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    Estate Tax and Net Distributable Estate

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    JC
    The document discusses Philippine estate tax policies for citizens, resident aliens, and nonresident aliens. It provides details on: [1] Allowing tax credits for estate taxes paid to foreign countries to avoid double taxation for citizens and resident aliens; [2] Limiting the foreign tax credit to the portion of the foreign estate included in the Philippine tax computation; [3] Taxing only property located in the Philippines for nonresident aliens.

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    Estate Tax and Net Distributable Estate

    Uploaded by

    JC
    3K views7 pages
    The document discusses Philippine estate tax policies for citizens, resident aliens, and nonresident aliens. It provides details on: [1] Allowing tax credits for estate taxes paid to foreign countries to avoid double taxation for citizens and resident aliens; [2] Limiting the foreign tax credit to the portion of the foreign estate included in the Philippine tax computation; [3] Taxing only property located in the Philippines for nonresident aliens.

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    The document discusses Philippine estate tax policies for citizens, resident aliens, and nonresident aliens. It provides details on: [1] Allowing tax credits for estate taxes paid to foreign countries to avoid double taxation for citizens and resident aliens; [2] Limiting the foreign tax credit to the portion of the foreign estate included in the Philippine tax computation; [3] Taxing only property located in the Philippines for nonresident aliens.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    3K views7 pages

    Estate Tax and Net Distributable Estate

    Uploaded by

    JC
    The document discusses Philippine estate tax policies for citizens, resident aliens, and nonresident aliens. It provides details on: [1] Allowing tax credits for estate taxes paid to foreign countries to avoid double taxation for citizens and resident aliens; [2] Limiting the foreign tax credit to the portion of the foreign estate included in the Philippine tax computation; [3] Taxing only property located in the Philippines for nonresident aliens.

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    ESTATE TAX

    ESTATE TAX CREDIT


    To avoid double taxation, the estate tax paid related to
    estate located in foreign countries by a Filipino citizen
    or resident alien decedent is allowed to be credited
    against the total Philippine estate tax due.

    Tax credit is not allowed to nonresident aliens because


    they are taxed only on properties situated within.

    The amount of estate taxes paid to a foreign country


    could be claimed as credit against the Philippine estate
    tax subject to limit, if such taxes pertain to properties
    which are included in the gross estate for Philippine
    estate tax computation. ( Sec. 86(E) NIRC
    LIMIT ON FOREIGN ESTATE TAX
    CREDIT
    1. One foreign country estate tax credit limit:

    = net estate in foreign country X Philippine estate tax


    World net estate

    Or

    = the actual estate tax paid to foreign country, whichever is


    lower.

    2. Several foreign countries estate tax credit limit:

    = total foreign net estate X Philippine Estate tax due


    world net estate
    ESTATE OF NONRESIDENT ALIEN
    For estate tax computation, only the properties of
    a nonresident decedent situated in the
    Philippines are subject to Philippine estate tax.
    (Sec. 85 NIRC).The deduction allowed shall be
    applied proportionately in relation to Philippine
    gross estate. ( Sec. 86(B) NIRC)

    The determination of the gross estate of a


    nonresident alien will depend whether there is
    reciprocity or not. If there is reciprocity,
    intangible assets are excluded for estate tax
    purposes. ( Sec 104 NIRC)
    There is reciprocity at the time of the
    death (or donation) of a nonresident
    alien when his foreign country does
    not impose a transfer tax of any
    character, in respect to intangible
    property situated therein of Filipino
    citizens not residing in that foreign
    country
    ADMINISTRATIVE REQUIREMENTS

    Requirements Exceeds Exceeds Exceeds 2M


    20,000 200,000
    1. Notice of death YES YES YES
    (within 2 months)
    2. Estate tax return NO YES YES
    (within 6 mos)
    3 CPA NO NO YES
    certificate( within 6
    months)
    ADDITIONAL
    REQUIREMENT
    1. In cases where a registered taxpayer dies, the
    administrator or executor shall register the estate of the
    decedent in accordance with Subsection (A) hereof and a
    new TIN shall be supplied in accordance with the provision
    of Sec. 90 of RA 8424

    2. In the case of a nonresident decedent, the executor or


    administrator of the estate shall register the estate with
    the Revenue District Office where he is not registered,
    registration of the estate shall be made with and the TIN
    supplied by the RDO having jurisdiction over his legal
    residence

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