Clarification on Tax Treatment of Salary Differential in Relation to Maternity Benefits under RA No. 11210

March 26, 2004 BIR RULING [DA-138-04] DA-285-98 dtd 6/29/98 Mrs. Digna B. Dela Cruz 72 Mapang-akit Street Diliman, Quezon City M a d a m : This refers to your letter dated February 27, 2004, requesting on behalf of the Estate of the late GERTRUDES O. STA. ROMAN-BARBIN, for an extension of time to file and pay the corresponding estate tax due on the transmission by the said estate of its properties in favor of the heirs pursuant to Section 91(B) of the Tax Code of 1997. It is represented that Gertrudes O. Sta. Roman-Barbin died on August 30, 2003 due to Pancreatic Cancer; that she had her last address at 5985 San Francisco St. cor. South Ave. Brgy. Olympia, Makati; that the reason for which you are seeking extension is to give you more time in the gathering and collation of documents relative to the deceased's personal and real properties. In reply, please be informed that pursuant to Section 91 (B) of the Tax Code of 1997, which provides, viz : "SEC. 91. Payment of Tax . . . . xxx xxx xxx "(B) Extension of Time When the Commissioner finds that the payment on the due date of the estate tax or of any part thereof would impose undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not 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. In such case, the amount in respect of which the extension is granted shall be paid on or before the date of the expiration of the period of the extension, and the running of the Statute of Limitations for assessment as provided in Section 203 of this Code shall be suspended for the period of any such extension. xxx xxx xxx "If an extension is granted, the Commissioner may require the executor, or administrator, or beneficiary, as the case may be, to furnish a bond in such amount, not exceeding double the amount of the tax and with such sureties as the Commissioner deems necessary, conditioned upon the payment of the said tax in accordance with the terms of the extension." xxx xxx xxx Accordingly, in view of the aforesaid justifiable reasons, your request for extension of 2 years from February 27, 2004 to February 27, 2006, within which to pay the estate tax due thereon is hereby granted, provided that the executor, or administrator or beneficiaries shall furnish a bond in such amount not exceeding double the amount of the tax and with such sureties as the Commissioner deems necessary, conditioned upon the payment of the said tax in accordance with the terms of the extension. It shall be understood, however, that the estate shall be liable to the corresponding interest that have accrued thereon up to the time of payment of the estate tax due on the transmission by the said estate of the properties in favor of the heirs pursuant to Section 249 of the Tax Code of 1997. ( BIR Ruling No. DA-285-98 dated June 29, 1998 ) cDCHaS Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group