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Here are select February 2013 rulings of the Supreme Court of the Philippines on tax law:  National Internal Revenue Code; documentary stamp tax; issuance of promissory notes; persons liable for the payment of DST; acceptance. Under Section 173 of the National Internal Revenue Code, the persons primarily liable for the payment of DST are the persons (1) making; (2) signing; (3) issuing; (4) accepting; or (5) transferring the taxable documents, instruments or papers. Should these parties be exempted from paying tax, the other party who is not exempt would then be liable. In this case, petitioner Philacor is engaged in the business of retail financing. Through retail financing, a prospective buyer of home appliance may purchase an appliance on installment by executing a unilateral promissory note in favor of the appliance dealer, and the same promissory note is assigned by the appliance dealer to Philacor. Thus, under this arrangement, Philacor did not make, sign, issue, accept or transfer the promissory notes. It is the buyer of the appliances who made, signed and issued the documents subject to tax while it is the appliance dealer who transferred these documents to Philacor which likewise indisputably received or “accepted” them. Acceptance, however, is an act that is not even applicable to promissory notes, but only to bills of exchange. Under the Negotiable Instruments Law, the act of acceptance refers solely to bills of exchange. In a ruling adopted by the Bureau of Internal Revenue as early as 1995, “acceptance” has been defined as having reference to incoming foreign bills of exchange which are accepted in the Philippines by the drawees thereof, and not as referring to the common usage of the word as in receiving. Thus, a party to a taxable transaction who “accepts” any documents or instruments in the plain and ordinary meaning does not become primarily liable for the tax. Philacor... 

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