Estate tax amnesty
Death and taxes. This pretty much sums up Revenue Regulations (RR) 6-2019, issued by the Department of Finance and the Bureau of Internal Revenue (BIR), implementing the estate tax amnesty provisions of Republic Act (RA) 11213, the “Tax Amnesty Act of 2019” or Tax Amnesty Act. The regulations take effect fifteen days from the date of its publication, which will be on June 15, 2019. The regulation’s date of effectivity is crucial, as the estate tax amnesty may be availed of by taxpayers within two years from June 15, 2019.
Under RR 6-2019, taxpayers are given a one-time opportunity to settle estate tax obligations through an estate tax amnesty program that will give reasonable tax relief to estates with outstanding estate tax liabilities.
Who are covered by the estate tax amnesty program? These are the estate of decedents who died on or before Dec. 31,2017, with or without tax assessments issued, whose estate taxes remain unpaid as of Dec. 31, 2017. The regulations, however, provide for exceptions to the coverage:
– Estates with delinquent estate tax liabilities which have become final and executory and those covered by the Tax Amnesty on Delinquencies
– Properties involved in cases pending in appropriate courts
– Falling under the jurisdiction of the Presidential Commission of Good Government
– Involving unexplained or unlawfully acquired wealth under the Anti-Graft and Corrupt Practices Act and other related laws
– Involving violations of the Anti-Money Laundering Act
– Involving tax evasion and other similar offenses under the Tax Code
– Involving felonies of frauds, illegal exactions, and malversation of public funds and property.
The estate amnesty tax rate is 6 percent, imposed on the decedent’s total net taxable estate at the time of death without penalties at every stage of transfer of property. Note that the minimum estate amnesty tax for each decedent shall be P5,000.
In this regard, “gross estate” under the regulations is defined as all properties and interests in properties of the decedent at the time of his death as well as properties he transferred during his lifetime. On the other hand, “net estate” refers to the gross estate less all allowable deductions as provided in the Tax Code. The allowable deductions have been conveniently enumerated in the regulations (as Annex “A”), for ease of reference.
As to the procedure for availing of the estate tax amnesty, an Estate Tax Amnesty Return (ETAR) shall be filed by either the executor, legal heirs, or beneficiaries with the BIR Revenue District Office (RDO) having jurisdiction over the last residence of the decedent. In case a nonresident decedent, the ETAR shall be filed with the RDO where the executor is registered, or at the executor’s legal residence.
The duly accomplished and sworn ETAR, Acceptance Payment Form (APF), and the complete documents as enumerated in the ETAR, shall be presented to the concerned RDO for endorsement of the APF prior to the payment of the estate amnesty tax with the appropriate BIR authorized agent bank (AAB). Note that only a duly endorsed APF will be received by the AAB for purposes of payment of the amnesty tax.
After payment, the ETAR, APF, proof of payment and the complete documentary requirements shall be submitted to the RDO in triplicate copies. Afterwards, a “Certificate of Availment of the Estate Tax Amnesty” shall be issued by the concerned RDO within fifteen calendar days from the receipt of the ETAR with the accompanying documents discussed above.
