Revenue Memorandum Circular (RMC) No. 68-2019, dated July 1, 2019, clarifies certain issues on the availment of the Estate Tax under Revenue Regulations (RR) No. 6-2019 or the Implementing Rules and Regulations of the Estate Tax Amnesty pursuant to Republic Act No. 11213 (Tax Amnesty Law of 2019).
Relevant Highlights
- BIR CLARIFIES CERTAIN PROVISIONS ON THE AVAILMENT OF THE ESTATE TAX AMNESTY
- TAX & BUSINESS-RELATED NEWS [JULY 10-16]
I. BIR CLARIFIES CERTAIN PROVISIONS ON THE AVAILMENT OF THE ESTATE TAX AMNESTY
Revenue Memorandum Circular (RMC) No. 68-2019, dated July 1, 2019, clarifies certain issues on the availment of the Estate Tax under Revenue Regulations (RR) No. 6-2019 or the Implementing Rules and Regulations of the Estate Tax Amnesty pursuant to Republic Act No. 11213 (Tax Amnesty Law of 2019).
It may be recalled that pursuant to the Tax Amnesty Act of 2019, the law gives the opportunity to settle estate tax obligations through an estate tax amnesty program that will give reasonable tax relief to estate of the decedent who died on or before December 31, 2017.
Highlights of the clarifications, categorized per area of concerns, are summarized below:
a. Documents To Be Prepared
b. Steps On The Availment
c. Who May Or May Not Avail, Taxable Base & Rate
d. Effects Of Availment On Bir Collection Enforcement
e. Administrative Compliance
A. DOCUMENTS TO BE PREPARED
1. The executor or administrator, legal heirs, transferees or beneficiaries (collectively known as “filer”) shall ensure that the estate of the decedent has a Tax Identification Number (TIN). All heirs, including minors without TIN, are required to secure their respective TIN.
2. Prepare the Death Certificate issued by the Philippines Statistics Authority (PSA), or in the absence thereof, Certificate of No Record of Death from PSA.
3. Prepare the tax declaration showing the Fair Market Value of the property at the date of death or the succeeding available tax declaration issued nearest to the date of death for purposes of valuation of properties. In the absence thereof, reference on valuation can be accessed in the BIR website. Certificate of zonal valuation from RDO is not required.
4. Prepare one (1) Extra Judicial Settlement (EJS) in case the estate involves multiple decedent intended for every stage of transfer/succession or one (1) EJS covering all the stages of transfer/succession with respect to the inherited share of the common property emanating from the first decedent shall be submitted.
B. STEPS ON THE AVAILMENT
1. Accomplish manually the downloadable BIR Form No. 2118-EA/Estate Tax Amnesty Return (ETAR) and BIR Form No. 0621-EA/Acceptance Payment Form (APF) in triplicate copies.
2. File ETAR to the RDO having jurisdiction over the last residence of the decedent for endorsement of APF. In case the estate has a previously-issued TIN, the ETAR shall be filed with the RDO which issued the said TIN.
If the properties involved are common properties of multiple decedents, emanating from the first decedent, and no estate tax returns have been previously filed, the ETAR may be filed together in any one (1) RDO having jurisdiction over the last residence of any of the decedents.
3. Pay the amnesty amount equivalent to 6% based on the decedent’s total net taxable estate at the time of death, with the authorized agent bank or pay thru the Revenue Collection officer in case payment is Php 20,000 and below or if payments is thru manager’s/cashier’s check. Minimum amount is Php 5,000 per decedent. Payment shall be made after the RDO endorsement.
4. Submit to RDO a copy of ETAR and APF duly received by bank.
C. WHO MAY OR MAY NOT AVAIL, TAXABLE BASE & RATE
1. Undeclared properties may be the subject of estate tax amnesty less the share of the surviving spouse, if any, on the undeclared conjugal property, provided that it is not involved in an existing estate tax delinquency.
2. An estate with unpaid penalties on a previously filed estate tax return may pay a minimum estate tax amnesty amount of Php 5,000 and file the required ETAR.
3. Estate with pending judicial settlement/last will of testament in court with submission of certified true copy of the court resolution or leave of court may avail the tax amnesty.
4. Estate with on-going expropriation of property in which expropriation happened after the death of the decedent may avail the tax amnesty.
5. Estate with on-going investigation (including LOA, PAN, FAN, and all assessments not considered delinquent) may avail the estate tax amnesty.
6. A holder/buyer in a deed of sale on behalf of the heirs may avail the tax amnesty provided that holder/buyer shall present the notarized EJS signed by all heirs together with complete documentary requirements
7. A rate of 6% based on the decedent’s total net taxable estate at the time of death shall be imposed at every stage of succession. Minimum amount is Php 5,000 per decedent
D. EFFECTS OF AVAILMENT OF ESTATE TAX AMNESTY
1. Authorization of partial or total withdrawal of cash in bank for payment of estate tax amnesty due may be allowed by the BIR without subjecting to the final withholding tax, upon written request of the taxpayer. The bank shall issue a manager’s or cashier’s check payable to the order of the BIR. In the absence of a written request approved by the CIR, an Electronic Certificate Authorizing Registration (eCAR) shall be presented for the authorization of withdrawal of cash in bank.
2. In case of pending judicial settlement/last will testament, issuance of eCAR shall be on a per real property.
3. In case of EJS with multiple successions, all the names of the decedents will be shown in the eCAR together with a brief explanation on the consolidation and payment of all estate be clearly stated on the “Remarks” and “Payment Details” fields.
E. ADMINISTRATIVE COMPLIANCE
1. Tax amnesty amount cannot be paid on
2. The estate amnesty tax rate of 6% shall cover both the unpaid estate and inheritance taxes.
3. Failure to submit the validated APF with proof of payment within the two-year period would result to non-availment of the Estate Tax Amnesty. Payment may be applied to the total regular estate tax due inclusive of penalties.
4. Payments thru BIR Form 0605 made prior to June 15, 2019 for the purpose of availing the Estate Tax Amnesty are not valid and may be claimed for refund.
II. TAX & BUSINESS-RELATED NEWS [JULY 10-16]
1. ‘No illegal Chinese workers in ecozones’
2. Draft IRR for Personal Property Security Act released
3. LGU taxation of professionals
4. POGO firm wants to hire more Filipinos
5. PEZA: Less applicants seek ecozone status
6. BOI eyes P2 B potential investments in Zamboanga
7. New office space to meet demand from BPOs, POGO
8. Pagcor sees P20 B revenue from POGO
9. Pagcor appeal: Don’t ‘overtax’ Pogos
10. Two POGO hubs under way in Clark, Cavite — Pagcor
11. COA gives SEC good housekeeping mark
12. DOF chief wants BOC ‘strike team’ vs foreign trash shipments
13. BIR seeking P3B more from online casino workers as firms say foreigners already residents
14. Online casinos to top call centers as space users
15. SEC drafting rules for incorporators
16. PEZA has P23M in uncollected fees – COA
17. DOF orders BOC, BIR to keep ‘tight watch’ over increasing illegal cigarette trade
18. PEZA seeks exemption for 8 cities from AO 18 coverage
‘No illegal Chinese workers in ecozones’ [Manila Times, July 16, 2019]
THE Philippine Economic Zone Authority (PEZA) on Monday denied a Laguna province-based publication’s claim that there are illegal Chinese workers in its economic zones.
Source: https://www.manilatimes.net/no-illegal-chinese-workers-in-ecozones/584902/
Draft IRR for Personal Property Security Act released [Philippine Star, July 16, 2019]
The Department of Finance (DOF) has released the draft implementing rules and regulations (IRR) for the Personal Property Security Act, a law which is seen to make credit more accessible to micro, small and medium enterprises (MSMEs), farmers and fishers.
Source: https://www.philstar.com/business/2019/07/16/1934956/draft-irr-personal-property-security-act-released#QmPouh4YS5hePh7H.99
LGU taxation of professionals [Philippine Daily Inquirer, July 16, 2019]
In line with the objectives of the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, the Department of Finance (DOF) issued last month Local Finance Circular No. 001-2019.
Source: https://business.inquirer.net/274767/lgu-taxation-of-professionals#ixzz5tqy4z2eH
POGO firm wants to hire more Filipinos [Manila Times, July 15, 2019]
AN offshore gaming operator wants to hire more Filipinos amid concerns that only foreign workers were given the opportunity to work in the fast-growing industry.
Source: https://www.manilatimes.net/pogo-firm-wants-to-hire-more-filipinos/584306/
PEZA: Less applicants seek ecozone status [Philippine Star, July 15, 2019]
The Philippine Economic Zone Authority (PEZA) expects less than half of the 131 ecozone applications in Metro Manila to vie for ecozone status even if the office of the President (OP) decides to give them a longer period of six months on the moratorium imposed on new economic zones in the National Capital Region (NCR).
Source: https://www.philstar.com/business/2019/07/15/1934688/peza-less-applicants-seek-ecozone-status#QalG2WDC7Zx7QhqL.99
BOI eyes P2 B potential investments in Zamboanga [Philippine Star, July 15, 2019]
The Board of Investments (BOI) expects over P2 billion potential investments in the Zamboanga Peninsula following the conduct of roadshows on priority sectors being promoted by the government.
Source: https://www.philstar.com/business/2019/07/15/1934682/boi-eyes-p2-b-potential-investments-zamboanga#vtAYCRkF0ISUYoMb.99
New office space to meet demand from BPOs, POGO [Philippine Star, July 15, 2019]
A pipeline of new office space all over the country is expected to meet the surge in demand coming from both the business process outsourcing industry and the offshore gaming market, according to property consultant David Leechiu.
Source: https://www.philstar.com/business/2019/07/15/1934681/new-office-space-meet-demand-bpos-pogo#PPGb1gBllOxzqRHQ.99
Pagcor sees P20 B revenue from POGO [Philippine Star, July 15, 2019]
Gaming regulators expect revenue from the country’s offshore gaming industry to climb to P20 billion by the end of this year.
Source: https://www.philstar.com/business/2019/07/15/1934677/pagcor-sees-p20-b-revenue-pogo#7x8iErzLji9VpHBQ.99
Pagcor appeal: Don’t ‘overtax’ Pogos [Philippine Daily Inquirer, July 13, 2019]
The state-run Philippine Amusement and Gaming Corp. (Pagcor) on Friday cautioned against “overtaxing” Philippine offshore gaming operator (Pogo) firms and their foreign workers as the sector is expected be “here to stay” and generate more tax revenues for the country moving forward.
Source: https://business.inquirer.net/274647/pagcor-appeal-dont-overtax-pogos
Two POGO hubs under way in Clark, Cavite — Pagcor [ Manila Bulletin, July 13, 2019]
State-run Philippine Amusement and Gaming Corp. (Pagcor) has granted two licenses for the establishment of offshore gaming hubs that will allow government regulators to easily monitor the operations of this booming gambling business.
Source: https://business.mb.com.ph/2019/07/12/two-pogo-hubs-under-way-in-clark-cavite-pagcor/
COA gives SEC good housekeeping mark [Manila Bulletin, July 13, 2019]
The Commission on Audit (COA) has given the Securities and Exchange Commission an “unqualified opinion,” as the SEC tries to uphold transparency, accountability and efficiency in the use of valuable taxpayers’ money.
Source: https://business.mb.com.ph/2019/07/12/coa-gives-sec-good-housekeeping-mark/
DOF chief wants BOC ‘strike team’ vs foreign trash shipments [Philippine Daily Inquirer, July 11, 2019]
Finance Secretary Carlos G. Dominguez III has ordered the Bureau of Customs (BOC) to form a strike team to stop the entry of garbage from foreign countries into Philippine ports.
Source: https://business.inquirer.net/274422/dof-chief-wants-boc-strike-team-vs-foreign-trash-shipments
BIR seeking P3B more from online casino workers as firms say foreigners already residents [Philippine Daily Inquirer, July 11, 2019]
The Bureau of Internal Revenue (BIR) has issued a new batch of notices to collect another P3 billion in personal income taxes from foreign, mostly Chinese, workers in Philippine offshore gaming operations (Pogo) even as firms sought to pay lower tax rates by claiming that their employees were already Philippine “residents.”
Online casinos to top call centers as space users [Manila Bulletin, July 11, 2019]
Online casinos in the Philippines that employ tens of thousands of foreign workers are set to surpass call centers as Manila’s top new office space users.
Source: https://business.mb.com.ph/2019/07/11/online-casinos-to-top-call-centers-as-space-users/
SEC drafting rules for incorporators [Manila Bulletin, July 11, 2019]
The Securities and Exchange Commission (SEC) is drawing up new guidelines govern the organization of corporations by individuals, corporations, partnerships and associations.
Source: https://business.mb.com.ph/2019/07/11/sec-drafting-rules-for-incorporators/
PEZA has P23M in uncollected fees – COA [Philippine Daily Inquirer, July 10, 2019]
The Philippine Economic Zone Authority (PEZA) was unable to collect P23.75 million worth of permits, inspection, and administration fees because it did not properly enforce its policies, the Commission on Audit (COA) said.
Source: https://business.inquirer.net/274362/peza-has-p23m-in-uncollected-fees-coa
DOF orders BOC, BIR to keep ‘tight watch’ over increasing illegal cigarette trade [Philippine Daily Inquirer, July 10, 2019]
“Bantayan n’yo ‘yan (Keep a tight watch over that).”
This was Finance Secretary Carlos G. Dominguez III’s order to the country’s two biggest revenue agencies amid expectations of a further increase in illicit cigarette trade once higher excise taxes kick in next year under the new “sin” tax reform measure just awaiting President Duterte’s signature.
PEZA seeks exemption for 8 cities from AO 18 coverage [Manila Bulletin, July 10, 2019]
Eight cities in Metro Manila with nothing or less IT Parks and Centers maybe exempted from the coverage of Administrative Order (AO) 18, which imposes a moratorium on the proclamation and approval of these special ecozones in the metropolis.
Source: https://business.mb.com.ph/2019/07/10/peza-seeks-exemption-for-8-cities-from-ao-18-coverage/
If you wish to get a copy of the complete text of these issuances, please send us an email thru taxseminars@dmdcpa.com.ph.
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