BIR Ruling No. 045-64

June 18, 1964 BIR RULING NO. 045-64 The Regional Director Regional District No. 8 Iloilo City S i r : Reference is made to your letter dated September 4, 1963 requesting the opinion of this Office on the following questions: cdtech "(1) Whether the recording of our lien in the Register Book is sufficient to establish our lien on the property, thus rendering unnecessary the annotation of the lien on the Certificate of Title; "(2) If it is necessary to establish our lien by annotating the same on the Certificate of Title, may we not be exempt from the payment of P1.00 filling fee pursuant to Republic Act No. 928; and "(3) If this is necessary how can we be provided with funds to meet the same." It appears that the request is being made in connection with the internal revenue tax case of Mrs. Timotea Tanasana Salazar involving the amount of P123.74 as inheritance tax and penalties on the transmission of the estate of the late Consorcia Tanasan who died while a resident of Jaro, Iloilo City. In reply thereto, please be informed that the estate tax shall be a lien for five years upon the gross estate of the decedent from the date the tax becomes legally due. The lien of the tax on inheritances, legacies, and other acquisitions mortis causa shall be superior to all other liens, mortgages, encumbrances, or real right created thereon subsequent to the death of the predecessor, and shall be enforcible against the property inherited whether in the possession of the delinquent owner or purchaser, but this lien will be extinguished at the end of five years from the date when the tax becomes legally due. (Par. 2, Sec. 315, National Internal Revenue Code). It is obvious from the aforecited provision of the Tax Code that the lien for the estate and/or inheritance taxes is efficacious for a period of five (5) years, even without the benefit of registration. However, after the lapse of five years, the lien must be registered in order to be efficacious, and for such registration, the Bureau is liable for the payment of the corresponding registration fees prescribed by Section 114 (C-9) of Act No. 496, as amended by Republic Act No. 928, which provides as follows: "Sec. 114. Fees payable to the Register of Deeds . xxx xxx xxx (C)(9). For the annotation of a notice of tax lien of any description . . . for each certificate of title, one peso." It is well to note, however, that in the case of the "Rep. of the Phil. vs. Hospital de San Juan de Dios" (47 O.G., 4, p. 1833, April, 1951), it was held that "the government is exempted from paying the fees in advance in order to be entitled to entry or registration. The general provisions of Section 56, Act 496, as to nullity of the registration in the entry or day book if the filling and registration in the entry or day book, if the filing and registration fee are not paid within 15 days after the date of registration fee are not paid within 15 days after the date of registration in the entry or day book, do not apply to the Insular, provincial and municipal government." Moreover, funds for such purposes, may be paid out of the appropriations of this Bureau authorized under maintenance and other operating expenses. Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue