Estate Tax Payable PDF

DEPARTMENT OF ACCOUNTANCY HOLY ANGEL UNIVERSITY ESTATE TAX PAYABLE  EXCLUSIVE CONJUGAL/ TOTAL COMMUNAL GROSS ESTATE P XXX P XXX P XXX Less: ORDINARY DEDUCTIONS (XXX)...

DEPARTMENT OF ACCOUNTANCY HOLY ANGEL UNIVERSITY ESTATE TAX PAYABLE  EXCLUSIVE CONJUGAL/ TOTAL COMMUNAL GROSS ESTATE P XXX P XXX P XXX Less: ORDINARY DEDUCTIONS (XXX) (XXX) (XXX) Estate after Deductions XXX XXX XXX Less: SPECIAL DEDUCTIONS (XXX) NET ESTATE XXX Less: SHARE OF SURVIVING SPOUSE *1/2 (XXX) NET TAXABLE ESTATE XXX Determination of Foreign Tax Credit Foreign Net Taxable Estate X Philippine Estate Tax Due World Net Taxable Estate 1. Single Foreign Country 2. Multiple Foreign Country  ESTATE TAX REQUIREMENTS 1. Estate Tax Return 2. Certified Public Accountant (CPA) Certification The Estate Tax Return and its Contents The executor, administrator or any of the heirs shall file in duplicate an estate tax return under oath, setting forth the following: a. Value of gross estate at the point of death or, in case of non-resident alien, that part of his gross estate situated in the Philippines b. Itemized Deductions from Gross Estate c. The amount of tax due whether paid or still due and outstanding  CPA CERTIFICATION Where the value of the gross estate exceeds P5,000,000, the return shall be accompanied by a statement certified by a Certified Public Accountant. Content: 1. Itemized assets of the decedent with their corresponding gross value at the time of death or, in the case of a non-resident decedent, that part of his gross estate situated in the Philippines 2. Itemized deductions from gross estate 3. The amount of tax due whether paid or still due and outstanding Deadline of Filing the Estate Tax Return One year after the date of death Extension: the CIR is authorized to grant, in meritorious cases, a reasonable extension not exceeding 30 days for filing return Venue of Filing Estate Tax Return For resident decedents: RDO where the decedent is domiciled at the date of his death For non-resident decedents: RDO where the executor or administrator is registered.if not registered, the RDO having jurisdiction of the decedent’s legal residence  Where to File the Estate Tax Return? 1. Accredited Agent Bank 2. Revenue District Office 3. Collection Agent 4. Duly Authorized Treasurer of the City or Municipality in which the decedent or administrator was domiciled at the time of his death 5. Office of the Commissioner, if the administrator or executor has no legal residence in the Philippines Payment of Estate Tax Shall be paid at the time the return is filed following the rule, “pay as you file”. Insufficiency of Cash to Pay Tax If there is difficulty in paying the tax, the same may be settled by: a. Installment payment b. Partial disposition of estate Installment Payment The estate tax may be paid in installment within TWO YEARS without the imposition of interest or civil penalties Subject to approval of the CIR, the estate tax may be paid as follows: a. 24 monthly payments b. 8 quarterly payments c. 4 semi-annual payments d. 2 annual payments Partial Disposition A written request shall be filed, together with a notarized undertaking that the proceeds thereof shall be exclusively used for the payment of estate tax due Failure to pay the total estate tax due out from the proceeds of said disposition, the estate tax due shall be immediately due and demandable subject to the applicable penalties and interest reckoned from the prescribed deadline of filing the return. Liability for Payment of the Estate Tax The estate tax shall be paid by the executor or administrator before delivery to any heir of his distributive share of the estate. Where there are two or more executors or administrators, all of them shall be severally liable for the payment of tax. The heir or beneficiary has subsidiary liability for the value of the total net asset The extent of liability shall in no case exceeds the value of the beneficiary’s share in the inheritance. Discharge of executor or administrator from Personal Liability The executor or administrator shall make a written application for the commissioner of the amount of the estate tax and discharge from personal liability. The executor or administrator, upon payment of the amount of which he is notified, shall be discharged from personal liability for any deficiency in the tax thereafter found to be due and shall be entitled to a receipt in writing showing such discharge If after the payment of the estate tax, new obligations of the decedent shall appear, and the persons interested shall have satisfied them by order of the court, they shall have a right to the resitution of the proportional part of the tax paid References Business and Transfer Taxation 2019 edition by Rex Banggawan CPA Reviewer in Taxation 2018 edition by Enrico D. Tabag Reviewer in Taxation by Asser S. Tamayo CPAR RESA