Estate Tax Amnesty Philippines: Coverage, 6% Rate, and How to Avail

The estate tax amnesty in the Philippines is a one-time opportunity under Republic Act No. 11213, also known as the Tax Amnesty Act, for estates of decedents who died on or before December 31, 2017, with or without prior assessments, whose estate taxes remained unpaid or had accrued as of that date. The estate pays an amnesty tax of six percent (6%) based on the decedent's total net estate at the time of death — or on the net undeclared estate if an estate tax return was previously filed. If allowable deductions exceed the gross estate, heirs may still avail of the amnesty by paying a minimum estate amnesty tax of Five thousand pesos (P5,000).

Who may avail of the estate tax amnesty

Under Section 4 of Republic Act No. 11213, the Estate Tax Amnesty covers the estate of decedents who died on or before December 31, 2017, with or without assessments duly issued, whose estate taxes have remained unpaid or have accrued as of December 31, 2017.

The amnesty does not extend to tax cases that have become final and executory, or to properties involved in cases pending in appropriate courts falling under the jurisdiction of the Presidential Commission on Good Government; involving unexplained or unlawfully acquired wealth under Republic Act No. 3019 or Republic Act No. 7080; involving violations of Republic Act No. 9160 (the Anti-Money Laundering Act, as amended); involving tax evasion and other criminal offenses under Chapter II of Title X of the National Internal Revenue Code of 1997, as amended; and 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.

How much is the estate amnesty tax

The rate is six percent (6%) of the decedent's total net estate at the time of death. If an estate tax return was previously filed with the Bureau of Internal Revenue, the 6% rate applies to the net undeclared estate — the difference between the total net estate valued at the time of death and the net estate previously declared.

The NIRC of 1997, as amended, or the applicable estate tax laws prevailing at the time of death, apply suppletorily on valuation, manner of computation, and related matters.

This is distinct from the regular estate tax. Under Revenue Regulations No. 12-2018, which consolidated the estate tax and donor's tax rules after the TRAIN Law, the net estate of every decedent, whether resident or non-resident, is subject to estate tax at the rate of six percent (6%). Estate taxation is governed by the statute in force at the time of death, and the tax accrues as of death.

How to avail: filing and payment

Under Section 6 of Republic Act No. 11213, the executor or administrator of the estate — or, if none is appointed, the legal heirs, transferees, or beneficiaries — must file a sworn Estate Tax Amnesty Return with the Revenue District Office of the Bureau of Internal Revenue having jurisdiction over the last residence of the decedent. The return must be filed within two (2) years from the effectivity of the Implementing Rules and Regulations of the Act.

Payment of the amnesty tax is made at the time the Return is filed. For nonresident decedents, the Return is filed and the tax paid at Revenue District Office No. 39, or any other office indicated in the Implementing Rules and Regulations.

If the estate involves properties still in the name of another decedent or donor, the present holder, heirs, executors, or administrators file only one Estate Tax Amnesty Return and pay the estate amnesty tax based on the total net estate at the time of death of the last decedent, covering all accrued taxes arising from the transfer of the estate from all prior decedents or donors.

The Revenue District Office issues and endorses an Acceptance Payment Form for the authorized agent bank — or, in its absence, the revenue collection agent or municipal treasurer — to accept the payment. Proof of settlement of the estate, whether judicial or extrajudicial, must be attached to the Return.

Immunities and privileges

Under Section 8, estates that fully comply with the conditions of the Act and pay the estate amnesty tax are immune from the payment of all estate taxes, including increments and additions arising from failure to pay estate taxes for taxable year 2017 and prior years, and from all appurtenant civil, criminal, and administrative cases and penalties under the NIRC.

The Bureau of Internal Revenue, in coordination with applicable regulatory agencies, is directed to set up a system enabling the transfer of title over properties to heirs and beneficiaries and cash withdrawals from the decedent's bank accounts. Upon full compliance and payment, the amnesty becomes final and irrevocable.

Certificate of availment and proof of compliance

The Estate Tax Amnesty Return is conclusively presumed true, correct, and final upon filing, and is deemed complete upon full payment. The Acceptance Payment Form and the Return are submitted to the Revenue District Office after complete payment.

The Bureau of Internal Revenue issues a Certificate of Availment of the Estate Tax Amnesty within fifteen (15) calendar days from submission of the Acceptance Payment Form and the Return. If no certificate is issued within that period, the duplicate copies of the Acceptance Payment Form, stamped as received, and the Estate Tax Amnesty Return are deemed sufficient proof of availment.

Frequently asked questions

Who can file the estate tax amnesty return? The executor or administrator of the estate, or if none is appointed, the legal heirs, transferees, or beneficiaries.

What is the estate tax amnesty rate in the Philippines? Six percent (6%) of the decedent's total net estate at the time of death, or of the net undeclared estate if a return was previously filed. If allowable deductions exceed the gross estate, a minimum payment of Five thousand pesos (P5,000) applies.

Does the amnesty cover estates of decedents who died after December 31, 2017? No. Coverage is limited to decedents who died on or before December 31, 2017. Estates of decedents who died after that date are governed by the regular estate tax rules under the NIRC, as amended by the TRAIN Law.

Practical takeaways

• The estate tax amnesty under Republic Act No. 11213 covers estates of decedents who died on or before December 31, 2017, with or without prior assessments.
• The amnesty tax is 6% of the total net estate at the time of death, or of the net undeclared estate if a return was previously filed; the minimum is P5,000 where deductions exceed the gross estate.
• File the sworn Estate Tax Amnesty Return with the Revenue District Office having jurisdiction over the decedent's last residence, within two years from the effectivity of the Implementing Rules and Regulations, and pay at the time of filing.
• Full compliance and payment make the amnesty final and irrevocable and confer immunity from estate taxes and related civil, criminal, and administrative cases.
• The BIR issues the Certificate of Availment within fifteen calendar days; otherwise, stamped copies of the Acceptance Payment Form and the Return serve as sufficient proof.

Primary sources

The rules discussed above are drawn from the following primary sources. Where the firm's library holds the document as a PDF it is embedded here in full; the rest are cited by title.

RR No. 12-2018 — Consolidates Revenue Regulations on Estate Tax and Donor's Tax incorporating the amendments introduced by RA No. 10963 (TRAIN Law) (Published in Manila Bulletin on March 19, 2018) Digest | Full TextOpen in Law LibraryDownload PDF

• REPUBLIC ACT NO. 10963 - AN ACT AMENDING SECTIONS 5,6, 24,25, 27, 31, 32, 33, 34, 51, 52, 56, 57, 58, 74, 79, 84, 86, 90, 91, 97, 99, 100, 101, 106, 107,108,109,110,112,114,116,127,12S, 129, 145, 148,149,151,155,171,174,175,177,178,179,180, 181, 182, 183,186,188,189,190,191,192, 193,194,195, 196, 197,232, 236,237,249, 254, 264,269, AND 288; CREATING NEW SECTIONS 51-A, 148-A, 150-A, 150-B, 237-A, 264-A, 264-B, AND 265-A; AND REPEALING SECTIONS 35,62, AND 89; ALL UNDER REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES

• 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 DELIQUENCIES

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.