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BIR to finalize rules governing tax amnesty this month

[ bworldonline.com ]
PHILIPPINE STAR/KRIZJOHN ROSALES
THE Bureau of Internal Revenue (BIR) is set to finalize the revenue regulations (RR) covering the tax amnesty this month after making the rounds of public consultations.

“The BIR conducted public consultations to discuss the proposed Revenue Regulations (RR) to implement the provisions of Republic Act (RA) 11213 relative to the Estate Tax Amnesty,” the BIR said in a statement on Monday.

“It is expected that the final estate tax regulation will be issued within this month,” according to BIR.

Section 2a of RA 11213 which was signed into law by President Rodrigo R. Duterte on Feb. 14, authorizes the government to “provide a one-time opportunity to settle estate tax obligations through an estate tax amnesty program that will give reasonable tax relief to estates with deficiency estates taxes.”

Under the proposed RR, only the estates of persons who died on or before Dec. 31, 2017 are to be covered by the estate tax amnesty, with the rate set at 6% with a minimum tax amnesty amount of P5,000 on each decedent’s total net taxable estate at the time of death without penalty at every stage of transfer of property.

Delinquent estate tax liabilities which are final and executory in which the tax amnesty on delinquencies may be applied and properties which are involved in legal cases in courts are not covered by the estate tax amnesty.

The estate shall be valued at fair market value (FMV) at time of death, with the value of real property reckoned at whichever is higher of the zonal value as determined by the Commissioner or the FMV as stated on the schedule of values set by the provincial or city assessor.

The proposed regulations give taxpayers two years starting with the effectivity of the finalized RR, to file the Estate Tax Amnesty Return (ETAR) or BIR Form No. 2118-EA in three copies at the Revenue District Office (RDO) having the jurisdiction over the decedent’s last residence.

In the absence of a legal residence, the return shall be filed with RDO 039 — South Quezon City, as stated on the proposed RR.

Package 1B of the Comprehensive Tax Reform Program (CTRP) includes the provision of an estate tax amnesty, a tax amnesty on delinquencies, and a general tax amnesty, which are all outlined Section 2 of the RA 11213.

Mr. Duterte, however, vetoed RA 11213’s provision on general tax amnesty, saying that the Philippines needs first to ease its bank secrecy law to avoid fraud.

Legislators have yet to re-file a measure calling for a general tax amnesty that addresses the veto concerns.

The tax amnesty on delinquencies started being implemented on April 24.

The Department of Finance has said that it hopes other packages of the CTRP will be passed into law within two years, helping the country achieve a credit rating of “A.” — Reicelene Joy N. Ignacio
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KNOWING YOUR BIR REGULATIONS AND ISSUANCES

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.
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