BIR rules on estate tax amnesty out this week

MANILA, Philippines — The Bureau of Internal Revenue (BIR) is planning to issue within the week the revenue regulations (RR) on its planned estate tax amnesty program, a measure which seeks to give taxpayers a one-time opportunity to clear up their estate tax liabilities.

In a statement, the BIR said stakeholders may still send their comments, inquiries and clarifications on the proposed RR for the estate tax amnesty program, which is expected to be finalized this week.

“It is expected that the final estate tax regulation will be issued within this month,” the BIR said.

The BIR last April conducted a public consultation to discuss the proposed RR on the provisions of Republic Act 11213 relative to the estate tax amnesty.

Based on the draft RR released back then, the estate tax amnesty shall 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 decedent’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.

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 will 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 will take effect 15 days from the date of the publication in a newspaper of general circulation or the Official Gazette.

According to estimates from the Department of Finance (DOF), the estate tax amnesty program is projected to capture P6.28 billion in estate tax delinquencies over the period of its implementation.

Aside from estate tax amnesty, RA 11213 also includes provisions on a tax amnesty program for delinquencies, which is already ongoing and will last until next year.