BIR issues draft rules on estate tax amnesty

MANILA, Philippines — The Bureau of Internal Revenue (BIR) yesterday released the draft implementing rules and regulations (IRR) for the estate tax amnesty program, a measure seen to give taxpayers a one-time opportunity to clear up their estate tax liabilities.

The agency also held public consultations for the draft Revenue Regulations (RR) to clarify any concerns from stakeholders and gather suggestions that would help ensure the proper implementation of the program.

Under the draft RR, the estate tax amnesty will cover the estate of decedents who died on or before Dec. 31, 2017, whose taxes have remained unpaid or have accrued as of the same date.

However, the BIR said delinquent estate tax liabilities already covered by the ongoing tax amnesty on delinquencies, as well as properties involved in cases pending in courts cannot be covered by the amnesty program.

The draft RR states that an amnesty rate of six percent will be imposed on each decendent’s total net taxable estate at the time of death, without penalty, for every stage of the transfer of property. This is provided that the computed amnesty tax for the transfer is at least P5,000.

The BIR said interested applicants have two years from the effectivity of the regulations to file their Estate Tax Amnesty Returns (ETAR) with the Regional District Office (RDO) that have jurisdiction over the last residence of the decedent.

“In case of a non-resident 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 place of domicile,” the draft RR read.

If there is no executor or administrator, the return should be filed with RDO NO. 39- South Quezon City.

The duly accomplished and sworn ETAR, the acceptance payment form, as well as other requirements should be presented for endorsement prior to the payment of the amnesty tax.

After payment, the BIR said these documents should be immediately submitted to the RDO in triplicate copies.

“Failure to submit the same within the two-year period from the effectivity of these regulations is tantamount to non-availment and any payment may be applied against the total regular estate tax due inclusive of penalties,” the draft RR said.

The BIR said properties included in the estate tax amnesty program, which are likewise subject of taxable donation or sale would be assessed with the corresponding donor’s, capital gains, and documentary stamp taxes at the time of the donation or sale.

The BIR said the draft regulation would take effect 15 days from the date of its publication in a newspaper of general circulation or the Official Gazette.

Earlier, Internal Revenue deputy commissioner and spokesperson Marissa Cabreros said the agency is expecting to finalize and publish by May the IRR on the estate tax amnesty provisions under Republic Act 11213 or the Tax Amnesty Law.

Estimates from the Department of Finance (DOF) showed that the program is projected to capture P6.28 billion in estate tax delinquencies over the period of its implementation.