Estate tax amnesty okd

24-March-2017, 01:29:54 PM [http://www.congress.gov.ph ]
The House of Representatives has approved on third and final reading a proposal to grant amnesty in the payment of estate taxes.

House Bill No. 4814, or “An Act Granting Amnesty in the Payment of Estate Tax,” is expected to generate additional revenues for the government and encourage taxpayers to settle their outstanding estate taxes, thereby freeing up properties of unsettled estates.

The bill, which was endorsed for plenary approval by the committee on ways and means chaired by Rep. Dakila Carlo Cua (Lone District, Quirino), proposes a tax amnesty program covering estate taxes for the year 2016 and the previous years that have remained unpaid as of December 31, 2016.

House Bill 4814 is authored by Speaker Pantaleon Alvarez (1st District, Davao del Norte), Majority Floor Leader Rodolfo Fariñas (1st District, IlocosNorte), Rep. Arthur Defensor Jr. (3rd District, Iloilo), Deputy Speaker Romero Quimbo (2nd District, Marikina City), Cua, Reps. Arlene Arcillas (1stDistrict, Laguna), Rose Marie Arenas (3rd District, Pangasinan), Lianda Bolilia (4th District, Batangas), Peter John Calderon (7th District, Cebu), Winston Castelo (2nd District, Quezon City), Eugene Michael De Vera (Party-list, ABS), Jesulito Manalo (Party-list, ANGKLA), Victoria Isabel Noel (Party-list, AN WARAY), Xavier Jesus Romualdo (Lone District, Camiguin), Jose Antonio Sy-Alvarado (1st District, Bulacan), Manuel Zubiri (3rd District, Bukidnon), Marlyn Primicias-Agabas (6th District, Pangasinan), Rodante Marcoleta (Party-list, SAGIP), Raul Del Mar (1st District, Cebu), Leo Rafael Cueva (2ndDistrict, Negros Occidental), and Delphine Gan Lee (Party-list, AGRI).

The bill is one of the 186 relevant and important legislative measures passed by the House over the past 83 session days of the 17th Congress.

The bill grants the following immunities and privileges to taxpayers who avail of the tax amnesty: (1) immunity from the payment of estate taxes, civil, criminal, or administrative penalties under the National Internal Revenue Code of 1997, as amended, arising from the failure to pay any and all estate taxes for taxable year 2016 and prior years; (2) the taxpayer’s Estate Tax Amnesty Returns for 2016 and prior years shall not be admissible as evidence in all proceedings that pertain to taxable year 2016 and prior years related to estate settlement cases before any judicial, quasi-judicial, or administrative bodies in which the defendant or respondent, and except for the purpose of ascertaining the gross estate for 2016 and prior years, the same shall not be examined, inquired or looked into by any person or government office; and (3) the books of accounts and other records of the taxpayer for the years covered by the estate tax amnesty availed of shall not be examined.

To avail of the benefits of the tax amnesty, the covered taxpayer shall file with the Bureau of Internal Revenue (BIR) an Estate Tax Amnesty Return and pay the six percent of the decedent’s or deceased person’s net estate within two years from the issuance of the Implementing Rules and Regulations (IRR) of the proposed legislation. The IRR shall be promulgated within 30 days after the law becomes effective.

However, the proposed tax amnesty does not cover taxpayers with pending cases, to wit: (1) those with pending cases falling under the jurisdiction of the Presidential Commission on Good Government (PCGG); (2) those cases involving unexplained wealth or unlawfully acquired wealth or under the Anti-Graft and Corrupt Practices Act; (3) those cases filed in court involving violation of the Anti-Money Laundering Law; (4) those criminal cases for tax evasion and other criminal offenses under Chapter II of Title X of the National Internal Revenue Code of 1997, as amended, and the felonies of frauds, illegal exactions and transactions, and malversation of public funds and property under Chapters III and IV of Title VII of the Revised Penal Code; and (5) tax cases subject to final and executor judgement by the courts.

The bill imposes the following penalties: (1) a person who, having filed a statement or Estate Tax Amnesty Return, wilfully understates the gross estate to the extent of 30 percent or more shall be subject to the penalties of perjury under the Revised Penal Code; (2) the willful failure to declare any property in the statement and/or in the Estate Tax Amnesty Return shall be deemed prima facie evidence of fraud and shall constitute a ground upon which attachment of such property may be issued in favor of the BIR to answer for the satisfaction of any judgment that may be acquired against the declarant; (3) any person who unlawfully discloses the existence of an Estate Tax Amnesty Return, or its contents, shall be penalized by a fine of not less than P150,000 and imprisonment of not less than six years but not more than 10 years.

It further provides that if the offender is an officer or employee of the BIR or any government entity, he shall suffer the additional penalties of perpetual disqualification from holding public office, from exercising the right to vote and be voted for any public elective post.

Tax amnesty, as defined by the Supreme Court, is a “general pardon or the intentional overlooking by the state of its authority to impose penalties on persons otherwise guilty of violation of a tax law.”

Simply put, taxpayers who failed to disclose their income or pay their tax liabilities from previous years are freed by the government from any civil, criminal or administrative penalties.

The bill has already been transmitted to the Senate for its concurrence. / ABR

Donor’s tax rate reduction in the offing

25-March-2017, 01:03:13 PM [http://www.congress.gov.ph ]
The House of Representatives recently approved on third and final reading a bill which seeks to reduce the existing donor’s tax rate and ensure fair taxation.

House Bill No. 4903 aims to simplify the donor’s tax rate, thus amending for the purpose Section 99 of the National Internal Revenue Code of 1997, as amended.

Under the bill, Section 99 (A) of the National Internal Revenue Code of 1997, as amended, is further amended to read as follows:

“A) In General. – The tax for each calendar year shall be six percent and shall be computed on the basis of the total net gifts made during the calendar year: Provided, that annual net gifts not exceeding P100,000 shall be exempt.”

Under the present law, if the net gift is:

- Not over P100,000, the tax shall be exempt
- Over P100,000 but not over P200,000, the tax shall be 0 plus two percent of the excess over P100,000.
- Over P200,000 but not over P500,000, the tax shall be P2,000 plus four percent of the excess over P200,000.
- Over P500,000 but not over P1,000,000, the tax shall be P14,000 plus six percent of the excess over of P500,000.
- Over P1,000,000 but not over P3,000,000, the tax shall be P44,000 plus eight percent of the excess over P1,000,000.
- Over P3,000,000 but not over P5,000,000, the tax shall be P204,000 plus 10 percent of the excess over P3,000,000.
- Over P5,000,000 but not over P10,000,000, the tax shall be P404,000 plus 12 percent of the excess over P5,000,000.
- Over P10,000,000, the tax shall be P1,004,000 plus 15 percent of the excess of P10,000,000.

The bill amends Section 99 (B) of the National Internal Revenue Code of 1997 to read as follows: “(B) Tax Payable by Donor if Donee is a Stranger. – When the done or beneficiary is a stranger, the tax payable by the donor shall be six percent of the net gifts. For the purpose of this tax, a “stranger” is a person who is not a:

(1) Brother, sister (whether by whole or half-blood), spouse, ancestor and lineal descendant; or
(2) Relative by consanguinity in the collateral line within the fourth degree of relationship.”

The present law states the tax payable by the donor when the donee or beneficiary is a stranger shall be 30 percent of the net gifts.

Rep. Jesulito Manalo (Party-list, ANGKLA), an author of the bill, said the reduction of the donor’s tax intends to strike a balance between the power of the State to tax its people and the implementation of a policy that will motivate those who have more in life to share their properties and riches not only to the less fortunate classes of society, but also to individuals whose lives may improve through such donations.

“Verily, most donors are dissuaded from giving off their properties for fear that they will have to be accountable to pay enormous amounts of taxes, if they do. Further, in extreme cases, donors merely circumvent the payment of the donor’s tax by cloaking their donation through a sale transaction. This renders the donor’s taxation system rather ineffective,’’ said Manalo.

Other authors of the bill are Reps. Robert Ace Barbers (2nd District, Surigao del Norte), Dakila Carlo Cua (Lone District, Quirino), Peter John Calderon (7th District, Cebu), Victoria Isabel Noel (Party-list, AN WARAY), Rodante Marcoleta (Party-list, SAGIP), House Speaker Pantaleon Alvarez, Majority Leader Rodolfo Fariñas, Reps. Deogracias Victor Savellano (1st District, Ilocos Sur), and Leopoldo Bataoil (2nd District, Pangasinan). / mvip

Revenue Regulations (RRs)
are issuances signed by the Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, that specify, prescribe or define rules and regulations for the effective enforcement of the provisions of the National Internal Revenue Code (NIRC) and related statutes

Revenue Memorandum Orders (RMOs) are issuances that provide directives or instructions; prescribe guidelines; and outline processes, operations, activities, workflows, methods and procedures necessary in the implementation of stated policies, goals, objectives, plans and programs of the Bureau in all areas of operations, except auditing.

Revenue Memorandum Rulings (RMRs) are rulings, opinions and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax laws, as applied to a specific set of facts, with or without established precedents, and which the Commissioner may issue from time to time for the purpose of providing taxpayers guidance on the tax consequences in specific situations. BIR Rulings, therefore, cannot contravene duly issued RMRs; otherwise, the Rulings are null and void ab initio

Revenue Memorandum Circular (RMCs) are issuances that publish pertinent and applicable portions, as well as amplifications, of laws, rules, regulations and precedents issued by the BIR and other agencies/offices.

Revenue Bulletins (RB) refer to periodic issuances, notices and official announcements of the Commissioner of Internal Revenue that consolidate the Bureau of Internal Revenue's position on certain specific issues of law or administration in relation to the provisions of the Tax Code, relevant tax laws and other issuances for the guidance of the public.

BIR Rulings are official position of the Bureau to queries raised by taxpayers and other stakeholders relative to clarification and interpretation of tax laws.