Estate Tax Amnesty – Implementing Rules and Regulations

On 30 May 2019, the Bureau of Internal Revenue (BIR) released Revenue Regulations No. 6-2019 (RR No. 6-2019) or the Implementing Rules and Regulations (IRRs) of the Estate Tax Amnesty.

Who are covered by the Estate Tax Amnesty?

The IRR of Estate Tax Amnesty covers the estate of decedents who died on or before 31 December 2017 and whose estate tax has remained unpaid, with or without assessment, except:

1. Delinquent estate tax liabilities which have become final and executory and those covered by Tax Amnesty on Delinquencies; and
2. Properties involved in cases pending in appropriate courts: a. Falling under the jurisdiction of the Presidential Commission of Good Government; b. Involving unexplained or unlawfully acquired wealth under R.A. No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, and R.A. No. 7080 or an Act Defining and Penalizing the Crime of Plunder; c. Involving violations of R.A. No. 9160, otherwise known as the Anti-Money Laundering Act, as amended; d. Involving tax evasion and other criminal offenses under Chapter II of Title X of the National Internal Revenue Code (NIRC) of 1997, as amended; and e. Involving felonies of frauds, illegal exactions and transactions and malversation of public funds and property under Chapters III and IV of Title VIII of the Revised Penal Code

What is the Estate Tax Amnesty rate?

The estate tax amnesty rate is six percent (6%) of the Net Taxable Estate (gross estate less allowable deductions under the applicable estate tax law prevailing at the time of death of the decedent) without penalties at every stage of transfer of properties; provided, that the minimum estate tax liability shall be Five Thousand Pesos (P5,000.00).

In case the estate excluded properties from a previously filed return, the rate will be based on the net taxable value of the undeclared properties and not on the Net Taxable Estate.

The provisions of the Tax Code as amended by TRAIN Law, or the applicable estate tax laws prevailing at the time of death shall apply suppletorily in the determination of valuation, manner of computation (of Net Taxable Estate, Gross Taxable Estate, Net Undeclared Estate etc.), and other related matters.

How can I avail myself of the Estate Tax Amnesty?

The Estate Tax Amnesty is available for a period of two (2) years from 15 June 2019, the effectivity date of the IRRs, or until 15 June 2021.

The executor or administrator, legal heirs, transferees, or beneficiaries shall file with the following Revenue District Offices (RDO) an Estate Tax Amnesty Return (ETAR) together with complete supporting documents as enumerated in the ETAR, and an Acceptance Payment Form:

The RDO must endorse the Acceptance Payment Form before payment of the estate amnesty tax.

A Certificate of Availment of the Estate Tax Amnesty shall be issued by the concerned RDO within fifteen (15) calendar days from receipt of application for estate tax amnesty, the duly validated Acceptance Payment Form, and complete documentary requirements.

What are the effects on an estate availing itself of the Estate Tax Amnesty?

Once the requirements and conditions of the IRRs of Estate Tax Amnesty are fully complied with, the estate shall be immune from the payment of all estate taxes including increments and additions thereto arising from the failure to pay the estate tax for the years 2017 and prior years. Immunity shall extend to all appurtenant civil, criminal, and administrative cases and penalties under the 1997 Tax Code, as amended.

The availment of the Estate Tax Amnesty and the issuance of the Acceptance Payment Form do not imply an admission of criminal civil or administrative liability on the part of the availing estate.

Click here to read the entire text of RA No. 11213 and here to read the entire text of RR No. 6-2019.

Click here to read related entry of “Tax Amnesty – Implementing Rules and Regulations.”