Documentary Stamp Tax on Bonds, Debt Securities, and Certificates of Deposit: The New CMEPA Rate

Documentary stamp tax (DST) on bonds, debentures, certificates of stock or indebtedness, and certificates of deposit drawing above-regular interest is currently 75% of 1% (0.75%) of the issue price or transaction value. This rate applies under the Capital Markets Efficiency Promotion Act (CMEPA, Republic Act No. 12214), effective July 1, 2025, and covers both domestically issued debt securities under Section 179 of the National Internal Revenue Code (NIRC) and bonds, debentures, or certificates issued in a foreign country under Section 176 — separate from the DST on plain loan agreements and promissory notes.

The legal basis and current rate for debt securities #

Section 179 of the NIRC taxes “all debt instruments” on original issue, and CMEPA cut that rate from 1% to 0.75% of issue price, effective for instruments issued on or after July 1, 2025. The TRAIN Law (Republic Act No. 10963), through Revenue Regulations (RR) No. 4-2018, had set the rate at ₱2.00 per ₱200 of issue price (1%) starting January 2018. CMEPA, signed May 29, 2025, reduced Section 179 alongside Sections 174 and 176, cutting the rate to ₱1.50 per ₱200 (0.75%). The BIR implemented this through RR No. 19-2025, issued August 5, 2025, applying to debt instruments issued on or after July 1, 2025.

This 0.75% rate is the same one that now applies to the original issuance of shares of stock under Section 174 — see Documentary Stamp Tax on Original Issuance of Shares of Stock for that companion equity-side rule — and to loan agreements and promissory notes under the same Section 179, covered in Documentary Stamp Tax on Loan Agreements and Promissory Notes. This post focuses on the debt-security side of Section 179 — bonds, debentures, and certificates of indebtedness or deposit — rather than plain loan contracts.

What counts as a covered debt instrument: bonds, debentures, and certificates of deposit #

Section 179 defines “debt instrument” broadly enough to sweep in bonds, debentures, certificates of indebtedness, and certificates of deposit that draw interest well above a regular savings account — not just formal loan contracts. Tax and Accounting Center, Inc.’s presentation of the provision’s definition clause reads:

“‘Debt instrument’ means instruments representing borrowing and lending transactions including… debentures, certificates of indebtedness, due bills, bonds, loan agreements, instruments and securities issued by the government or any of its instrumentalities, deposit substitute debt instruments, certificates or other evidences of deposits that are either drawing interest significantly higher than the regular savings deposit taking into consideration the size of the deposit and the risks involved or drawing interest and having a specific maturity date… promissory notes, whether negotiable or non-negotiable, except bank notes issued for circulation.”

In practice, this means an ordinary passbook savings account stays outside DST, but a special high-yield certificate of deposit — one priced to pay meaningfully more than the bank’s regular savings rate, or one carrying a fixed maturity date — is a taxable debt instrument at the same 0.75% rate as a corporate bond. A bank or issuer offering such a certificate should treat its issuance the same way it treats a bond issuance for DST purposes.

Bonds and certificates issued in a foreign country: Section 176 #

Section 176 of the NIRC is a separate, more specific provision covering bonds, debentures, and certificates of stock or indebtedness issued in a foreign country — and CMEPA sets the same 75% of 1% rate here, applied to the value of the transaction rather than face value. Where Section 179 taxes the original issue of a domestically issued debt instrument, Section 176 taxes the sale or transfer, within the Philippines, of a bond, debenture, or certificate of stock or indebtedness that was issued abroad. Tax and Accounting Center, Inc.’s summary of the CMEPA-amended provision quotes it this way:

“SEC 176. Stamp Tax on Bonds, Debentures, and Certificates of Stock or Indebtedness Issued in Foreign Countries – A documentary stamp tax of SEVENTY-FIVE PERCENT OF ONE PERCENT (75% OF 1%) of the value of the transaction shall be collected from the person selling or transferring bonds, debentures, certificates of stock, or certificates of indebtedness issued in any foreign country.”

Some practitioner summaries note that the pre-CMEPA version of this section already imposed ₱1.50 per ₱200 of face value — arithmetically the same 0.75% — so the more consequential part of the CMEPA amendment for Section 176 is recasting the tax base as the “value of the transaction” and aligning its wording with the harmonized 0.75% rate now used across Sections 174, 176, and 179. Confirm the applicable base with your tax adviser for a specific cross-border transaction, since “value of the transaction” and “face value” can diverge for instruments sold at a premium or discount.

Worked examples #

A domestic corporation issuing ₱10,000,000 in bonds owes ₱75,000 in DST — 0.75% of the ₱10,000,000 issue price — under Section 179 as amended by CMEPA.

A bank offering a ₱2,000,000 special certificate of deposit priced at a rate significantly above its regular savings rate follows the same math: 0.75% of the ₱2,000,000 certificate amount is ₱15,000 in DST, due because the certificate meets Section 179’s “drawing interest significantly higher than the regular savings deposit” test.

Instruments with an original term of less than one year are pro-rated by the fraction of the year the instrument runs — the same proration rule that applies to short-term loan agreements under Section 179, discussed in more detail in the loan agreements and promissory notes post.

One DST per instrument, not one per document #

Where a bond or debt instrument is secured by a related mortgage, pledge, or other security agreement covering the same obligation, only one DST is imposed on the transaction as a whole. This “one-DST rule” — designed to prevent stacking DST on multiple documents that evidence the same underlying debt — works the same way for bonds and debt securities as it does for loan agreements and promissory notes. See Documentary Stamp Tax on Loan Agreements and Promissory Notes for the fuller explanation of how this rule applies when a loan is secured by more than one document.

Filing: BIR Form 2000-OT, five-day deadline #

DST on a bond, debenture, certificate of indebtedness, or certificate of deposit is filed and paid using BIR Form 2000-OT within five days after the close of the month the instrument was made, signed, issued, or accepted. Liability under Section 173 of the NIRC falls on either party to the instrument — whoever makes, signs, issues, accepts, or transfers it — and that liability is effectively joint and several between the parties. If the issuer is tax-exempt, the non-exempt counterparty (for example, an investor who is not itself DST-exempt) becomes directly liable for the full tax due.

Summary #

DST on bonds, debentures, certificates of indebtedness, and certificates of deposit that draw above-regular interest is now 0.75% of issue price (₱1.50 per ₱200) under Section 179 of the NIRC as amended by CMEPA and implemented through RR No. 19-2025 — down from the TRAIN-era 1%, effective for instruments issued July 1, 2025 onward. Bonds, debentures, or certificates of stock or indebtedness issued in a foreign country fall under the separate Section 176, taxed at the same 75% of 1% rate on the value of the transaction. File on BIR Form 2000-OT within five days after month-end. For the loan-agreement and promissory-note side of this same CMEPA update, see Documentary Stamp Tax on Loan Agreements and Promissory Notes, and for the equity-side counterpart, Documentary Stamp Tax on Original Issuance of Shares of Stock.