Documentary Stamp Tax on Original Issuance of Shares of Stock: The New CMEPA Rate

Documentary stamp tax (DST) on the original issuance of shares of stock is currently 0.75% of the par value — ₱1.50 for every ₱200 (or fraction) of par value — following the Capital Markets Efficiency Promotion Act (CMEPA, Republic Act No. 12214), effective July 1, 2025. This is a genuine rate cut from the 1% (₱2.00 per ₱200) that applied under the TRAIN Law from 2018 through June 2025, and a corporation issuing new shares today needs the current figure, not the older one still repeated in many older guides.

The legal basis and rate history #

Section 174 of the National Internal Revenue Code (NIRC) imposes DST on every original issue of shares of stock, and the rate has changed twice in recent years — first up, then down. Before the TRAIN Law, the rate stood at ₱1.00 per ₱200 of par value (0.5%). The TRAIN Law (Republic Act No. 10963), implemented through Revenue Regulations (RR) No. 4-2018, doubled that to ₱2.00 per ₱200 (1%), effective January 2018. CMEPA (Republic Act No. 12214), signed May 29, 2025, reduced the rate again to ₱1.50 per ₱200 of par value — 0.75% — and the BIR implemented this through RR No. 19-2025, issued August 5, 2025, covering documents made on or after July 1, 2025.

No-par-value shares #

For shares issued without a stated par value, DST is computed on the actual consideration or value received for the shares, not on a par-value formula. A stock dividend follows the same principle — DST attaches to the actual value the dividend shares represent per share, applying the same 0.75% rate to that value.

Don’t confuse this with DST on a share sale #

Section 175 of the NIRC — DST on the sale or transfer of shares already issued — carries the same 0.75% nominal rate today, but arrived there through a different history and CMEPA did not touch it. Pre-TRAIN, secondary share transfers were taxed at ₱0.75 per ₱200; TRAIN doubled that to ₱1.50 per ₱200 (0.75%), and CMEPA left that figure unchanged. The two sections now land on the same 0.75% number by coincidence of separate legislative paths — Section 174 applies when a corporation issues new shares, Section 175 applies when an existing shareholder sells or transfers shares already outstanding. CMEPA’s more visible change to secondary trading was adding a new DST exemption for shares listed and traded through a local or foreign stock exchange, and cutting the separate stock transaction tax on Philippine Stock Exchange trades from 0.6% to 0.1% — neither of which touches an unlisted corporation’s original share issuance.

Worked example #

A newly incorporated company issues 1,000,000 shares with a par value of ₱1.00 each, for total par value of ₱1,000,000, after July 1, 2025.

Had the same issuance happened before July 1, 2025, the same ₱1,000,000 par value would have carried DST of ₱10,000 at the 1% TRAIN-era rate — a ₱2,500 difference on this issuance alone.

Who files, and when #

The issuing corporation is responsible for DST compliance on its own share issuance, filed on BIR Form 2000-OT within five days after the close of the month the shares were issued. Under Section 173 of the NIRC, DST liability generally falls on whoever makes, signs, issues, or accepts the taxable document — for an original share issuance, that is the corporation itself. Form 2000-OT covers one-time transactions such as a company’s initial or a later capital-raising share issuance, distinct from BIR Form 2000, which recurring DST filers use for regular monthly transactions. Confirm the correct form variant with your RDO or tax adviser if your corporation issues shares on a recurring basis.

A narrow exemption for reorganizations #

Shares issued in exchange for property under a tax-free reorganization or merger under Section 40(C)(2) of the NIRC are generally exempt from DST under Section 199(m), with one carve-out. The exemption does not extend to shares originally issued in exchange for real property — that specific exchange stays subject to DST even within an otherwise tax-free reorganization. No prior BIR ruling is required to claim this exemption, but the transaction remains subject to review on audit, so documentation showing the exchange meets Section 40(C)(2)’s requirements should be kept on file.

Summary #

DST on an original share issuance is currently 0.75% of par value (₱1.50 per ₱200), cut from the TRAIN-era 1% by CMEPA effective July 1, 2025 and implemented through RR No. 19-2025 — a change worth flagging to any corporation still budgeting at the old rate. File on BIR Form 2000-OT within five days after the month of issuance. For the related tax on debt instruments a company issues instead of equity, see Documentary Stamp Tax on Loan Agreements and Promissory Notes, and for the broader DST framework, Documentary Stamp Tax: What It Is and When BIR Form 2000 Applies.