance arrangements, which will also be assigned, by way of
security, to secure the loan; that the parties shall enter into an Amended and Restated
Omnibus Agreement which will include the execution by certain members of the
MAPL Group of Companies (which would then be under the control of
CrimsonPower of (i) Sual Mortgage Agreement (Registered Land), (ii) the Sual
Mortgage Agreement (Unregistered Land); (iii) the Pagbilao Mortgage Agreement;
and, (iv) the Assignment Agreement. The Amended and Restated Omnibus will also
include the execution of the Reinsurance Assignment Agreement and the Retrocession
Copyright 1994-2011
Taxation 2010
(B)
For purposes of this section, the term debt instrument shall mean instruments
representing borrowing and lending transactions including but not limited to
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Assignment and Shareholder Loan Security Assignment executed to secure such loan,
is to be treated as covering only one (1) taxable transaction and, hence, will be subject
to only one (1) DST, in particular the rates provided under Section 179 of the Tax
Code, as amended, which is "One peso (P1.00) on each Two hundred pesos (P200), or
fractional part thereof, of the issue price of any such debt instruments."
(B) With respect to the issue of executing additional or substitute mortgage
and pledge by new mortgagor/pledgor, for as long as there is no change in the original
amount of the loan secured, the additional or substitute mortgage/pledge executed by a
new mortgagor/pledgor is not subject to DST.
In BIR Ruling No. DA-340-06 dated May 26, 2006, this Office ruled that:
"In several occasions, this office had the opportunity to rule on the
issue of novation in relation to the application of DST. Thus, in instances such
as a change of pledge or pledgors (BIR Ruling No. 188-99, dated November
29, 1999), or the mere additional collateral as supplementary security to a
contract of loan (BIR Ruling Nos. 218-90, dated November 22, 1990 &
UN-230-95, dated June 26, 1995), the original loan agreement is neither
extinguished or replaced as the same are mere additional obligations not
incompatible with the original loan, hence, no DST is payable in those
instances."
Again, in BIR Ruling No. 188-99 dated November 29, 1999, we ruled as
follows:
"In reply, please be informed that your opinion is hereby confirmed.
The execution of the proposed agreements like Substituting the Pledgors
under the New Pledge Agreement and the shares of stock under the
Agreement on Substitution of Pledged Shares without any change in the terms
and conditions of the original pledge agreement as well as the original amount
of the loan secured are not subject to the documentary stamp tax imposed
under Section 195 of the Tax Code of 1997."
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Endnotes
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Note from the Publisher: BIR Ruling No. DA-091-03 is dated March 25, 2003.
Copyright 1994-2011
Taxation 2010