Requesting Opinion on the Tax Base for the Computation of Transfer Tax in Case of Delayed Payment and the Effects of Waiver by Heirs to Their Rights to Inheritance to the Computation of Transfer Tax

January 26, 2016 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Atty. Roberto L. Mendoza Salonga, Hernandez & Mendoza Attorneys at Law 3/F Tower B, Gold Loop Towers 1 Gold Loop Square, Ortigas Center Pasig City SUBJECT : Requesting Opinion on the Tax Base for the Computation of Transfer Tax in Case of Delayed Payment and the Effects of Waiver by Heirs to Their Rights to Inheritance to the Computation of Transfer Tax Sir : This refers to your letter dated 19 January 2016 requesting for an opinion on the following issues: 1. In case there is a delay in the payment of the transfer tax, what should be the tax base for the computation of the transfer tax arising from the settlement of estate of a deceased the zonal value at the time of death of the decedent or the zonal value at the time of the payment of the transfer tax? 2. In case some of the heirs of the decedent waive their right to the inheritance and as a result this waiver the share of an heir (who did not waive here hereditary rights) increase, should the waiver be taxed as a transfer under Section 135 of the Local Government Code? At the onset, much as we would like consider your request, we regret that this Bureau, as a matter of policy, does not render opinions on a hypothetical case or an anticipated situation such as presented in your letter. However, if you can submit an actual case related to the issue being sought for an opinion, then this Bureau is more than willing to accommodate your request. Very truly yours, (SGD.) JOCELYN T. PENDON OIC-Executive Director ATTACHMENT Salonga, Hernandez & Mendoza Attorneys at Law 3/F Tower B, Gold Loop Towers, 1 Gold Loop Square, Ortigas Center, Pasig City, Philippines 1600 P.O. Box 12484 Ortigas Center * Facsimile (632) 633-79-68 Telephone Nos. (632) 637-39-97 to 98 Jovito R. Salonga of Counsel January 19, 2016 Local Tax Policy Research and Review Division (LTPD) Bureau of Local Government Finance Department of Finance Roxas Blvd., Manila 1004 Metro Manila Gentlemen : We respectfully request for an opinion on the following issues: 1. In case there is a delay in the payment of the transfer tax, what should be the tax base for the computation of the transfer tax arising from the settlement of estate of a deceased the zonal value at the time of death of the decedent or the zonal value at the time of the payment of the transfer tax? 2. In case some of the heirs of the decedent waive their right to the inheritance and as a result this waiver the share of an heir (who did not waive her hereditary rights) increase, should the waiver be taxed as a transfer under Section 135 of the Local Government Code? Thank you for your prompt attention to this request. aDSIHc Very truly yours, (SGD.) ROBERTO L. MENDOZA