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  • MTF UPDATES – BIR RMC No. 36-2020

MTF UPDATES – BIR RMC No. 36-2020

Dear Valued Clients and Friends,

We are sending to you a copy of Bureau of Internal Revenue (BIR) Revenue Memorandum Circular (RMC) No. 36-2020 dated April 6, 2020, entitled “Further Clarification on the Exemption from Documentary StampTax (DST) Relief for Qualified Loans pursuant to Revenue Regulations No. 8-2020 dated April 1, 2020 and Revenue Memorandum Circular No. 35-2020 dated April 2, 2020.”

There shall be no additional DST on credit extensions and restructuring, micro-lending, including those obtained from pawnshops and extensions thereof during the Enhanced Community Quarantine (ECQ) period. The new loan principal shall not be subject to DST.

The same tax treatment shall apply to all extensions of payment and/or maturity periods of all pre-existing loans.

Credit extensions shall mean:

  1. Pre-existing loans that fall due during the ECQ period where interest is paid but the principal is converted into a new loan with a new maturity date;
  2. Pre-existing loans that fall due during the ECQ period where interest is paid but the principal is rolled over or renewed as a new loan principal.

Credit restructuring shall mean:

  1. Pre-existing loans that fall due during the ECQ period where both the principal and the interests are not paid but are consolidated and converted into a new loan principal with a new maturity date;
  2. Pre-existing loans that fall due during the ECQ period where there is payment of interest and partial payment of principal while the remaining unpaid principal is converted into a new loan principal with a new maturity date

Covered institutions shall submit a summary listing of all pre-existing loans, pledges, and other instruments which were granted extension of payment and/or maturity periods.

Moreover, fresh loan availments, top-up to existing loans, and new loan drawdowns during the ECQ Period and its collateral documentation remain subject to DST.

 BIR RMC 36-2020

Contact Information

Our office address:

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Salcedo Village, Makati City 1227 Philippines

Telefax: +632 831-1297

Telephone: +632 808-5375 • +632 815-0069

Email: info@mtfcounsel.com

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Euney Marie J. Mata-Perez
euney.mata-perez@mtfcounsel.com

Mark Anthony P. Tamayo
mark.tamayo@mtfcounsel.com

Gerardo Maximo V. Francisco
gary.francisco@mtfcounsel.com