The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 033-2026[1] to provide clarificatory guidelines on the filing and payment of estate tax under the Estate Tax Amnesty program. The Circular addresses several practical concerns encountered by taxpayers, heirs, executors, administrators, and practitioners in relation to the availment of estate tax amnesty and the completion of documentary requirements.
Background
The Estate Tax Amnesty program was introduced to allow heirs and successors to settle unpaid estate taxes through simplified procedures and reduced liabilities. It was designed to encourage the settlement and transfer of inherited properties that remained unsettled for many years due to high tax liabilities, penalties, surcharges, and documentary challenges.
RMC No. 033-2026 clarifies several issues commonly encountered during implementation, including the submission of proof of settlement, treatment of undeclared properties, installment payments, and the consequences of non-compliance with the conditions of the amnesty.
Submission of Proof of Settlement Remains Mandatory
One of the major clarifications under RMC No. 033-2026 pertains to the submission of proof of settlement of the estate, such as an Extrajudicial Settlement, judicial settlement, court order, or similar document.
The Circular clarifies that while there may be no strict deadline for the submission of the proof of settlement, the requirement itself remains mandatory. This means that taxpayers who have already availed of the estate tax amnesty cannot indefinitely defer the submission of these documents.
The importance of this requirement lies in the issuance of the Electronic Certificate Authorizing Registration (eCAR). Without the proper proof of settlement, the BIR will not issue the eCAR necessary for the transfer of titles and registration of inherited properties.
Accordingly, heirs and estate representatives should ensure that settlement proceedings are completed and supporting documents are secured as early as possible to avoid delays in the transfer of ownership of estate properties.
Undeclared Properties Are Not Covered by the Amnesty
Another important clarification under the Circular involves situations where additional properties are discovered after the filing of the estate tax amnesty return.
RMC No. 033-2026 provides that undeclared properties subsequently discovered or identified are no longer covered by the estate tax amnesty previously availed of by the taxpayer. Instead, such properties shall be subjected to regular estate tax rules and rates applicable at the time of the decedent’s death.
This clarification highlights the importance of conducting a complete inventory and review of all estate assets prior to filing the estate tax amnesty return. Failure to declare all properties may expose the estate to additional taxes, penalties, surcharges, and interest.
In practice, this issue commonly arises when heirs are unaware of certain properties, bank accounts, investments, or other assets owned by the decedent.
Installment Payment of Estate Tax
The Circular likewise confirms that installment payment of estate tax liabilities may be allowed, subject to compliance with specific requirements and conditions imposed by the BIR.
Under the guidelines, the installment arrangement must first be approved by the BIR. Furthermore, the full payment of the estate tax liability must be completed within the allowable period prescribed under the rules, which is two years from the statutory date of payment.
The Circular also emphasizes that taxpayers availing of installment payments must strictly comply with the approved payment schedule. Failure to pay any installment within the prescribed period may result in the cancellation or invalidation of the estate tax amnesty privilege.
Once the amnesty privilege is cancelled, the estate becomes subject to the regular estate tax system, including the imposition of applicable penalties, surcharges, and interest. Any prior payments made under the amnesty may merely be treated as partial payments against the regular estate tax liability.
Strict Compliance Is Necessary to Preserve Amnesty Benefits
RMC No. 033-2026 underscores that the availment of estate tax amnesty is not automatic or unconditional. Taxpayers are required to comply with all documentary, procedural, and payment requirements in order to preserve the benefits granted under the law.
Non-compliance with any material requirement may result in the loss of the amnesty privilege. In such cases, the estate may be assessed based on the ordinary estate tax provisions under the National Internal Revenue Code, together with applicable additions to tax.
Conclusion
Revenue Memorandum Circular No. 033-2026 provides important clarifications on the implementation of the Estate Tax Amnesty program. The Circular emphasizes that while the government continues to encourage taxpayers to settle estate tax liabilities through simplified procedures, strict compliance with documentary and procedural requirements remains essential.
Considering the potential tax exposures and legal implications involved in estate settlement, taxpayers and heirs are encouraged to carefully review their compliance obligations and seek professional assistance where necessary.
Reference: [1] RMC NO. 33-2026.pdf
