BIR clarifies process on estate taxes

MANILA, Philippines – The Bureau of Internal Revenue (BIR) has clarified the procedures for the payment of estate taxes and release of compensation in lands covered by the Comprehensive Agrarian Reform Program (CARP).

The tax agency said it received complaints related to the implementation of joint Administrative Order (AO) 1, Series of 2013 of the departments of Finance, Agrarian Reform and Justice and Land Bank of the Philippines.

Under AO 1, the BIR shall collect excise taxes from the compensation to be given to the kin of the deceased landowners of CARP-covered areas.

Heirs of the lands are given compensation by Landbank, which would first deduct the estate tax due to be remitted directly to the BIR.

Under the law, CARP landholdings are exempted from surcharges and interests that will result from late estate tax payments. 

CARP is the government’s program intended to give farmers their own land to till.

“The Revenue District Office (RDO) having jurisdiction on the residence of the deceased landowner...shall receive from the DAR Provincial Office a list of CARP-covered landholdings,” the BIR said.

Within five days from the receipt of the list, the RDO is tasked to estimate the gross estate and the taxes of the covered are based on the law’s provisions.

According to the BIR, other documents may be required from the heirs by the RDO, through the Landbank, if needed for proper estimation.

“From the receipt of other required documents, the RDO shall compute and ascertain the estate tax liability within three working days,” the BIR said.