What's in the estate tax amnesty?
The estate tax amnesty covers the estate of all those who died on or before December 31, 2017. If you inherited beginning January 1, 2018, keep in mind the one-year deadline for filing your estate tax returns especially since the period will not be covered by the estate tax amnesty!
Taxpayers only need to pay an amnesty tax which is equivalent to 6% of the estate's value at the person's time of death.
Without the amnesty, the taxpayers would have had to pay an estate tax rate which could have gone as high as 20%. What's more, they would have had to pay surcharge and interest penalties.
To avail of the amnesty, taxpayers only need to file an estate tax amnesty return within two years from the issuance of the implementing rules and regulations. Note that the presumption of correctness for the estate tax amnesty returns has been vetoed by President Rodrigo Duterte. (READ: Duterte vetoes 'overgenerous' general tax amnesty)
If my great-grandfather has an estate but neither my grandparents nor my parents were able to pay the estate tax, do I only have to pay the amnesty tax once?
No. In the version sent to the President, the estate tax amnesty contained a provision regarding the one-time settlement of multiple estates. However, this has been vetoed by the President. According to the veto message, the flat rate of 6% estate amnesty tax, without penalties, is more than a fair imposition already.
This means that, in your case, you will have to pay the estate tax amnesty 3 times – first, from your great-grandfather to your grandparents; second, from your grandparents to your parents; and third, from your parents to you.
Amnesties would not be needed if taxpayers do not miss their deadlines. To help with this, they should attend tax seminars, consultations, or briefings. The Tax Whiz Academy holds free tax seminars monthly at the Philippines' First Tax Hub for SMEs in the Asia-Pacific. For March, the Tax Whiz Academy will be launching a seminar and a help desk on annual ITR filing.
Mon Abrea, popularly known as the Philippine Tax Whiz, is one of the 2017 Outstanding Persons of the World, a Move Awards 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), an Asia CEO Young Leader of the Year, and founding president of the Asian Consulting Group (ACG) as well as the Center for Strategic Reforms of the Philippines (CSR Philippines). Assisting him in his column is JM Miñano, communications associate of ACG. He graduated with a bachelor's degree in Communication Arts from the University of the Philippines Los Baños.