BIR Ruling [DA-068-05]

March 2, 2005 BIR RULING [DA-068-05] Secs. 90 & 91 Puyat Jacinto & Santos 12/F Manilabank Building Ayala Avenue, Makati City Attention: Atty. Virginia B. Viray Gentlemen : This refers to your letter dated September 8, 2004 requesting in behalf of your clients, the Heirs of the late Mariano Yap Eloriaga, for an extension of time within which to file the estate tax return and to pay the estate tax due thereon. It is represented that Mariano Yap Eloriaga died on March 13, 2004, leaving several properties, including the properties located in La Loma, Quezon City, which he co-owned with his children as heirs of his late spouse, Luz Santos Eloriaga; that the heirs need time to gather all the documents necessary in filing the estate tax return and to source the funds for the payment of the estate tax due thereon; and that based on the foregoing, you are requesting for an extension of time within which to file the estate tax return and to pay the estate tax due thereon, as well as, a waiver of the surcharge and penalties imposed on late payment of the estate tax. In reply thereto, please be informed that under Section 90(B) and (C) of the Tax Code of 1997, estate tax return is required to be filed within six (6) months from the decedent's death, and in meritorious, cases, a reasonable extension not exceeding thirty (30) days for filing the return may be granted by the Commissioner of Internal Revenue. The payment of the estate tax or any part thereof shall be made upon the filing of the return or on such date as fixed if an extension is granted by the Commissioner, but in no case 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 pursuant to Section 91(B) of the Tax Code of 1997. Based on the above justifiable ground, your request for an extension of time within which to pay the estate tax is hereby granted up to two (2) years reckoned from March 13, 2004 pursuant to Section 91(B) of the Tax Code of 1997. On the other hand, under Section 90(C) of the Tax Code, only thirty (30) days is granted as an extension of the period within which to file the estate tax return reckoned from the lapse of the six-month period within which the said return is required to be filed. Thus, considering that Mariano Yap Eloriaga died on March 13; 2004, said period had already lapsed. Such being the case, you are hereby directed to immediately file a tentative estate tax return for the estate of Mariano Yap Eloriaga in order to stop the running of the interest for late filing thereof. STaCcA Moreover, in view of the above favorable action to your request for an extension of time within which to pay the estate tax, this Office has decided to forego the imposition of the surcharge and penalties on the estate tax due on the transmission of the estate of Mariano Yap Eloriaga. However, it shall be understood that the estate shall be liable for the corresponding interest that have accrued thereon up to the time of payment of the aforesaid estate tax pursuant to Section 249 of the Tax Code of 1997. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group