Whether a Qualified Foreign Currency Deposit Left in the Phil. by a Non-Resident Alien Decedent is Subject to Estate Tax

March 30, 1999 BIR RULING NO. 039-99 000-00-039-99 A.M. Sison Jr. & Associates Suite 2002-A Security Bank Center 6776 Ayala Avenue Makati City Attention: Atty . A . Gutierrez, Jr . Gentlemen : This refers to your letter dated December 15, 1997 requesting for a ruling on whether or not a qualified foreign currency deposit left in the Philippines by a non-resident alien decedent is subject to estate tax. In reply, please be informed that pursuant to Section 85 of the Tax Code of 1997, the value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated: Provided, however, That in the case of a non-resident decedent who at the time of his death was not a citizen of the Philippines, only that part of the entire gross estate which is situated in the Philippines shall be included in his taxable estate. However, Section 1 of P.D. 1246, amending Section 6 of R.A. 6426, provides that all foreign currency deposits made under the said Act, as amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree No. 1034, including interest and all other income or earnings of such deposits, are hereby exempted from any and all taxes whatsoever irrespective of whether or not these deposits are made by residents or non-residents so long as the deposits are eligible or allowed under aforementioned laws and, in the case of non-residents, irrespective of whether or not they are engaged in trade or business in the Philippines. LexLib Based on the foregoing, the foreign currency deposits of a non-resident alien decedent including interest and all other income or earnings of such deposits are exempt from estate and all other taxes whatsoever; as long as the deposits are eligible or allowed under R.A. No. 6426, as amended. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue