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Comparison between Estate Tax and Donor’s Tax

As to Estate Tax Donor’s Tax

BIR Form BIR form 1801 BIR form 1800

Deadline for filing and Decedent died before 2018: within Shall be filed within 30 days after
payment 6 months after death the date the gift is made or
completed and the tax due thereon
shall be paid at the same time that
Decedent died on or after Jan. 1, the return is filed.
2018 (TRAIN Law): within 1 year
from date of death
Extension: Extension of the period
to file and pay the donor's tax
Extension: The Commissioner or return is not allowed.
his/her duly authorized
representative, shall have the
authority to grant, in meritorious
cases, a reasonable extension, not
exceeding thirty (30) days, for filing
the return

When imposed? Upon the death of the owner Imposed on the exercise of the
notwithstanding the postponement donor`s right during lifetime to
of the actual possession or transfer property to others in the
enjoyment of the estate by the form of gift.
beneficiary.

Taxpayer The “estate” of the decedent as a The person making the donation
juridical person (donor) is liable to pay the
donations tax

Who actually pays the Primary liable: Administrator or The donor or giver who is bound to
tax? executor pay the tax, however, if the donor
fails to pay the tax within the
payment period, the donor and
Secondary liable: any of the heirs donee are jointly and severally
liable.

Exemption/s and/or Exemptions: Exemptions and/or Deductions


from Gross Gift:
Deduction/s a. Under Section 85 and 86, NIRC -Encumbrances on the property
donated assumed by the donee
-Capital or exclusive property of the
surviving spouse -Diminution of gift provided by the
donor
-Properties outside the Philippines
of a NRA decedent -Gifts to the government

-Intangible personal property in the -Gifts to educational, charitable,


Philippines of NRA when the rule of religious corporations etc.
reciprocity applies

Exemptions under Special Laws:


b. Under Section 87, NIRC
-International Rice Research
-The merger of the usufruct (right Institute
to use) in the owner of the naked
-Ramon Magsaysay Foundation
title
-Integrated Bar of the Philippines
-The transmission from the first
heir, legatee or donee in favor of -Development Academy of the
another beneficiary in accordance Philippines
with the will of the predecessor
-National Museum
-The transmission or delivery of the
inheritance or legacy of the -National Library
fiduciary heir or legatee to the -Archives of the National Historical
fideicommissary Institute
-All bequests, devices, legacies or -Museum of Philippine Costumes
transfers to social welfare, cultural
and charitable institutions -Intramuros Administration

c. Under Special Laws

-Proceeds of life insurance and


benefits received by members of
the GSIS

-Benefits received by members


from the SSS by reason of death

-Amounts received from Philippines


and United States governments for
war damages

-Amounts received from United


States Veterans Administration

-Benefits received from the


Philippines and US government for
damages suffered during WW2

-Retirement benefits of
officials/employees of a private
firm

-Payments from the Philippines of


US government to the legal heirs of
deceased of WW2 Veterans and
deceased civilians for
supplies/services furnished to the
US and Philippine Army

-Proceeds of life insurance under a


group insurance taken out by
employer (not taken out upon his
life)

-Transfers by way of bona fide sales

-Transfer of property to the


National Government or to any of
its political subdivisions

-Personal Equity and Retirement


Account (PERA) assets of the
decedent-contributor

Deductions:

1. Ordinary Deductions

-Losses

-Indebtedness

-Taxes

2. Transfer for public use

3. Vanishing deductions (property


previously taxed)
Special Deductions:

1. Standard deduction

2. Family Home Allowance

3. Amount received by heirs under


R.A. 4917

Tax Rate 6% 6%

Tax Base The 6% is based on the value of the The 6% is based on the value of the
net estate. net taxable gift (in excess of
P250,000) exempt gift made during
the calendar year, regardless of the
The estate tax is based on the laws relationship between the donor and
in force at the time of death the donee.
notwithstanding the postponement
of the actual possession or
enjoyment of the estate by the Fair market value of the total net
beneficiary gifts made by a donor during the
calendar year

Can you avail of Tax Section 6 of RA 11213 states that Section 19 of the Tax Amnesty Act
Amnesty? How? estate administrators, lawful heirs, provides that any person, natural or
or beneficiaries have two years or juridical, who wishes to avail of the
until June 15, 2021 to avail of the Tax Amnesty on Delinquencies shall,
estate tax amnesty. Under RA within one (1) year from the
11569, the new deadline for the effectivity of its Implementing Rules
filing of estate tax amnesty returns and Regulations (IRR), file with the
was set on June 14, 2023 appropriate office of the BIR, which
has jurisdiction over the residence
or principal place of business of the
1. Prepare the sworn ETA Return taxpayer, a sworn Tax Amnesty on
Delinquency Return accompanied
2. File the sworn ETA return by a Certification of Delinquency.
3. Secure an Acceptance Payment
from the RDO

4. Pay the amnesty estate tax

5. Submit the acceptance payment


form and sworn ETA return to the
RDO
Penalties and surcharges Violations of the estate tax Failure to file and pay donor's tax is
provisions are subject to the subject to penalties – 25% surcharge
applicable common penalties (50% if fraudulent), 20% interest,
prescribed under Title X (Statutory and compromise penalties ranging
Offenses and Penalties) of the from P200.
NIRC, as amended

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