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Title: Estate and Donor's Tax
Description: Estate and Donor's Tax encoded notes
Description: Estate and Donor's Tax encoded notes
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Chapter II
ESTATE AND DONOR’S TAXES115
A
...
Taxpayer and Tax Base
The estate tax is imposed on the transfer of the decedent’s estate
to his lawful heirs and beneficiaries based on the fair market value of
the net estate at the time of the decedent’s death
...
It is a tax imposed on the privilege of transmitting property
upon the death of the owner
...
2
...
Gross estate
EO 22
The value of the gross estate of the decedent includes the
value at the time of his death of all property, real or personal,
tangible or intangible, wherever situated
...
116
Sec
...
Guide to Philippine Taxes
77
Chapter II
Estate and Donor’s Taxes
In the case of a nonresident decedent who at the time of
his death was not a citizen of the Philippines, only that part of the
entire gross estate situated in the Philippines is included in the taxable
estate
...
The following are excluded from the gross estate:119
(1) GSIS proceeds/ benefits
117
No estate tax shall be collected in respect of intangible personal property if
(a) the decedent at the time of death was a citizen and resident of a foreign country
which did not impose a transfer tax of any character, in respect of intangible personal
property of citizens of the Philippines not residing in that foreign country; or (b) if the
laws of the foreign country of which the decedent was a citizen or resident allows a
similar exemption from transfer or death taxes of every character in respect of intangible
personal property owned by citizens of the Philippines not residing in that foreign
country
...
104, NIRC)
...
85(a) to (g), supra
...
bir
...
ph/taxinfo/tax_estate
...
Guide to Philippine Taxes
Chapter II
Estate and Donor’s Taxes
(2) Accruals from SSS
(3) Proceeds of life insurance where the beneficiary is
irrevocably appointed
(4) Proceeds of life insurance under a group insurance
taken by employer (not taken out upon his life)
(5) War damage payments
(6) Transfer by way of bona fide sales
(7) Transfer of property to the National Government or
to any of its political subdivisions
(8) Separate property of the surviving spouse
(9) Merger of usufruct in the owner of the naked title
(10) Properties held in trust by the decedent
(11) Acquisition and/or transfer expressly declared as not
taxable
(12) Personal Equity and Retirement Account (PERA)
assets of the decedent-contributor
...
Net estate121
The net estate is determined by deducting from the value122
of gross estate the total amount of allowable deductions
...
121
Sec
...
122
The computation for estate tax purposes of real properties shall be based on
the zonal value or the value as shown in the schedule of market values prepared by the
Provincial or City Assessors whichever is higher
...
88(b), supra
...
Deductions
(1) In the case of citizens or residents of the Philippines123
(a) Expenses, losses, indebtedness, and taxes consisting of;
(i) Actual funeral expenses or five percent (5%) of
the gross estate, whichever is lower, but not exceeding
Two Hundred Thousand Pesos (PhP200,000
...
(b) Value of property previously taxed (estate or donor’s tax),
under certain conditions
...
(d) Current fair market value of the decedent’s family home
...
Also, said family home must have been the
123
80
Sec
...
Guide to Philippine Taxes
Chapter II
Estate and Donor’s Taxes
decedent’s family home as certified by the barangay
captain of the locality
...
(f) Medical expenses not exceeding Five Hundred Thousand
Pesos (PhP500,000
...
(g) Amount received by heirs under RA 4917124 (retirement
benefits of employees of private firms) provided such
amount is included in the gross estate of the deceased
...
(2) In the case of a nonresident not a citizen of the
Philippines125
(a) That portion of the funeral expenses, losses and
indebtedness, and taxes which the value of the decedent’s
gross estate situated in the Philippines bears to his entire
gross estate wherever situated;
(b) Value of
property
previously taxed, under
certain conditions, if part of decedent’s gross estate is
situated in the Philippines;
(c) Transfers to or for the use of the Philippine Government
or any political subdivision thereof, exclusively for public
purposes; and
124
An Act Providing that Retirement Benefits of Employees of Private Firms
Shall Not Be Subject to Attachment, Levy, Execution, or Any Tax Whatsoever
...
Guide to Philippine Taxes
81
Chapter II
Estate and Donor’s Taxes
(d) The net share of the surviving spouse in the
conjugal partnership property as diminished by the
obligations properly chargeable to such property
...
Exemptions126
The following shall not be taxed:
(1) The merger of usufruct in the owner of the naked title;
(2) The transmission or delivery of the inheritance or legacy by
the fiduciary heir or legatee to the fideicommissary;
(3) The transmission from the first heir, legatee, or donee in favor
of another beneficiary, in accordance with the desire of the
predecessor; and
(4) All bequests, devises, legacies or transfers to social welfare
cultural or charitable institutions, no part of the net income of
which inures to the benefit of any individual, provided that not
more than 30% of said bequests, devises, legacies or transfers
shall be used for administration purposes
...
Rates of Estate Tax 127
If The Net Estate Is
Over
But Not Over
PhP 200,000
500,000
2,000,000
5,000,000
10,000,000
82
PhP 200,000
500,000
2,000,000
5,000,000
10,000,000
And Over
126
Section 87, supra
...
The Tax Shall
Be
Exempt
0
PhP 15,000
135,000
465,000
1,215,000
Plus
5%
8%
11%
15%
20%
Of Excess
Over
PhP 200,000
500,000
2,000,000
5,000,000
10,000,000
Guide to Philippine Taxes
Chapter II
Estate and Donor’s Taxes
4
...
Persons required to file notice of death
A written notice of death to the Commissioner of Internal
Revenue shall be filed by the executor, administrator or any of the
legal heirs, as the case may be, within two (2) months after the
decedent’s death, or within a like period after qualifying as such
executor or administrator, in all cases of transfers subject to tax, or
where, though exempt from tax, the gross value of the estate exceeds
Twenty Thousand Pesos (PhP20,000)
...
Persons required to file estate tax returns 130
The estate tax return shall be filed by the executor or
administrator, or any of the legal heirs, in cases of transfers subject
to estate tax, or where though exempt from estate tax, the gross
value of the estate exceeds Two Hundred Thousand Pesos
(PhP200,000
...
The
BIR shall then issue the necessary clearance for the registration of document transmitting
ownership of landowner’s compensation to the heir/s
...
[Joint Department of
Agrarian Reform (DAR)-Department of Finance (DOF)-Department of Justice (DOJ)LBP Administrative Order (AO) No
...
129
Section 89, supra
...
Guide to Philippine Taxes
83
Chapter II
Estate and Donor’s Taxes
condition precedent for the transfer of ownership thereof in the
name of the transferee
...
c
...
The Commissioner shall have the
authority to grant, in meritorious cases a reasonable extension
not exceeding thirty (30) days for filing the return
...
Place of filing 132
The return shall be filed with an authorized agent bank,
Revenue Collection Officer or duly authorized Treasurer of the
City or municipality in the Revenue District Office having
jurisdiction over the place of domicile of the decedent at the time
of his death
...
For non-resident decedent with no executor or administrator in
the Philippines, the estate tax return shall be filed with the AAB
under the jurisdiction of RDO 39–South Quezon City
...
132
Section 90(D), supra
...
84
Guide to Philippine Taxes
Chapter II
Estate and Donor’s Taxes
e
...
The Commissioner
may grant extension of time not exceeding five (5) or two (2)
years depending on whether the estate was settled judicially or
extrajudicially
...
There shall, therefore, be as many clearances
(Certificate Authorizing Registration) as there are as many
properties released because they have been paid for by the
installment payments of the estate tax
...
Any amount paid after the statutory due
date of the tax shall be imposed the corresponding applicable
penalty thereto
...
135
f
...
134
Sec
...
135
Sec
...
Guide to Philippine Taxes
85
Chapter II
Estate and Donor’s Taxes
B
...
Taxpayer and Tax Base
The donor’s tax is imposed on the transfer by any person,
resident or nonresident, of property by gift
...
a
...
In case of a
nonresident alien, his real and personal property so transferred
but which are situated outside the Philippines are not included
as part of the gross gift
...
98, op
...
The donations subject to donor’s tax are donations inter vivos
or those made between living persons to take effect during the lifetime of the donor
...
[ Articles 728, 729, and 734, New Civil Code as cited in Hector S
...
al
...
I, 8th Ed
...
619]
...
Guide to Philippine Taxes
Chapter II
Estate and Donor’s Taxes
(4) Shares, obligations, or bonds issued by any foreign
corporation if such shares, obligations, or bonds have
acquired a business situs in the Philippines; and
(5) Shares or rights in any partnership, business or industry
established in the Philippines, which are to be considered
as situated in the Philippines
...
b
...
00;
(b) Gifts made to or for the use of the National Government
or any entity created by any of its agencies which is not
138
Section 101, supra
...
(2) In case of gifts made by a nonresident alien of the
Philippines:
(a) Gifts made to or for the use of the National Government
or any entity created by any of its agencies which is not
conducted for profit, or to any of its political subdivisions;
and
(b) Gifts in favor of an educational and/or charitable,
religious, cultural or social welfare corporation,
institution, foundation, trust or philanthropic organization
or research institution or organization, provided that not
more than 30% of said gifts shall be used by the recipient
for administrative purposes
...
Donor’s Tax Rates
139
a
...
Guide to Philippine Taxes
Chapter II
Estate and Donor’s Taxes
If the Net Gift is
Over
But Not Over
PhP 100,000
200,000
500,000
1,000,000
3,000,000
5,000,000
10,000,000
The tax
shall be
PhP 100,000
200,000
500,000
1,000,000
3,000,000
5,000,000
10,000,000
-
Exempt
0
PhP 2,000
14,000
44,000
204,000
404,000
1,004,000
Plus
2%
4%
6%
8%
10%
12%
15%
Of Excess
Over
PhP 100,000
200,000
500,000
1,000,000
3,000,000
5,000,000
10,000,000
b
...
c
...
140
4
...
Filing and contents of returns
A return is required in all cases of transfers by gift except
those which are exempt under the NIRC, and shall set forth:
each gift made during the calendar year which is to be included
in computing net gifts; the deductions claimed and allowable; any
140
Section 13, RA 7166 (entitled “An Act Providing For Synchronized National
and Local Elections and for Electoral Reforms, Authorizing Appropriations Therefor, and
for Other Purposes,” approved on November 26, 1991) and Rule 3, Section 3, Commission
on Elections’ (COMELEC) Resolution No
...
141
Section 103, supra
...
b
...
In case of gifts made by
a non-resident, the return may be filed with the Philippine
embassy or Consulate in the country where the donor is
domiciled at the time of the transfer, or directly with the office
of the Commissioner
Title: Estate and Donor's Tax
Description: Estate and Donor's Tax encoded notes
Description: Estate and Donor's Tax encoded notes