Published — June 1, 2022
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Read also: TAX AMNESTY ON DELINQUENCIES
Upon the death of the decedent, succession takes place. Also, the right of the State to tax the privilege to transmit the estate vests instantly upon death.
Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time of death and on certain transfers, which are made by law as equivalent to testamentary disposition. For an heir or beneficiary to be able to transfer the decedent’s properties under his/ her name, the estate tax must first be settled. Failure to pay the estate tax on the prescribed period will subject the estate to penalty.
To give the taxpayer a reasonable tax relief for the unpaid estate taxes, Republic Act (RA) No. 11213 or the Tax Amnesty Act was passed. This however can be availed only at a limited time or until June 15, 2021.
Who May Avail?
Estate tax amnesty shall cover the estate of decedent/s who died on or before December 31, 2017, with or without assessments duly issued therefor, whose estate tax/es have remained unpaid or have accrued as of December 31, 2017.
Who Are Excluded from Availing Estate Tax Amnesty?
The Estate Tax Amnesty shall not extend to the following:
- Delinquent estate tax liabilities which have become final and executory and those covered by Tax Amnesty on Delinquencies; and
- Properties involved in cases pending in appropriate courts:
- Falling under the jurisdiction of the Presidential Commission of Good Government;
- Involving unexplained or unlawfully acquired wealth under R.A. No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, and R.A. No. 7080 or an Act Defining and Penalizing the Crime of Plunder;
- Involving violations of R.A. No. 9160, otherwise known as the Anti-Money Laundering Act, as amended;
- Involving tax evasion and other criminal offenses under Chapter II of Title X of the National International Revenue Code (NIRC) of 1997 , as amended; and
- Involving felonies of frauds, illegal exactions and transactions and malversation of public funds and property under Chapters III and IV of Title VII of the Revised Penal Code.
- Residents and Citizens – all properties, real and personal, tangible and intangible, wherever situated
- Non-resident aliens – only real and personal properties situated in the Philippines
- Listed and traded in the stock exchange – The price at the time of death or the arithmetic mean between the highest and lowest quotation at a date nearest the date of death, if none is available on the date of death itself.
- Not listed shares – The book value for common shares and par value for preferred shares as shown in the audited financial statement of the issuing corporation nearest to the date of death of the decedent.
- Certified true copy of the Death Certificate (DC)
- Taxpayer Identification Number (TIN) of decedent and heir/s
- Estate Tax Amnesty Return (ETAR)
- Estate Tax Acceptance Payment Form (APF), Revenue Official Receipt (ROR), if paid to RCO 5. Affidavit of Self Adjudication or Deed of Extra-Judicial Settlement (EJS) of the Estate of the decedent; or Court decision/judgement if the estate has been settled judicially or if there is a last will and testament
- Certification of the Barangay Captain for the last residence of the decedent and claimed Family Home, if any
What is the Rate of the Estate Tax?
An estate tax amnesty rate of six percent 6% shall be imposed on each decedent’s total net taxable estate at the time of death without penalties at every stage of transfer of property.
The minimum estate amnesty tax for the transfer of the estate of each decedent shall be Five Thousand Pesos (P5,000.00).
What Composes the Gross Estate of the Decedent?
The gross estate of a decedent, shall be comprised of the following properties and interest therein at the time of his/her death, and such lifetime transfers includible in the gross estate:
How is the Gross Estate Valued?
The properties comprising the gross estate of the decedent shall be valued, in general, based on the fair market value as of the time of death of the decedent. If the property is a real property, the fair market value shall be the higher value between the zonal value as determined by the Commissioner of Internal Revenue and the fair market value as shown in the schedule of values fixed by the provincial and city assessors.
In the case of shares of stock, the fair market value shall be:
Proprietary shares in any association, recreation or amusement club [such as golf, polo, or similar clubs) shall be valued using the bid price on the date of death or nearest to the date of death, if none is available on the date of death itself, as published in the newspaper of general circulation.
Cash in bank in local and f or foreign currency shall be based on the peso value of the balance at the date of death.
Can there be Deductions from the Gross Estate?
Yes.
For purposes of determining the Net Estate, the gross estate may be reduced by the deductions allowed by the estate tax law applicable at the time of death of the decedent.
Until When Can the Estate Tax Amnesty be Availed?
The application for estate tax amnesty shall be filed within two years from June 15, 2019 or until June 15, 2021.
What are the Mandatory Requirements?
Mandatory Requirements [Original copy and two (2) photocopies of each document]:
What is the Procedure for Availing the Estate Tax Amnesty?
The Estate Tax Amnesty Return (ETAR) shall be filed in the RDO having jurisdiction over the last residence of the decedent.
In case of a nonresident decedent, with executor or administrator in the Philippines, the return shall be filed with the RDO where such executor or administrator is registered or if not yet registered, at the executor or administrator’s legal residence.
In case of a non-resident decedent with no executor or administrator in the Philippines, the return shall be filed with RD0 No. 39- South Quezon City.
The duly accomplished and sworn ETAR, and Acceptance Payment Form (APF) (BIR Form No.0621-EA), together with the complete documents as enumerated in the ETAR, shall be presented to the concerned RDO for endorsement of the APF prior to the payment of the estate amnesty tax with the Authorized Agent Bank (AABs) or Revenue Collection Officers (RCOs). However, only the duly endorsed APF shall be presented to and received by the AAB or RCO.
After payment, the duly accomplished and sworn ETAR and APF with proof of payment, together with the complete documentary requirements shall be immediately submitted to the RDO in triplicate copies. Failure to submit the same within June 15, 2021 tantamounts to non-availment of the Estate Tax Amnesty and any payment made may be applied against the total regular estate tax due inclusive of penalties.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
All rights reserved.
SUBSCRIBE NOW FOR MORE LEGAL UPDATES!
[email-subscribers-form id=”4″]
Very much interest and very useful. Thank you and very much appreciated.
Excellent post. I was checking continuously this weblog and I’m impressed! Extremely useful info specially the final part 🙂 I deal with such info a lot. I used to be seeking this certain information for a long time. Thank you and good luck.