Estate Tax Amnesty Extended

In an effort to provide relief to taxpayers amidst the ongoing challenges brought about by the pandemic, the Philippine government has extended the deadline for availing of the Tax Amnesty on Delinquencies. This extension aims to encourage taxpayers to settle their tax obligations and, at the same time, help boost the government's revenue collection efforts. In this blog post, we'll explore the key details of the extended tax amnesty and how it can benefit taxpayers.

Extension of the Tax Amnesty: Originally the deadline for availing of the Tax Amnesty was set to expire last June 14, 2023, on Delinquencies has been extended until June 14, 2025. This extension gives taxpayers more time to assess their tax obligations, submit the necessary documents, and settle their delinquencies.

Benefits of Availing the Tax Amnesty:

1. Penalty-free Settlement: Taxpayers who avail of the tax amnesty can settle their tax delinquencies without having to pay any penalties or interests.

2. Peace of Mind: By settling their tax obligations, taxpayers can enjoy peace of mind knowing that they are compliant with the tax laws of the Philippines.

Coverage of Estate Tax Amnesty: Who are covered by the estate tax amnesty program? These are the estate of decedents who died on or before May 31, 2022, with or without tax assessments issued, whose estate taxes remain unpaid as of May 31, 2022. 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.

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.

How to Avail the Tax Amnesty: 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 following mandatory documents, along with the duly accomplished and sworn ETAR and the Acceptance Payment Form (BIR Form No. 0621-EA) are to be submitted in triplicate copies:

• A Certified true copy of the Death Certificate, or if not available, the certificate of no record of death from the Philippine Statistics Authority together with any valid secondary evidence;

• Taxpayer's Identification Number (TIN) of the decedent and heir(s);

• Notarized promissory note for “claims against the estate” arising from contract or loan (if applicable);

• Proof of claim of properties previously taxed (if any);

• Proof of claim of properties transferred for public use (if any);

• At least one government-issued identification card of the executor, administrator, heir, beneficiary, or representative;

• Other documents if the subject properties of the estate are real or personal (if applicable);

• Alternative documents at the request of the Commissioner of Internal Revenue if the abovementioned documents are lacking.

The estate tax amnesty rate remains to be six percent (6%) based on the total net estate of the decedent at the time of death. Taxpayers have the option to file and pay the Estate Tax Amnesty Return (ETAR) electronically or manually from June 15, 2023 until June 14, 2025, with any authorized agent bank, through remittance to any Revenue District Office (RDO), or authorized tax software provider as defined in the Revenue Memorandum Order (RMO) No. 8-2019.

Furthermore, taxpayers are allowed to pay in installments within two (2) years from the statutory date of payment without incurring civil penalties and interest.

RR No.10-2023 also amends the issuance of the Electronic Certificate Authorizing Registration (eCAR), wherein it shall only be issued upon the submission of the proof of the estate settlement such as the Extra-Judicial Settlement of Estate (EJS) and Copy of Court Order. Properties not indicated in the ETAR filed will be excluded from the eCAR unless additional estate tax amnesty payments are made within the amnesty period. Failure to do so would subject the properties to additional estate tax together with interest and penalties.

Taxpayers who fully comply with the requirements of the amended estate tax amnesty are granted immunity from paying all estate taxes, including any increments and additions, as well as from civil, criminal, and administrative cases, and penalties due to failure of payment of estate taxes for the period ending May 31, 2022, and the previous years.

The extended Tax Amnesty on Delinquencies provides taxpayers in the Philippines with an opportunity to settle their tax obligations without incurring additional penalties and interests. By availing of this program, taxpayers can achieve peace of mind knowing that they are compliant with the tax laws of the country.

For More information of the Extented Amnesty connect with us as each case is special. Don't wait any longer.