PHILIPPINE REAL ESTATE and RELATED NEWS in and around the country . . .
.
.

BIR to focus on estate tax, eyes P50B by 2016

By Zinnia B. Dela Peña (The Philippine Star) | Updated September 2, 2013 - 12:00am

MANILA, Philippines - The Bureau of Internal Revenue (BIR)  reminded those who have been planning out their wealth for future distribution to their spouse or children to make sure that their heirs pay the estate tax or face tax evasion charges.

BIR commissioner Kim Henares noted that some individuals try to evade estate taxes by selling their properties to their immediate family.  By doing this, the surviving entities would only need to pay the capital gains tax.

Henares said the BIR would check whether the heirs have the financial capacity to purchase the property or asset from their parents.

She said the recipients must have the means to shell out money for the settlement of the appropriate taxes.

The transfer of properties of a deceased person requires the payment of estate taxes to the BIR. If the estate includes real property, the heir must likewise pay the local tax on transfer of real property to the local government where the said property is located.

The estate tax is a tax on the right of the deceased person to transfer his/her estate to his/her lawful heirs and beneficiaries at the time of death.
Business ( Article MRec ), pagematch: 1, sectionmatch: 1

Under the law, the administrator or heirs of deceased persons need to file an estate tax return where the gross value of the estate exceeds P200,000 and where the estate consists of registrable property, motor vehicle, share of stocks and other similar property as a precondition for the transfer of ownership.

The estate tax return shall be filed within six months from the time of death. However, the BIR, may in meritorious cases, grant extension not exceeding 30 days.

Henares said the government’s goal is to boost estate tax collections to around P50 billion by 2016 from the current P1 billion.

To achieve this, the BIR has mandated banks to submit statement of accounts of deceased persons in the past five years to determine whether these financial institutions have been conniving with the heirs by allowing them to withdraw money from the deceased’s account.

Henares pointed out that the bank secrecy law is automatically lifted once a person dies, thus allowing the government to look into the bank accounts of dead people.

Banks found to be colluding with the heirs of the dead would be held criminally liable, she said.

Henares said the BIR is also closely coordinating with the National Statistics Office to check the number of registered deaths.

Records show that on the average, the number of estate tax returns filed correspond only to less than 10 percent of the total number of deaths registered with the NSO.

Some lawmakers had proposed the abolition of the estate tax years ago on the ground that it unfairly punishes frugality, reduces wages and raises little revenue. This, however, was rejected because the government sees estate tax as a source of potential revenue.
____________________________________________________________

real estate central philippines
Copyright ©2008-2017