Estate Taxation

May 3, 1993 BIR RULING NO. 161-93 ESTATE TAXATION 83 (b) 000-00 161-93 Mrs. Francisca Vda. de Rabara Lower Glad, Midsayap North Cotabato This refers to your letter, dated May 21, 1992, requesting information as to effectivity/applicability of R.A. No. 7499, particularly with respect to the period within which you are required to file the estate tax return covering the estate of your late husband who died on May 5, 1992. It is represented that you notified the BIR of the death of your husband on May 18, 1992; and that you filed the required estate tax return on August 3, 1992. In reply, please be informed of the well-settled rule that estate taxation is governed by the statute in force at the time of death of the decedent (26 R.C. L., p. 206, 4 Cooley on Taxation ). Upon the death of the decedent, succession takes place and the right of the state to tax vests instantly. R.A. No. 7499 was published in Vol. 88, No. 24 of the Official Gazette in its issue of July 13, 1992. Accordingly, R.A. No. 7499 took effect after fifteen (15) days following said publication, or on July 28, 1992, pursuant to Art. 2 of the New Civil Code, and in line with the Supreme Court decision in the case of Taada, et al. vs. Tuvera , 146 SCRA 446. Such being the case, the law in force on May 5, 1992, the date of the death of your husband, is still Section 83(b) of the Tax Code (before amendment by R.A. No. 7499) which requires that the estate tax return should be filed within ninety (90) days from the decedent's death. Consequently, even though R.A. No. 7499 is already being implemented on August 3, 1992, the date when you filed the required estate tax return, the amendments therein are not yet applicable to the subject estate tax return. However, considering the fact that you filed the return within the ninety-day period as required under the old law (Sec. 83(b), you will not be subject to penalties, but as stated before, you will not be entitled to the lower tax rates as provided under R.A. No. 7499. cd VICTOR A. DEOFERIO, JR. Deputy Commissioner of Internal Revenue