Tax Alert No. 46 [Revenue Regulations No. 6-2019 dated 29 May 2019]

Implementing the Provisions of Estate Tax Amnesty under Title II of Republic Act (RA) No. 11213, Otherwise Known as the “Tax Amnesty Act” 

The Secretary of Finance has issued Revenue Regulations (RR) No. 6-2019 dated 29 May 2019 to implement the provisions of Estate Tax Amnesty under Title II of Republic Act No. 11213 or the Tax Amnesty Act.

The estate tax amnesty (ETA) shall cover the estate of decedent/s who died on or before 31 December 2017, with or without assessments duly issued therefor, whose estate tax/es have remained unpaid or have accrued as of 31 December 2017.

The estate tax amnesty shall not cover the following:

1. Delinquent estate tax liabilities which have become final and executory and which are covered by Tax Amnesty on Delinquencies; and
2. Properties involved in cases pending appropriate courts as enumerated in the regulation.

A tax amnesty rate of six percent (6%) 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, provided that the minimum amnesty tax for the transfer of the estate of each decedent shall be Five Thousand Pesos (PHP5,000.00).

In 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).

The gross estate shall be valued as follows:

1. General – Fair market value as of the time of death of the decedent.
2. Real Property – Fair market value which shall be the higher between the (a) zonal value as determined by the Commissioner; and (b) fair market value fixed by the provincial and city assessor.
3. Shares of Stocks – Fair market value which shall be determined as follows:
   • Listed and traded in the stock exchange – Price at the time of death or the arithmetical 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;
   • Unlisted Shares – Book value for common shares and par value for preferred shares as shown in the audited financial statements of the issuing corporation nearest to the date of death of the decedent.
4. Proprietary shares in any association, recreation or amusement clubs (e.g., golf, polo, or similar clubs) – 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 a newspaper of general circulation. 
5. Cash in bank in local and foreign currency – Peso value of the balance at the date of death.

The Estate Tax Amnesty Return (ETAR) (BIR Form No. 2118-EA) shall be filed within two (2) years from the effectivity of these regulations to the Revenue District Office (RDO) having jurisdiction over the last residence of the decedent. In case of non-resident decedent, the return shall be filed with the RDO where the executor or administrator is registered. However, if there is no executor/administrator, the ETAR shall be filed with RDO No. 39 – South Quezon City. Additional documentary requirements were enumerated in the attached annexes to the regulations.

The Certificate of Availment shall be issued by the concerned RDO within 15 calendar days from receipt of the application for ETA, together with the duly validated Acceptance Payment Form and complete documentary requirements.

One (1) electronic Certificate Authorizing Registration (eCAR) shall be issued per real property including improvements, if any, covered by Original Certificate of Title/Transfer Certificate of Title/Condominium Certificate of Title or Tax Declaration for untitled properties. A separate eCAR shall be issued for personal properties.

Estates covered by the amnesty, upon full compliance of all the conditions, 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.

RR No. 6-2019 was published in a newspaper of general circulation on 31 May 2019 and shall be effective on 15 June 2019.

You may access the full version of the issuance through the BIR website.