Take Advantage of the Estate Tax Amnesty Extension: Your Opportunity to Settle Unpaid Estate Taxes
The Estate Tax Amnesty, which was first introduced under Republic Act No. 11213 in 2019, has provided individuals with a unique opportunity to settle unpaid estate taxes with minimal consequences. With the enactment of Republic Act No. 11956, the deadline for availing the estate tax amnesty was extended until June 14, 2025. This may be the final extension, making it crucial for heirs and estate administrators to act swiftly and resolve their pending tax liabilities.
This extension is a significant relief for families and heirs of individuals who passed away on or before May 31, 2022, whose estates have unpaid taxes. It provides a chance to clear the financial obligations related to estate taxes without the burden of accumulating penalties and interest. Under the new law, you can settle the tax liabilities either through manual or electronic filing, ensuring that the process is convenient and accessible.
Here are some key points to remember:
Amnesty Coverage: The estate tax amnesty now covers estates of decedents who passed away on or before May 31, 2022. This extension applies to all unpaid estate taxes as of that date.
Immunity from Penalties: Once you settle the estate taxes under this amnesty, you will be immune from any penalties, including civil, criminal, and administrative charges related to unpaid estate taxes for the years leading up to May 31, 2022.
Installment Payments: Taxpayers can now pay their estate taxes in installments over two years, offering more flexibility and easing the financial burden of full payment at once.
Simplified Requirements: The Bureau of Internal Revenue (BIR) has reduced the number of documents required for filing the application. You can submit the necessary documents like the decedent’s Death Certificate, Taxpayer Identification Numbers (TIN), and government-issued IDs of the heirs or executor. If certain documents are unavailable, the BIR may accept alternative documentation.
No More Civil Penalties: By availing of the estate tax amnesty, taxpayers will be exempted from additional taxes, interest, and penalties that might have accrued due to delay or non-payment of estate taxes.
Increased Coverage: With the extension, more estates are eligible to benefit from the amnesty, particularly those whose taxes remained unpaid as of May 31, 2022.
This amnesty presents an excellent opportunity for taxpayers who have pending estate tax liabilities to clear their obligations and avoid the costly consequences of non-compliance. If the taxpayer is unable to avail of the amnesty, he or she will be subject to the estate tax rate at the time of the decedent’s death (if the decedent died before December 31, 2017, the tax rate could go as high as 20%(!) of the Net Estate). This has yet to include all the interests and penalties that have accrued since then. If the taxpayer is able to avail of the amnesty, he or she will be be able to settle the taxes at 6% of the net estate value at the time of the decedent’s death.
It is essential to take action before the June 14, 2025 deadline to maximize the benefits of this amnesty. For more information or assistance, we encourage you to consult with legal or tax professionals who can help guide you through the application process.
If you have any questions about these new estate tax regulations or need assistance in complying with the updated tax rules, feel free to reach out to us at contact@dulaylaw.com or contact us at +63.917.520.4829. Our team is ready to provide guidance and support tailored to your needs.
Don’t miss out on this opportunity to settle your estate taxes and avoid further complications. Act now, and make use of this limited-time extension to ensure that your estate is fully compliant with tax laws.
