Estate Tax Amnesty
- KVG
- Apr 23, 2020
- 6 min read
Republic Act No. 11213 or the “Tax Amnesty Act’’ covers Estate Tax Amnesty. The Tax Amnesty Act aims to provide a one-time opportunity to settle estate tax obligations through an estate tax amnesty program that will give reasonable tax relief to estates with deficiency estate taxes.
Estate Tax Amnesty covers the estate of decedents who died on or before 31 December 2017, with or without assessments duly issued therefor, whose estate taxes have remained unpaid or have accrued as of 31 December 2017.[1]
However, Estate Tax Amnesty shall not extend to estate tax cases which shall have become final and executory and to properties involved in cases pending in appropriate courts:[2]
(a) Falling under the jurisdiction of the Presidential Commission on Good Government;
(b) Involving unexplained or unlawfully acquired wealth under Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, and Republic Act No. 7080 or An Act Defining and Penalizing the Crime of Plunder;
(c) Involving violations of Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act, as amended;
(d) Involving tax evasion and other criminal offenses under Chapter II of Title X of the National Internal Revenue Code of 1997, as amended; and
(e) 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.
Under the Estate Tax Amnesty, the estate shall pay the estate tax at the rate of six percent (6%) based on the decedent’s total net estate at the time of death. If an estate tax return was previously filed with the Bureau of Internal Revenue (BIR), the estate tax rate of six percent (6%) shall be based on the net undeclared estate.
If the allowable deductions applicable at the time of death of the decedent exceed the value of the gross estate, the heirs, executors, or administrators may avail of the benefits of tax amnesty, and pay the minimum estate amnesty tax of Five thousand pesos (₱5,000).[3]
The Estate Tax Amnesty may be availed within two (2) years from the effectivity of the Implementing Rules and Regulations of the Tax Amnesty Act or starting 15 June 2019, when Revenue Regulation No. 6-2019 takes effect. The sworn Estate Tax Amnesty Return (BIR Form 2118-EA) should be filed by the executor or administrator of the estate, or if there is no executor or administrator appointed, the legal heirs, transferees or beneficiaries with the Revenue District Office of the BIR which has jurisdiction over the last residence of the decedent. For nonresident decedents, the Estate Tax Amnesty Return shall be filed and the corresponding amnesty tax be paid at Revenue District Office No. 39, or any other Revenue District Office which shall be indicated in the Implementing Rules and Regulations.
The appropriate Revenue District Officer shall issue and endorse an acceptance payment form, in such form as may be prescribed in the Implementing Rules and Regulations for the authorized agent bank, or in the absence thereof, the revenue collection agent or municipal treasurer concerned, to accept the tax amnesty payment. Proof of settlement of the estate, whether judicial or extrajudicial, shall likewise be attached to said return in order to verify the mode of transfer and the proper recipients.
The availment of the Estate Tax Amnesty and the issuance of the corresponding Acceptance Payment Form do not imply any admission of criminal, civil or administrative liability on the part of the availing estate.[4]
The Estate Tax Amnesty Returns shall be conclusively presumed as true, correct, and final upon filing thereof, and shall be deemed complete upon full payment of the amount due.
The Acceptance Payment Form, and the Estate Tax Amnesty Return shall be submitted to the Revenue District Office after complete payment. The completion of the requirements shall be deemed full compliance with the provisions of the Tax Amnesty Act. A Certificate of Availment of the Estate Tax Amnesty shall be issued by the BIR within fifteen (15) calendar days from submission to the BIR of the Acceptance Payment Form and the Estate Tax Amnesty Return. Otherwise, the duplicate copies of the Acceptance Payment Form, stamped as received, and the Estate Tax Amnesty Return shall be deemed as sufficient proof of availment.[5]
One (1) electronic Certificate Authorizing Registration (eCAR) shall be issued per real property including the improvements, if any, covered by Original Certificate of Title/Transfer Certificate of Title/Condominium Certificate of Title or Tax Declaration for untitled properties. For personal properties included in the estate, a separate eCAR shall be issued.
Concerned personnel who have been found remiss in their responsibilities in ensuring compliance with the policies and procedures prescribed in the Regulations shall be imposed with the applicable administrative sanctions as provided under existing policies.[6]
Estates covered by the Estate Tax Amnesty, which have fully complied with all the conditions set forth, including the payment of the estate amnesty tax shall be immune from the payment of all estate taxes, as well as any increments and additions thereto, arising from the failure to pay any and all estate taxes for the taxable year 2017 and prior years, and from all appurtenant civil, criminal, and administrative cases and penalties under the National Internal Revenue Code of 1997, as amended.[7]
The following are the mandatory requirements:[8] (Original copy and two (2) photocopies of each document)
1. A Certified true copy of the Death Certificate; 2. Taxpayer Identification Number (TIN) of the decedent and heir/s;
3. Estate Tax Amnesty Return; 4. Estate Tax Acceptance Payment Form (APF), Revenue Official Receipt (ROR), if paid to Revenue Collection Officer; 5. Affidavit of Self Adjudication or Deed of Extra-Judicial Settlement (EJS) of the Estate of the decedent; or Court decision/judgment if the estate has been settled judicially or if there is a last will and testament; 6. Certification of the Barangay Captain for the last residence of the decedent and claimed Family Home, if any; 7. For "Claims Against the Estate" arising from Contract of Loan, Notarized Promissory Note, if applicable; 8. Proof of the claimed "Property Previously Taxed", if any; 9. Proof of the claimed "Transfer for Public Use", if any; and 10. At least one (1) valid government ID of the executor/administrator of the estate, or if there is no executor or administrator appointed, the heirs, transferees, beneficiaries or authorized representative. For Real Property/ies, if any: (Original copy and two (2) photocopies of each document)
1. Certified true copy/ies of the Transfer/Original/Condominium Certificate/s of Title of real property/ies;
2. Certified true copy of the Tax Declaration of real property/ies, including the improvements at the time of death or the succeeding available tax declaration issued nearest to the time of death of the decedent, if none is available at the time of death; and
3. Where declared property/ies has/have no improvement, Certificate of No Improvement issued by the Assessor's Office at the time of death of the decedent;
For Personal Property/ies, if any: (Original copy and two (2) photocopies of each document)
1. Certificate of Deposit/Investment/Indebtedness owned by the decedent alone, or decedent and the surviving spouse, or decedent jointly with others; 2. Certificate of Registration of vehicle/s and other proofs showing the correct value of the same; 3. Certificate of stocks; 4. Proof of valuation of shares of stock at the time of death:
a. For shares of stock listed/traded – 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. b. For shares of stock not listed/not traded – 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 with computation of the book value per share. c. For proprietary shares – 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. 5. Proof of valuation of other types of personal property. Other Requirements, if applicable: (Original copy and two (2) photocopies of each document)
· If the person transacting/processing the transfer is the authorized representative, duly Notarized Original Special Power of Attorney (SPA) and/or, if one of the heirs is designated as executor/administrator, a sworn statement.
· If document is executed abroad, Certification from the Philippine Consulate. · If zonal value cannot be readily determined from the documents submitted, Location Plan/Vicinity map.
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