The Philippine Tax Amnesty Act of 2019, also known as the Republic Act 11213 (RA 11213), allows taxpayers to avail the benefits of the Estate Tax Amnesty law.
The Philippine President Rodrigo Duterte signed the act on February 14, 2019, and it already started effect on June 15, 2019.
On May 30, 2019, the released Revenue Regulations 6-2019 (RR 6-2019) that states the act will “provide the taxpayers 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.”
In other words, the government is urging every taxpayer eligible to claim their benefits of the Tax Amnesty Act.
What are the benefits?
The Estate Tax Amnesty will remove all the penalties, surcharges, and interest of the estate of the decedent/s who died on or before December 31, 2017. In simpler terms, taxpayers who avail of the Estate Tax Amnesty will no longer push through the payment of estate taxes, civil, criminal, and administrative cases and penalties.
It doesn’t matter whether the estate is without assessments duly issued, and that is unpaid and have accrued as of December 31, 2017. As long as the taxpayer avails of the amnesty, the past liabilities will be removed.
The Estate Tax Amnesty rate is 6% and is based on the total net estate during the decedent’s time of death. The net estate is the gross estate without the allowable deductions as provided in the Tax Code or other state laws when the decedent died. On the other hand, if the estate tax return was already filed with the Bureau of Internal Revenue (BIR) before, the 6% estate tax will be based on the net undeclared estate.
However, do take note that there are still exceptions. RR 6-2019 stated it as:
- Delinquent estate tax liabilities which have become final and executory and those covered by Tax Amnesty on Delinquencies; and
- 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 RA No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, and RA No. 7080 or an Act Defining and Penalizing the Crime of Plunder;
- Involving violations of RA No. 9160, otherwise known as the Anti-Money Laundering Act, as amended;
- 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
- Involving felonies of frauds, illegal exactions and transactions and malversation of public funds and property under Chapters III and IV of Title VII of the Revised Penal Code.
How to avail of the benefits?
According to the RR 6-2019, the step-by-step process is as follows for the ordinary individual:
Step 1: The eligible people, such as executor or administrator, legal heirs, transferees or beneficiaries, must file an Estate Tax Amnesty Return (Etar or BIR Form 2118-EA) to the Revenue District Office that covers the estate of the decedent. However, in the case there is no executor or administrator in the Philippines, the form must be submitted to RDO 39-South Quezon City.
Step 2: The necessary documents, which are a duly accomplished and sworn Etar, Acceptance Payment Form (APF or BIR Form 0621-EA), and the needed documents mentioned to the Etar must be submitted to the Revenue District Office in charge of the area. This is necessary to get an endorsement of the APF before paying any estate amnesty tax with the Authorized Agent Banks (AABs) or Revenue Collection Officers (RCOs).
Under the Etar, each property has its own set of requirements. So, make sure to check what’s needed. However, these documents are necessary:
Step 3: After payment, the Etar and APF with proof of payment, and other necessary documents must be submitted to the RDO in triplicate copies.
Step 4: Upon submission, the RDO in charge will grant the Certificate of Availment of the Estate Tax Amnesty after within 15 calendar days from the receipt of the application.
Step 5: One real property will receive one electronic Certificate Authorizing Registration.
Availing of the Estate Tax Amnesty is a process that needs time to fulfil. With the steps and documents needed to become immune with estate liabilities, a business owner or an ordinary citizens time will not be enough when there is work to be done.
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