If you’re among the many Filipinos who have outstanding estate tax liabilities that are yet to be settled, it’s noteworthy to be aware of the new BIR Ruling called Estate Tax Amnesty, which as a concerned taxpayer, you can avail of its benefits.
Under the Republic Act (RA) No. 11213 or the Tax Amnesty Act, it comprises provisions on Estate Tax Amnesty and Tax Amnesty on Delinquencies.
The Estate Tax Amnesty “covers the estate of the decedents who died on or before December 31, 2017, with or without assessments duly issued therefor, whose estate taxes have remained unpaid or have accrued as of December 31, 2017.” However, this act doesn’t apply to tax cases that have become final and executory and properties involved in cases pending in appropriate courts.
Estate tax liabilities will considerably decrease as penalties, surcharges, and interest arising from transferring the title of the decedent’s property to the heir/s will be relinquished by the government once a taxpayer avails of the Estate Tax Amnesty.
Taxpayers who avail of such amnesty shall be immune from the payment of all estate taxes as well as any increments and additions as a result of nonpayment of estate taxes for years before and up to the taxable year 2017, pertinent civil, criminal and administrative cases and penalties under the 1997 Tax Code.
An executor, administrator, or authorized representative of estates who want to avail of the Estate Tax Amnesty can file the return (ETAR or BIR Form 2118-EA) in triplicate copies along with the necessary documentary requirements with the Revenue District Office that has the jurisdiction over the most recent residence of the decedent. For non-resident decedent without executor or administrator in the Philippines, the return shall be filed with RDO 39-South Quezon City.
The estate tax rate of six percent shall be imposed on each decedent’s total net taxable estate at the time of death without penalties at all stages of property transfer. However, an amount of Five Thousand Pesos (P5,000) shall be the minimum estate amnesty tax for the transfer of the estate of each decedent.
- 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
For real properties, the basis will be whichever is higher 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.
For shares of stocks listed and traded in the Stock Exchange, the fair market value shall the “price of the shares at the time of death the arithmetic mean between the highest and lowest quotation at the date nearest the date of death, if none is available on date of death itself.”
For shares of stocks not listed, the price shall be the book value for common shares and par value for preferred shares presented in the audited financial statement of the issuing corporation closest to the date of the decedent’s death.
For proprietary shares in any association, recreation, or amusement club, the basis of valuation shall be the bid value on the date of death or nearest to the date of death; if it’s unavailable on the very time of death, as published in the newspaper of general circulation.
The cash in the bank in local and/or foreign currency shall be valued at the peso currency at the time of the death of the decedent.
In case of undeclared properties in the previously filed return, the legal heirs, executors, or administrators of the estate can file an ETAR or a modified ETAR, whichever is appropriate, and pay the estate amnesty tax, with no penalties, based on the net taxable cost of the Net Undeclared Estate in two (2) years from the effectivity of these rules. If declared after the two-year period, the said properties shall already be imposed with applicable estate tax rate valid at the time of death, together with interest and penalties.
Submit an original copy as well as two photocopies of the following documents:
- Certified true copy of the Death Certificate (DC);
- Taxpayer Identification Number (TIN) of the decedent and heir/s;
- Estate Tax Amnesty Return (ETAR);
- Estate Tax Acceptance Payment Form (APF), Revenue Official Receipt (ROR), if paid to RCO;
- 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;
- Certification of the Barangay Captain for the last residence of the decedent and claimed Family Home, if any;
- For “Claims Against the Estate” arising from Contract of Loan, Notarized Promissory Note, if applicable;
- Proof of the claimed “Property Previously Taxed”, if any;
- Proof of the claimed “Transfer for Public Use”, if any; and
- At least one valid government ID of the executor or 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:
- Certified true copy/ies of the Transfer/Original/Condominium Certificate/s of Title of real property/ies;
- 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
- 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:
- Certificate of Deposit/Investment/Indebtedness owned by the decedent alone, or decedent and the surviving spouse, or decedent jointly with others;
- Certificate of Registration of vehicle/s and other proofs showing the correct value of the same;
- Certificate of stocks;
- Proof of valuation of shares of stock at the time of death;
- Proof of valuation of other types of personal property.
The Certificate of Availment of the Estate Tax Amnesty shall be issued by the assigned RDO within 15 days after receipt of the application and necessary documentary requirements.
Do away from unnecessary troublesome in legal processing, IDO Consultancy and Business Process, Inc. can assist, handle, and process your Estate Tax Settlement and Transfer of Property Title. With our team of well-experienced professionals, rest assured all estate tax obligations are fully settled before the transfer of title of inherited Philippine properties to the heirs. You can already have the peace of mind that your inherited property is legally under your name.
For professional assistance, you may contact us at +63 2 8810 9690, visit our office at Unit 2504 Cityland Herrera Tower, Valero Cor. VA Rufino St., Salcedo Village, Makati City, or get in touch here.