BIR regulations on estate tax amnesty

EDITORIAL

The Bureau of Internal Revenue (BIR) recently released guideline on estate tax amnesty to collect some P6 billion in back taxes from the heirs of decedents.

In signing Revenue Regulations No. 6-2019, Finance Secretary Carlos G. Dominguez said the law provides “taxpayers a one-time opportunity to settle estate tax obligations through the program that will give reasonable tax relief to estate with outstanding estate tax liabilities.”

The amnesty covers the estate of the deceased who died on or before Dec. 31, 2017 which liabilities remained unpaid.

Taxpayers are given two years from the effectivity of the guideline to file the Estate Tax Amnesty Return (ETAR), or BIR Form No. 2118-EA in triplicate copies at the revenue district office (RDO) having jurisdiction over the last residence of the deceased.

If the decedent has no legal residence in the country, the return shall be submitted at RDO 39 (South Quezon City).

The amnesty rate of six percent shall be imposed on each decedent’s total net taxable estate at the time of death, without penalties at every stage of transfer of property.

To illustrate, if the original owner of the property died and subsequently his heir also died without paying the estate tax, the surviving heir shall pay both the two cascading six percent amnesty rate.

The rate shall be based on the fair market value of the property at the time of death.

The BIR stressed that the privilege will not be extended to delinquent estate tax liabilities which have become final and executory, in which case the tax amnesty on delinquent accounts may be applied.

Likewise, properties involving unexplained wealth, anti-money laundering and fraud are also excluded. Be guided accordingly