Law Summary
Responsibilities of the Heir, Executor, or Administrator
- Under Section 89 of the National Internal Revenue Code (NIRC) of 1997, the executor, administrator, or legal heir must notify the Commissioner of Internal Revenue of the decedent’s death within two months.
- Estate tax returns must be filed in the following circumstances:
- Whenever the transfer is subject to estate tax.
- When the estate is exempt from estate tax but the gross estate value exceeds Php 200,000.
- Regardless of value, if the estate includes registrable property requiring BIR clearance for ownership transfer (e.g., real property, vehicles, stocks).
- Filing must be done with the Authorized Agent Bank (AAB), Revenue Collection Officer (RCO), or authorized city/municipal treasurer in the RDO with jurisdiction over the decedent’s residence.
- For non-resident decedents with an executor/administrator in the Philippines, the filing is done at the executor’s/administrator’s RDO. If no executor/administrator exists locally, filing is at RDO No. 39 (South Quezon City).
- Executors, administrators, or heirs must complete estate tax returns diligently, properly filling all fields, using "0" to indicate nil values.
- Required documentary submissions are specified in Annexes A-6 and A-6.1 of Revenue Memorandum Order No. 15-2003, along with proof of payment.
Responsibilities of the Revenue District Office (RDO) and Document Processing Division (DPD)
- Estate tax returns are to be processed following procedures prescribed in RMO No. 15-2003.
- Returns exempt from estate tax or returns filed with payment must be properly accomplished to be accepted; improperly filled returns are rejected.
- For returns filed with payment through AABs, the RDO or DPD is tasked with scrutinizing returns to identify missing or incomplete data.
- Upon finding incomplete returns, the DPD must transmit a list to the RDO within five days.
- The RDO must notify the heir/authorized representative in writing within five days upon receipt of the list, requiring amendments within five days of notification.
- Penalties for violations, including compromise penalties under Section 255 of the Tax Code as amended and stipulated in RMO No. 19-2007, will be imposed.
- Additional penalties apply for late filing according to statutory provisions.
Enforcement and Compliance Encouragement
- All internal revenue officials, employees, and concerned parties are mandated to adhere strictly to these guidelines.
- The Circular aims to improve data integrity, enforce proper estate tax return filing, and ensure full compliance with tax laws.