Tax Amnesty Act

February 2019
Tax Amnesty Act

In brief
On 14 February 2019, the President signed into law Republic Act No. 11213 or the Tax Amnesty Act. The law grants the following:

1. Estate Tax Amnesty (ETA)

• The ETA shall cover the estate of decedents who died on or before 31 December 2017, with or without assessments duly issued.
• Any person, except those that are expressly excluded, may avail of the ETA by paying estate amnesty tax at the rate of 6% of the decedent’s total net estate at
the time of death, or 6% of the decedent’s undeclared estate if an estate tax return was previously filed with the Bureau of Internal Revenue (BIR). A minimum
estate amnesty tax of PHP5,000 shall be paid if the allowable deductions applicable at the time of death exceed the value of the gross estate.
• The return shall be filed within two years from the effectivity of the implementing rules and regulations (IRR) in the appropriate office of the BIR which has
jurisdiction over the taxpayer.
• Certain immunities and privileges are available to those who availed of the ETA and have fully complied with the conditions thereof.

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2. Tax Amnesty on Delinquencies (TAD)

• The TAD shall cover all national internal revenue taxes for taxable year 2017 and prior years, which include, but are not limited to: (1) income tax; (2) withholding
tax; (3) capital gains tax; (4) donor’s tax; (5) value-added tax (VAT); (6) other percentages taxes; (7) excise tax and documentary stamp taxes collected by the
BIR; and (8) value-added tax and excise tax collected by the Bureau of Customs (BOC).
• The TAD may be availed of in the following instances and by paying the corresponding amnesty tax:

Case Amnesty tax

Delinquencies and assessments which have become final and executory 40% of the basic tax assessed
Tax cases subject of final and executory judgment by the courts 50% of the basic tax assessed
Pending criminal cases with criminal information filed with the Department of Justice or the courts for tax 60% of the basic tax assessed
evasion and other criminal offenses under Chapter II of Title X, and Section 275 of the Tax Code, with
assessments duly issued
Withholding tax agents who withheld taxes but failed to remit the same to the BIR 100% of the basic tax assessed

• The return shall be filed within one year from the effectivity of the IRR in the appropriate office of the BIR which has jurisdiction over the taxpayer.
• Certain immunities and privileges are available to taxpayers who availed of the TAD and have fully complied with the conditions thereof.

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Moreover, among the provisions of the Tax Amnesty Act, the President has vetoed certain items, to wit:

A. Grant of a General Tax Amnesty

• Section 2, item (b)

“Broaden the tax base by offering a general tax amnesty for all unpaid internal revenue taxes that will help cleanse, organize, and improve the Bureau of Internal
Revenue’s database.”

• Section 3, item (d) and (e) –

This contains the definition of the “Statement of Assets, Liabilities, and Networth” and “Total Asset”.

• Title III – General Tax Amnesty (GTA)

– The GTA shall cover all national internal revenue taxes that have remained unpaid, with or without tax assessments, for taxable year 2017 and prior years,
which include, but are not limited to: (1) income tax; (2) withholding tax; (3) capital gains tax; (4) donor’s tax; (5) VAT; (6) other percentages taxes; (7) excise
tax and documentary stamp taxes collected by the BIR; and (8) VAT and excise tax collected by the BOC;
– Any person, except those that are expressly excluded, may avail of the GTA by paying, either (1) 2% of the total assets as of 31 December 2017, or (2) 5%
based on the total networth as of 31 December 2017 subject to certain minimum amnesty tax payments. Discounts on the total tax amnesty due are granted to
taxpayers availing of the GTA within following prescribed periods:
• 20% - if paid on or before the end of the 3rd calendar month from the effectivity of the IRR
• 15% - if paid on or after the end of the 3rd until the end of the 6th calendar month from the effectivity of the IRR
• 10% - if paid on or after the end of the 6th until the 9th calendar month from the effectivity of the IRR
– The return shall be filed within 1 year from the effectivity of the IRR in the appropriate office of the BIR which has jurisdiction over the taxpayer.
– Certain immunities and privileges are available to taxpayers who availed of the GTA and have fully complied with the conditions thereof.

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B. Section 6 - one-time declaration and settlement of estate taxes on properties subject of multiple unsettled estates
“Provided, further, that if the estate involved has properties which are still in the name of another decedent or donor, the present holder, heirs, executors or
administrators thereof shall only file one (1) estate tax amnesty return and pay the corresponding estate amnesty tax thereon based on the total net estate at the
time of death of the last decedent covering all accrued taxes under the National Internal Revenue Code of 1997, as amended, arising from the transfer of such
estate from all prior decedents or donors through which the property or properties comprising the estate shall pass.”

C. Section 7 - conclusive presumption of correctness of the Estate Tax Amnesty returns

“The estate tax amnesty returns shall be conclusively presumed as true, correct, and final upon filing thereof, and shall be deemed complete upon full payment of
the amount due.”

R.A. No. 11213 shall take effect fifteen (15) days following its complete publication in the official gazette or in at least one newspaper of general circulation. The law was
published in the official gazette on 18 February 2019.

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Coverage of the Tax Amnesty Act
TAD

All national internal revenue taxes for taxable year 2017 and prior years, The TAD may be availed of in the following instances:
which include, but are not limited to, the following:
1. Delinquencies and assessments, which have become final and executory,
1. Income tax; including delinquent tax account, where the application for compromise has
been requested on the basis of: (1) doubtful validity of the assessment, or (2)
2. Withholding tax; financial incapacity of the taxpayer, but the same was denied by the Regional
Evaluation Board or the National Evaluation Board, on or before the effectivity
3. Capital gains tax; of the IRR;
4. Donor’s tax; 2. Pending criminal cases with the Department of Justice or the courts for tax
evasion and other criminal offenses under Chapter II of Title X, and Section
5. VAT;
275 of the Tax Code, with or without assessments duly issued;
6. Other percentages taxes;
3. Tax cases subject of final and executory judgment by the courts on or before
7. Excise tax and documentary stamp taxes collected by the BIR; and the effectivity of the IRR; and

8. VAT and excise tax collected by the BOC. 4. Withholding tax agents who withheld taxes but failed to remit the same to the
BIR.

Any person, natural or juridical, may avail of the TAD.

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Coverage of the Tax Amnesty Act
ETA

Estate of decedents who died on or before 31 December 2017, with or without assessments duly issued, whose estate taxes have remained unpaid or have
accrued as of 31 December 2017.

Exclusions to the coverage

The ETA shall not extend to estate tax cases which have become final and executory and to properties involved in cases pending in appropriate courts:

• Falling under the jurisdiction of the Presidential Commission on Good Government

• Involving unexplained or unlawfully acquired wealth under the Anti-Graft and Corrupt Practices Act and the Act Defining and Penalizing the Crime of Plunder

• Involving violations of the Anti-Money Laundering Act, as amended

• Involving tax evasion and other criminal offenses under Chapter II of Title X of the Tax Code, as amended

• Involving felonies of frauds, illegal exactions and transactions, and malversation of public funds and property under Chapters III and IV of the Revised Penal Code

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Availment process
Tax Amnesty on Delinquencies

Step 1 Step 2
Prepare and file a sworn TAD return accompanied by Secure an Acceptance Payment Form from the
a Certificate of Delinquency. Revenue District Officer (RDO).

Deadline: Within 1 year from the effectivity of the IRR The RDO shall issue and endorse an Acceptance Payment Form authorizing
the authorized agent bank (AAB) or in the absence thereof, the collection agent
Venue: Appropriate office of the BIR which has jurisdiction over the residence or or municipal treasurer concerned, to accept the amnesty tax payment.
principal place of business of the taxpayer

The availment of the TAD and the issuance of the Acceptance Payment Form do not imply admission of criminal, civil or administrative
liability on the part of the taxpayer.

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Step 3 Step 4
Pay the amnesty tax based on the prescribed rates. Submit the Acceptance Payment
Form and sworn TAD Return to the
Case Amnesty Tax BIR.
Delinquencies and assessments which have become final and executory 40% of the basic tax assessed The BIR shall issue an Authority to Cancel
Assessment in favor of the availing taxpayer within
Tax cases subject of final and executory judgment by the courts 50% of the basic tax assessed 15 calendar days from submission of the Acceptance
Payment Form and sworn TAD Return to the BIR.
Pending criminal cases with criminal information filed with the 60% of the basic tax assessed
Department of Justice or the courts for tax evasion and other criminal Otherwise, the duplicate copies, stamped as
offenses under Chapter II of Title X, and Section 275 of the Tax Code, received, of the Acceptance Payment Form and TAD
with assessments duly issued Return shall be deemed as sufficient proof of
availment.
Withholding tax agents who withheld taxes but failed to remit the same to 100% of the basic tax assessed
the BIR

When: The payment of amnesty tax shall be made at the time the return is filed.

Where: AAB or in the absence thereof, the collection agent or municipal treasurer concerned

Basic tax assessed: latest amount of tax assessment issued by the BIR exclusive of interest, penalties, and
surcharge

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Availment process
Estate Tax Amnesty

Step 1 Step 2
Prepare the sworn ETA Return File the sworn ETA Return
Net estate refers to the gross estate less all allowable deductions as Deadline: Within two years from the effectivity of the IRR
provided in the Tax Code, or the applicable estate tax laws prevailing at the time
of death of the decedent. Venue:

Net undeclared estate refers to the difference between the total net estate • If a resident at the time of death, with the RDO which has jurisdiction over
valued at the time of death and the net estate previously declared with the BIR, if the last residence of the decedent
any.
• If a non-resident, with RDO No. 39 or any other RDO as indicated in the IRR
The provisions of the Tax Code, or the applicable estate tax laws at the time of
death of the decedent on valuation, manner of computation, and other matters Attachment
shall supply suppletorily, at the time of entitlement.
• Proof of settlement of the estate – to verify the mode of transfer and the
proper recipients

Who may file the sworn ETA Return? The executor or administrator of the estate, or if there is no executor or administrator appointed, the
legal heirs, transferees or beneficiaries.
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Step 3 Step 4 Step 5
Secure an Acceptance Payment Pay the amnesty estate tax. Submit the Acceptance Payment
Form from the RDO. Form and sworn ETA Return to the
6% of the decedent’s total net estate at the RDO.
The RDO shall issue and endorse an Acceptance time of death
Payment Form authorizing the AAB or in the
If an estate tax return was earlier filed, the 6% The BIR shall issue a Certificate of Availment of
absence thereof, the collection agent or municipal
estate amnesty tax will be based on the net the Estate Tax Amnesty within 15 calendar days
treasurer concerned, to accept the amnesty tax
undeclared estate. from submission of the Acceptance Payment Form
payment.
and ETA Return to the BIR.
If allowable deductions exceed the gross
estate, a minimum amnesty tax of PHP5,000 Otherwise, the duplicate copies, stamped as
shall be paid. received, of the Acceptance Payment Form and
ETA Return shall be deemed as sufficient proof of
availment.
When: The payment of amnesty tax shall be made
at the time the return is filed.

Where: AAB or in the absence thereof, the revenue

collection agent or municipal treasurer concerned

The availment of the ETA and the issuance of the Acceptance Payment Form do not imply admission of criminal, civil or administrative
liability on the part of the taxpayer.
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Tax Amnesty Act
Immunities and Privileges

Tax Amnesty on Delinquencies Estate Tax Amnesty

1. Settlement of the tax delinquency 1. Immunity from payment of estate taxes and increments
and additions thereto arising from all estate taxes for
2. Termination of the pending criminal cases with criminal information filed with the Department of taxable year 2017 and prior years.
Justice or the courts for tax evasion and other criminal offenses under Chapter II of Title X, and
Section 275 of the Tax Code, with assessments duly issued, and the corresponding civil or 2. Immunity from all appurtenant civil, criminal, and
administrative case, if applicable administrative cases and penalties under the Tax Code.

3. Immunity from all suits or actions, including payment of said delinquency or assessment, as well 3. The BIR, in coordination with the applicable regulatory
as additions thereto, and from all appurtenant civil, criminal, and administrative cases and agencies, shall set up a system enabling the transfer of
penalties under the Tax Code insofar as it relates to the subject assets, liabilities, networth, and title over properties to heirs and/or beneficiaries and cash
internal revenue taxes withdrawals from the bank accounts of the decedent, when
applicable.
4. Immunity from such other investigations or suits insofar as they relate to the assets, liabilities,
networth, and internal revenue taxes covered by the tax amnesty 4. The ETA granted shall become final and executory upon
full compliance of all the conditions for the ETA.
5. Any notices of levy, attachments and/or warrants of garnishment issued against the taxpayer
shall be set aside pursuant to a lifting of notice of levy/garnishment duly issued by the BIR or its
authorized representative

6. The TAD granted shall become final and executory upon full compliance of all the conditions for
the TAD.

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Other provisions

Confidentiality and Non- Disposition of Proceeds Information Management

use of Information and from the Tax Amnesty System (IMS)
Data • An amount equivalent to PHP500m • The DOF, in coordination with the
of the collection from tax amnesty BIR and other relevant agencies,
• Any information or data contained in,
shall accrue to the Department of shall institute an Information
derived from or provided by a
Finance (DOF) and shall be Management Program for the
taxpayer in the Tax Amnesty Return,
exclusively used for purposes of effective use of the information
and appurtenant documents shall be
establishing tax database declared or obtained from the Tax
confidential in nature and shall not
(Information Management System). Amnesty Returns and for the
be used in any investigation or
enhancement of revenue
prosecution before the any judicial, • Any excess shall be allocated to administration, revenue collection
quasi-judicial, and administrative augment the appropriation needs for and policy formulation.
bodies. the social mitigating measures and
the BUILD BUILD BUILD
infrastructure projects under
Section 82 of the Tax Reform for
Acceleration and Inclusion Law.

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 Offenses and Penalties Implementing Rules and Congressional Oversight
• The minimum and maximum fines
Regulations Committee
imposed on any officer or employee of
• The Secretary of Finance shall, in • The BIR Commissioner shall submit to
the BIR who divulges or makes known
coordination with the Commissioner the Oversight Committee referred
in any other manner to any person
of Internal Revenue, promulgate and under Section 290 of the Tax Code,
other than the requesting foreign tax
publish the necessary rules and through the Chairpersons of the
authority information obtained from
regulations of this Act within ninety Committee on Ways and Means of the
banks and financial institutions
(90) days from its effectivity. Senate of the Philippines and House of
pursuant to Section 6(F) of the Tax
Representatives, a detailed report on
Code, knowledge or information
the implementation of the Tax Amnesty
acquired by him in the discharge of his
Act within 6 months after the 2-year
official duties are increased from
period of availment of the ETA and 1-
PHP50,000 to PHP500,000, and from
year period of availment of the TAD.
PHP100,000 to PHP1m respectively.

• Any person having knowledge of the

Tax Amnesty Return and appurtenant
documents who discloses any
information relative thereto, and any
violation of the Tax Amnesty Law shall
be penalized with a fine of
PHP150,000 and imprisonment of
not less than six years but not more
than ten years.

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Let’s talk
To help you understand and appreciate the Tax Amnesty law provisions, please
contact:

Alexander B. Cabrera Malou P. Lim

Chairman & Senior Partner, Tax Managing Partner
concurrent Tax Partner T: +63 (2) 459 2016
T: +63 (2) 459 2002 malou.p.lim@ph.pwc.com
alex.cabrera@ph.pwc.com

Fedna B. Parallag Lawrence C. Biscocho Carlos T. Carado II Roselle Yu Caraig Harold S. Ocampo Geraldine E. Longa
Tax Partner Tax Partner Tax Partner Tax Partner Tax Principal Tax Partner
T: +63 (2) 459 3109 T: +63 (2) 459 2007 T: +63 (2) 459 2020 T: +63 (2) 459 2023 T: +63 (2) 459 2029 T: +63 (2) 459 2038
fedna.parallag@ph.pwc.com lawrence.biscocho@ph.pwc.com carlos.carado@ph.pwc.com roselle.y.caraig@ph.pwc.com harold.s.ocampo@ph.pwc.com geraldine.c.esguerra-
longa@ph.pwc.com

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Thank you

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