On July 30, 2021, President Rodrigo Duterte signed into law RA 11569, amending RA 11213 (The Tax Amnesty Act) to extend the validity of the tax amnesty for another two years. The deadline of applications has been postponed from June 14, 2021 to June 14, 2023.
The law is considered vital to the recovery of the economy as government-imposed lockdowns took away significant filing time from potential filers for estate taxes, resulting to not fully completing the estate tax amnesty process for the entire period allowed by the law. The new law was published in the Official Gazette on June 30, 2021 and took effect in July 15, 2021.
Revisiting RA 11213
REPUBLIC ACT No. 11213
An Act Enhancing Revenue Administration and Collection by Granting an Amnesty on All Unpaid Internal Revenue Taxes Imposed by the National Government for Taxable Year 2017 and Prior Years with Respect to Estate Tax, Other Internal Revenue Taxes, and Tax on Delinquencies.
RA 11213, otherwise known as the “Tax Amnesty Act” of 2019 is aimed at giving a “one-time opportunity to settle tax obligations through an estate tax amnesty program that will give reasonable tax relief to estates with deficiency estate taxes,” Section 2, Clause (a) reads. It is a window of opportunity for taxpayers to settle their unpaid internal revenue taxes for all taxable year 2017 and the years prior. The Estate Tax Amnesty only covers the Estate Tax Amnesty and Tax Amnesty on Delinquencies, not the General Tax Amnesty.
Effectivity
RA 11213 took effect on February 14, 2021 and was published in the Official Gazette. It became effective on April 24, 2019. The Implementing Rules and Regulations of Tax Amnesty on Delinquencies was released on April 5, 2019.
Coverage
The Estate Tax Amnesty includes the estate of decedents who died on or before December 31, 2017, whose estate taxes remained unpaid or have accrued as of December 17, 2021. Exceptions to this rule are stated in Section 9 of the republic act:
- estate tax cases which shall have become final and executory; and
- properties involved in cases pending in appropriate courts.
Tax rate
The estate amnesty tax is set at the rate of 6% based on the decedent’s total net estate at the time of death, except when the estate tax return was previously filed, in which case the tax base shall be 6% of the net undeclared estate.
How to Avail of the Estate Tax Amnesty
The estate administrator, lawful heirs, or beneficiaries who wish to avail of the Estate Tax Amnesty must file a Sworn Estate Tax Amnesty Return within two (2) years from the effectivity of the Implementing Rules and Regulations (IRR), dated April 24, 2019. It should be filed and paid simultaneously at the Revenue District Office of the Bureau of Internal Revenue (BIR) which has jurisdiction over the last residence of the decedent.
Immunities and Privileges of Availing the Estate Tax Amnesty
The payment of the estate tax amnesty shall be “immune from the payment of all estate taxes, as well as the increments and additions thereto, arising from the failure to pay any and all estate taxes for taxable year 2017 and prior years,” the law reads. Those who avail of the estate tax amnesty also have the privilege of immunity from civil, criminal, and administrative cases and penalties.
Sources:
Philippine National Authority: https://www.pna.gov.ph/articles/1145527
Official Gazette:
RA 11569: https://www.officialgazette.gov.ph/2021/06/30/republic-act-no-11569/
RA 11213: https://www.officialgazette.gov.ph/downloads/2019/02feb/20190214-RA-11213-RRD.pdf