Article 40p. 40

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

(D) Tax Credit for Estate Taxes paid to a Foreign

Country. -

(1) In General. — The tax imposed by this Title shall

be credited with the amounts of any estate tax

imposed by the authority of a foreign country.

(2) Limitations on Credit. — The amount of the

credit taken under this Section shall be subject to

each of the following limitations:

(a) The amount of the credit in respect to the tax

paid to any country shall not exceed the same

proportion of the tax against which such credit is

taken, which the decedent's net estate situated

within such country taxable under this Title bears

to his entire net estate; and

(b) The total amount of the credit shall not exceed

the same proportion of the tax against which

such credit is taken, which the decedent's net

estate situated outside the Philippines taxable

under this Title bears to his entire net estate.

(as amended by RA No 10963)

SEC.

87

Exemption

of

Certain

Acquisitions

and

Transmissions. - The following shall not be taxed:

(A) The merger of usufruct in the owner of the naked title;

(B) The transmission or delivery of the inheritance or

legacy

by

the

fiduciary

heir

or

legatee

to

the

fideicommissary;

(C) The transmission from the first heir, legatee or donee

in favor of another beneficiary, in accordance with the

desire of the predecessor; and

(D) All bequests, devises, legacies or transfers to social

welfare, cultural and charitable institutions, no part of the

net

income

of

which

inures

to the benefit of any

individual: Provided, however, That not more than thirty

percent (30%) of the said bequests, devises, legacies or

transfers

shall

be

used

by

such

institutions

for

administration purposes.

SEC. 88. Determination of the Value of the Estate. -

(A) Usufruct. - To determine the value of the right of

usufruct, use or habitation, as well as that of annuity,

there shall be taken into account the probable life of the

beneficiary in accordance with the latest Basic Standard

Mortality Table, to be approved by the Secretary of

Finance,

upon

recommendation

of

the

Insurance

Commissioner.

(B) Properties. - The estate shall be appraised at its fair

market value as of the time of death. However, the

appraised value of real property as of the time of death

shall be, whichever is higher of -

(1) The fair market value as determined by the

Commissioner; or

(2) The fair market value as shown in the schedule of

values fixed by the Provincial and City Assessors.

SEC. 89. Notice of Death to be Filed. - (as amended by

RA No 10963)

SEC. 90. Estate Tax Returns. -

(A) Requirements. - In all cases of transfers subject to the

tax imposed herein, or regardless of the gross value of the

estate, where the said estate consists of registered or

registrable property such as real property, motor vehicle,

shares of stock or other similar property for which a

clearance

from

the

Bureau

of

Internal

Revenue

is

required as a condition precedent for the transfer of

ownership thereof in the name of the transferee, the

executor, or the administrator, or any of the legal heirs, as

the case may be, shall file a return under oath in

duplicate, setting forth: (as amended by RA No 10963)

(1) The value of the gross estate of the decedent at

the time of his death, or in case of a nonresident, not

a citizen of the Philippines, of that part of his gross

estate situated in the Philippines;

(2) The deductions allowed from gross estate in

determining the estate as defined in Section 86; and

(3) Such part of such information as may at the time

be ascertainable and such supplemental data as

may be necessary to establish the correct taxes.

Provided, however, That estate tax returns showing a

gross

value

exceeding

Five

million

pesos

(P5,000,000) shall be supported with a statement

duly certified to by a Certified Public Accountant

containing the following:

(as amended by RA No 10963)

(a) Itemized assets of the decedent with their

corresponding gross value at the time of his

death, or in the case of a nonresident, not a

citizen of the Philippines, of that part of his

gross estate situated in the Philippines;

(b)

Itemized

deductions

from

gross

estate

allowed in Section 86; and

(c) The amount of tax due whether paid or still

due and outstanding.

(B) Time for Filing. - For the purpose of determining the

estate tax provided for in Section 84 of this Code, the

estate

tax

return

required

under

the

preceding

Subsection (A) shall be filed within one (1) year from the

decedent's death. (as amended by RA No 10963)

A certified copy of the schedule of partition and the order

of the court approving the same shall be furnished the

Commissioner

within

thirty

(30)

days

after

the

promulgation of such order.

(C) Extension of Time. - The Commissioner shall have

authority to grant, in meritorious cases, a reasonable

extension not exceeding thirty (30) days for filing the

return.

(D)

Place

of

Filing.

-

Except

in

cases

where

the

Commissioner otherwise permits, the return required

under Subsection (A) shall be filed with an authorized

agent bank, or Revenue District Officer, Collection Officer,

or duly authorized Treasurer of the city or municipality in

which the decedent was domiciled at the time of his

death or if there be no legal residence in the Philippines,

with the Office of the Commissioner.

SEC. 91. Payment of Tax. -

(A) Time of Payment. - The estate tax imposed by

Section 84 shall be paid at the time the return is filed by

the executor, administrator or the heirs.

(B) Extension of Time. - When the Commissioner finds

that the payment on the due date of the estate tax or of

any part thereof would impose undue hardship upon the

estate or any of the heirs, he may extend the time for

payment of such tax or any part thereof not to exceed five

(5) years, in case the estate is settled through the courts,

or two (2) years in case the estate is settled extrajudicially.

In

such

case, the amount in respect of which the

extension is granted shall be paid on or before the date of

the expiration of the period of the extension, and the

running of the Statute of Limitations for assessment as

provided in Section 203 of this Code shall be suspended

for the period of any such extension.

Where the taxes are assessed by reason of negligence,

intentional disregard of rules and regulations, or fraud on

the part of the taxpayer, no extension will be granted by

the Commissioner.

If an extension is granted, the Commissioner may require

the executor, or administrator, or beneficiary, as the case

may be, to furnish a bond in such amount, not exceeding

double the amount of the tax and with such sureties as

the Commissioner deems necessary, conditioned upon

the payment of the said tax in accordance with the terms

of the extension.

(C) Payment by Installment. — In case the available cash

of the estate is insufficient to pay the total estate tax due,

payment by installment shall be allowed within two (2)

© Compiled by RGL

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