Tax Alert No. 69 [Revenue Memorandum Circular (RMC) No. 102-2019 dated 25 September 2019]

Providing additional clarification on Estate Tax Amnesty Under Title II of Republic Act (RA) No. 11213 or the Tax Amnesty Act, as implemented by Revenue Regulations (RR) No. 6-2019

The Commissioner of Internal Revenue has issued RMC No. 102-2019 dated 25 September 2019, to clarify issues relative to the implementation of estate tax amnesty pursuant to the provisions of RA No. 11213 or the Tax Amnesty Act.

Clarifications on the venue of filing:

• In case of several stages of succession and the properties are not common to all decedents, the Estate Tax Amnesty Return (ETAR) shall be individually filed at the Revenue District Office (RDO) having jurisdiction over the last residence of each decedent. The option to file at only one (1) RDO is not available in this instance.
• If the decedent has an on-going investigation in an RDO which is different from the revenue district that has jurisdiction over his domicile, the ETAR shall be filed with the RDO having jurisdiction over the last residence of the decedent. The ongoing investigation shall be consolidated in the RDO where the estate tax return shall be filed.

Clarifications with regard to Extrajudicial Settlement (EJS): 

• A supplemental EJS covering the undeclared real or personal property is required in the availment of estate tax amnesty.
• An EJS is also required if the heirs do not want to adjudicate the respective share of each heirs as they will form an estate/trust.
• Self-adjudication is allowed if there is only one (1) heir. If there are several heirs, an EJS signed by all the heirs is required.

Clarifications with regard to Certificate Authorizing Registration (CAR): 

• If an estate tax return had been filed prior to 2018 for which a tax clearance was issued but the CAR was not released, the heirs should request for issuance and release of CAR instead of availing of the estate tax amnesty
• In case of an ongoing investigation by a Revenue Officer (RO), an electronic CAR (eCAR) shall be issued only after submission of the report of investigation and after payment of deficiency taxes, if any. However, an eCAR may be issued even without the results of the audit or payment of deficiency taxes provided that the filer shall post a bond (either through a bonding company or a cash bond) which is based on the concerned RO’s proposed assessment on other tax liabilities. 
• If deficiency estate tax was assessed after issuance of an eCAR, the filer can avail of the estate tax amnesty as long as the deficiency estate tax is not yet a delinquent account and the decedent died on or before 31 December 2017. Issuance of CA is sufficient and there is no need to issue another eCAR.

Clarifications on deductions: 

• Judicial expenses for a pending court case pertaining to the issue of heirship of the properties previously settled extrajudicially and to which a CAR has already been issued is not an allowable expense against the estate. 
• No further deductions shall be allowed for undeclared properties since deductions are deemed to have been claimed in previous estate tax return filed, except for the share of the surviving spouse on the undeclared conjugal property. 
• Medical expenses are treated as a special item of deduction which should not affect the share of the surviving spouse.

Other Clarifications: 

• In case of a lost Transfer of Certificate of Title (TCT), the filer can submit a certified true copy of the OCT/TCT/CCT issued by the Register of Deeds (RD) / Land Registration Authority (LRA). 
• If it is the RD’s copy that is lost, the filer shall file the owner’s copy of the OCT/TCT/CTC together with Certificate of Loss issued by RD. However, only the CA shall be issued while the eCAR shall be issued when the certified true copy of the reconstituted title is submitted.
• Considering there is no donation in general waiver or renunciation of rights, the taxpayer is not subject to donor’s tax and documentary stamp tax (DST). Hence, there is no need to file for a donor’s tax and DST Returns.

You may access the full version of this RMC through the BIR website.