Revenue Regulation No. 6-2019 : Implementing the Estate Tax Amnesty on RA No. 11213 or Tax Amnesty Act

The Bureau of Internal Revenue has finally published and issued on May 31, 2019 the final implementing rules and regulations of the Tax Amnesty Act or the Republic Act No. 11213 that was approved by the president on February 14, 2019. For your guidance, please visit the official BIR website (www.bir.gov.ph) for more information about the regulation. The BIR is planning to accept application for Estate Tax Amnesty on June 17, 2019. This amnesty can only be availed within two (2)  years from the effectivity of these regulations. Herein is a copy of the regulations for your information.

MAY 29, 2019

REVENUE REGULATION 6-2019

SUBJECT: Implementing  the   Provisions  of  Estate  Tax  Amnesty  under  Title   II   of
Republic Act (R.A.) No. 11213, Otherwise Known as the "Tax Amnesty Act"

TO: All Internal Revenue  Officers and Others Concerned


Section 1. Purpose. - Pursuant to Section 244 in relation  to Section 245 of the 1997 Tax Code as amended, and  Section 27 of Republic Act (RA) No. 11213, these  Regulations are  hereby promulgated to 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.

Section 2. Coverage.- The estate tax amnesty shall cover the estate of decedents who  died   on  or  before December 31,  2017, with  or  without assessments  duly issued therefor, whose estate tax/ es have  remained unpaid or have  accrued as of December 31, 2017.

Section 3. Exceptions.- The Estate Tax Amnesty shall  not extend to the following:

3.1 Delinquent estate tax liabilities which  have become final and executory and those covered by Tax Amnesty on Delinquencies; and

3.2 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  VII of     the Revised  Penal  Code.

Section 4. Definition of Terms.  -

a.   Gross  Estate  - consists of  all  properties and   interests in properties of the  decedent at  the  time  of his  death as well  as properties he transferred during his lifetime (only  in form), but  in substance, ownership of the same was  only  transferred at the  time of his death.

b.   Net  Estate   - refers to  the   gross estate  less   all  allowable deductions as  provided in the  NIRC of 1997, as  amended, or the  applicable estate tax law  prevailing at the  time of death of the  decedent.

c. Net Undeclared Estate- refers to the difference between the total  net estate valued  at the time  of death of the decedent and the  net  estate previously declared with  the  BIR. For  purposes of  these  Regulations, the  net  estate  previously declared  is presumed to have  been  reduced with  all the  allowable deductions; thus,  only the share of the surviving spouse on the undeclared conjugal  properties, if any, may  be deducted from the  undeclared estate.

Section 5.  Rate of Estate Tax.- An estate tax amnesty rate of six  percent (6°/o) 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 in cognizance with  the  rules of succession under the  Civil Code of the  Philippines on the transmission of properties, interests, rights and  obligations of the  decedent. Provided, that the  minimum estate amnesty tax  for  the transfer of the  estate of each  decedent shall  be Five Thousand Pesos (P5,000.00).

The  provisions  of  the  NIRC of  1997, as  amended, or  the  applicable estate/inheritance tax laws  prevailing at the  time of death of the  decedent with  respect to valuation, manner of computation, and  other related matters shall  apply suppletorily.

Section 6.  Composition of the Gross Estate.- The gross estate of a decedent, as classified below,  shall  be  comprised of the  following properties and  interest therein at the  time  of his/her death, and  such  lifetime transfers includible in  the  gross estate as enumerated under  the  Tax Code.

1.   Residents and   Citizens  - all  properties, real  and   personal, tangible and intangible, wherever situated

2.   Non-resident aliens - only  real  and  personal properties  situated in  the Philippines

Section 7.  Valuation of the Gross Estate.- The properties comprising the gross estate of the  decedent shall  be valued,  in general,  based on the fair market value  as of the time  of death of the decedent.

If the  property is a real  property, the  fair  market value  shall  be the  higher value between the zonal value  as determined by the Commissioner of Internal Revenue and  the fair  market value  as  shown in  the  schedule of values fixed  by  the  provincial and  city assessors.

In the  case of shares of stock,  the fair market value  shall  be:

a. Listed and traded in the stock  exchange- The price  at the time of death or the arithmetic mean  between the  highest and  lowest quotation at a date  nearest the  date of death, if none  is available on the  date of death itself.

b. Not listed  shares- The  book  value  for  common shares and  par  value for preferred shares as shown in the audited financial statement of the issuing corporation nearest to the  date of death of the  decedent. The valuation  of  these shares shall   be  exempt from   the   provisions  of Revenue Regulations No. 06-2013, as amended.

Proprietary shares in any association, recreation or amusement club  (such  as galt polo, or similar clubs)  shall  be valued  using  the  bid price  on the  date of death or  nearest to the  date of death, if none is available on the  date of death itself, as  published in the newspaper of general circulation.

Cash in bank  in local  and/or foreign  currency shall  be based on the  peso  value  of the  balance at the date  of death.

Section 8. Deductions from the Gross Estate - For purposes of determining the Net Estate, the  gross  estate may  be reduced by the  deductions allowed by the  estate tax law applicable at the time  of death of the decedent (Annex  A).

Section 9. Time  and  Place  of Filing  Estate  Tax Amnesty Return   (BIR Form 2118-EA) and Payment of Estate Tax Due.-

For  purposes of these Regulations, the  Estate Tax Amnesty Return (ETAR)  (BIR Form  No. 2118-EA)  (Annex  B) shall  be filed by the executor or administrator, legal  heirs, transferees or beneficiaries within two  (2) years  from  the effectivity of these Regulations with  the ROO having  jurisdiction over the last residence of the decedent. In case of a non­ resident decedent, with  executor or administrator in the  Philippines, the  return shall  be filed   with   the   ROO where  such   executor /administrator  is  registered  or  if  not   yet registered, at  the  executor /administrator's legal  residence. In  case  of  a  non-resident decedent with  no executor or  administrator in the  Philippines, the  return shall  be filed with  ROO No. 39-  South   Quezon   City.   The  foregoing provisions notwithstanding, the Commissioner  of  Internal   Revenue  may   exercise  his   power  to   allow   a   different venue/place for the filing of tax returns.

The  duly  accomplished and  sworn ETAR, and  Acceptance Payment Form  (APF) (BIR  Form    No.   0621-EA)   (Annex    C),  together  with    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 AABs or RCOs. However, only the  duly endorsed APF shall  be presented to and  received by the  AAB or RCO.

After  payment, the  duly  accomplished and  sworn ETAR and  APF with   proof  of payment, together with  the  complete documentary requirements shall  be  immediately submitted to the  RDO in triplicate copies. Failure to submit the same within the two  (2)­ year  period from  the  effectivity of these Regulations is tantamount to  non-availment of the  Estate Tax Amnesty and  any  payment made  may be applied against the  total  regular estate tax due  inclusive of penalties.

Section 10.   Estate Tax Amnesty Return for Undeclared Properties. - In case the estate has properties which  were not declared in the  previously filed  return, the  legal heirs/executors/administrators can  file  an  ETAR or  an  amended ETAR, whichever  is applicable, and  pay the estate amnesty tax as stated in Sec. 5 of these Regulations, without penalties, based on the  net taxable value  of the  Net Undeclared Estate as defined in Sec. 4 (c) of these Regulations within two  (2) years from  the effectivity of these Regulations.

Undeclared properties, after the  lapse of the two-year period from  the  effectivity of these  Regulations, shall  be subject to  the  applicable estate tax  rate  prevailing at  the time  of death including interest and  penalties due thereon.

Section  11.   Estate  with   Properties Subject   of  Taxable Donation/Sale.  - Properties included in the  Estate Tax Amnesty availment which  are  likewise subject of taxable donation/sale  shall  be assessed of the  corresponding donor's/capital gains/or other applicable taxes  at the  time  of donation/sale including penalties, if applicable.

Section 12.  Issuance of Certificate of Availment.- The Certificate of Availment of the  Estate Tax Amnesty (Annex  D) shall  be issued by the concerned RDO within fifteen (15)  calendar days  from  the  receipt of the  application for estate tax  amnesty, together with  duly  validated APF and  complete documentary requirements enumerated  in  BIR Form  No. 2118-EA.

Section 13.  Issuance of  electronic Certificate Authorizing Registration (eCAR).- One (1) eCAR shall  be issued per  real  property including the  improvements, if any,  covered by Original  Certificate of Title/Transfer  Certificate of Title/Condominium Certificate of Title  or  Tax  Declaration for  untitled properties.  For  personal properties included in the  estate, a separate eCAR shall  be issued.

Section 14.   Administrative Sanctions.-  Concerned personnel  who  have  been found  remiss in their responsibilities in ensuring compliance with  the  herein prescribed policies and  procedures shall  be imposed with  the applicable administrative sanctions as provided under existing policies.

Section 15. Report to Oversight Committee. - Report to  the   Congressional Oversight Com111ittee shall  be submitted by the  BIR within six (6) months after  the  two (2) year  period of availment of the  Estate Tax Amnesty.

Section 16.  -  Immunities and  Privileges of Availing  Estate  Tax Amnesty. - Estates covered by Estate Tax Amnesty, which  have fully complied with  all the conditions set  forth  hereof,  including the  payment of estate tax amnesty, shall  be immune from  the payment of all estate taxes  as well as any  increments and  additions thereto, arising from the  failure to pay any  and  all estate taxes for taxable year  2017 and  prior years, and  from all appurtenant civil, criminal and administrative cases, and  penalties under the 1997 Tax Code, as amended.

The availment of the  Estate Tax Amnesty herein provided and  the  issuance of the corresponding APF  do  not  imply   any   admission  of  criminal, civil  or  administrative liability on the  part of the availing estate.

Section 17. Separability Clause.- If any clause,  sentence, provision or section of these rules  shall  be held invalid  or unconstitutional, the remaining parts thereof shall  not be affected  thereby.

Section  18.  Effectivity.  - These regulations shall  take  effect  within fifteen (15) days   from  date   of  its  publication in  the   newspaper of  general circulation  or  Official Gazette.


(Original Signed)
CARLOS G. DOMINGUEZ


Recommending Approval:

(Original Signed)
CAESAR R. DULAY
Commissioner of Internal Revenue

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