Brief Overview of the Estate Tax Amnesty

Did the decedent leave no will, debts, and liabilities but has properties?

Estates availing of the Estate Tax Amnesty (ETA) and fully complying with all the requirements under RR No. 6-2019, as amended by RR No. 10-2023, including the payment of the estate amnesty tax, shall be exempt from the payment of all estate taxes, including any surcharges, penalties, and interest, arising from the non-payment of estate taxes for the period ending May 31, 2022, and prior years.

Furthermore, such estates shall be immune from any related civil, criminal, or administrative cases and penalties under the National Internal Revenue Code of 1997, as amended. The availment of the ETA and the issuance of the corresponding Acceptance Payment Form shall not be construed as an admission of any criminal, civil, or administrative liability by the availing estate.

No penalties, surcharge, and immunity from related civil, criminal, or administrative cases under the Tax Code!

Current Law Governing the Estate Tax Amnesty in the Philippines

The law in effect is Republic Act No. 11213, as amended by R.A. Nos. 11569 and 11956.

The Estate Tax Amnesty applies to the estates of decedents who passed away on or before May 31, 2022, regardless of whether assessments have been issued, provided that the estate taxes remain unpaid or have accrued as of May 31, 2022. The availment period for this tax amnesty has been extended only until June 14, 2025, pursuant to RR No. 10-2023 issued by the Bureau of Internal Revenue (BIR) on September 8, 2023.

The Tax Rate

An Estate Tax Amnesty rate of six percent (6%) shall apply to the total net taxable estate of each decedent as of the time of death, without the imposition of penalties at any stage of property transfer. Provided, however, that the minimum Estate Amnesty Tax for the transfer of each decedent's estate shall be Five Thousand Pesos (₱5,000.00).

Net Estate = Gross Estate - Allowable Deductions

To compute the Net Estate, the Gross Estate may be reduced by the deductions permitted under the Estate Tax Law in effect at the time of the decedent's death, as outlined in Annex C of Revenue Memorandum Circular No. 103-2019.

But how is gross estate determined and computed?

Gross Estate is the value of all properties, real or personal, tangible or intangible, of the decedent.

The properties comprising the gross estate shall be valued based on their fair market value (FMV) as of the time of decedent's death. For Real Properties, the value of the FMV whichever is higher from the zonal value as determined by the BIR or as shown in the tax declaration as shown in the schedule of values fixed by the local assessor.

Zonal value vs. Assessed value

Mandatory Requirements for Settling the Estate Prescribed by the BIR

Go to the Revenue District Office where any of the decedent's properties are located, and bring the following documents:

For Issuance of Certificate of Availment of ETA:

1. Certified true copy of the Death Certificate (DC)

2. Taxpayer Identification Number (TIN) of decedent and heir/s

3. For “Claims Against the Estate” arising from Contract of Loan, Notarized Promissory Note, if applicable

4. Proof of the claimed “Property Previously Taxed”, if any

5. Proof of the claimed “Transfer for Public Use”, if any

6. At least one (1) valid government ID of the executor/ administrator of the estate, or if there is no executor or administrator appointed, the heirs, transferees, beneficiaries or authorized representative

For Real Property/ies, if any;

1. Certified true copy/ies of the Transfer/Original/Condominium Certificate/s of Title of real property/ies

2. Certified true copy of the Tax Declaration of real property/ ies, including the improvements at the time of death or the succeeding available tax declaration issued nearest to the time of death of the decedent, if none is available at the time of death

3. Certificate of No Improvement issued by the Assessor’s Office at the time of death of the decedent, if applicable

4. Certificate of Property Holdings

5. Barangay Certification of Residency (for Family Home deduction)

For Personal Property/ies, if applicable:

1. Certificate of Deposit/Investment/Indebtedness owned by the decedent alone, or decedent and the surviving spouse, or decedent jointly with others

2. Certificate of Registration of vehicle/s and other proofs showing the correct value of the same

3. Certificate of stocks

4. Proof of valuation of shares of stock at the time of death 5. Proof of valuation of other types of personal property

Other Requirements, if applicable:

1. Duly notarized original Special Power of Attorney (SPA), if the person transacting/processing the transfer is the authorized representative or one of the heirs, designated as executor/ Administrator;

2. Certification from the Philippine Consulate or Apostille, if the document is executed abroad; or

3. Location Plan/vicinity map if the zonal value is not readily available.

4. Government issued identification documents (ID)

For Issuance of Electronic Certificate Authorizing Registration (eCAR)

(For subsequent registration of the properties in favor of the surviving heirs and other person/s interested)

Mandatory Requirements:

1. Duly Endorsed Estate Tax Amnesty Return (ETAR) (BIR Form No. 2118-EA July 2021 (ENCS))

2. Acceptance Payment Form (APF – BIR Form 0621-EA July 2012 (ENCS)) with proof of payment

3. ONETT Computation Sheet of Tax Due duly approved by the Authorized Officer

4. Certificate of Availment

5. Affidavit of Self Adjudication or Deed of Extra-Judicial Settlement (EJS) of the Estate of the decedent; or Court decision/judgement if the estate has been settled judicially or there is a last will and testament.

Other Requirements, if applicable:

1. Duly notarized original Special Power of Attorney (SPA), if the person transacting/processing the transfer is the authorized representative or one of the heirs, designated as executor/ Administrator;

2. Certification from the Philippine Consulate or Apostille, if the document is executed abroad; or

3. Location Plan/vicinity map if the zonal value is not readily available.

If you haven't settled your loved one's estate yet, we highly recommend doing so now, as it is crucial to address these matters in a timely manner. The process of settling an estate can often be complex and emotionally taxing, involving various legal and financial considerations that must be navigated carefully. Delaying this process can lead to complications, including potential tax liabilities and disputes among heirs.

The Estate Tax Amnesty is currently available, but it is important to note that this opportunity can be availed of until June 14, 2025, save for the extension of amnesty by the President of the Philippines.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. While we strive to provide accurate and up-to-date information, this article may not reflect the most current legal developments or interpretations. Readers are encouraged to consult with a legal counsel for advice regarding their specific legal issues or concerns. The authors and publishers of this article disclaim any liability for actions taken or not taken based on the content of this article.