Question & AnswerQ&A (Republic Act No. 83)
Republic Act No. 83 amends certain sections of Commonwealth Act No. 466, particularly Title III, to amend the provisions on inheritance and gift taxes in the Philippines.
The surviving spouse or a legitimate, recognized natural, or adopted child who is a citizen or resident of the Philippines has an exemption of up to three thousand pesos from inheritance tax on their share.
Strangers are taxed at the same rates as subsection (a) with an increase of four hundred percent.
Strangers are those relatives by consanguinity of the seventh or more remote degree in the collateral line and all relatives by affinity except the spouse and those relatives mentioned in subsection (d).
They must submit periodic reports of the administration and use of the property to the Collector of Internal Revenue within twenty days after a demand is made.
Gift taxes are due and payable on or before the fifteenth day of May following the close of the calendar year.
Dowries or gifts made on account of marriage and before its celebration or within one year thereafter by parents to each of their legitimate, recognized natural, or adopted children are exempt up to the first ten thousand pesos.
The tax is increased by one hundred and fifty percent over the rates fixed for closer relatives as stated in subsection (a).
Real estate and tangible personal property in the Philippines; franchises exercisable in the Philippines; shares, obligations, or bonds issued by Philippine corporations or foreign corporations with significant Philippine business presence; shares or rights in partnerships or businesses established in the Philippines; and any personal property located in the Philippines.
A resident's intangible personal property transmission is subject to tax regardless of location, while a nonresident may be exempt if the foreign country imposes no similar tax or grants reciprocal exemptions to Philippine citizens.
They are taxed at the rates fixed in subsection (a) on amounts up to two thousand pesos (for domestic servants) or five thousand pesos (for trusted employees), and the higher rates prescribed for strangers on the excess.
The tax shall be based on the value of the property less the value of the usufruct, use, habitation, or annuity as determined by the law.
The schedules range from 2% on amounts up to 10,000 pesos, progressively increasing through several brackets up to 17% on amounts exceeding one million pesos.
They must submit reports to the Collector of Internal Revenue from time to time, and within twenty days after a demand by the Collector.