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1 REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE Quezon City December 16, 2002 REVENUE REGULATIONS NO. 2-2003 SUBJECT : Consolidated Revenue Regulations on Estate Tax and Donor’s Tax Incorporating the Amendments Introduced by Republic Act No. 8424, the Tax Reform Act of 1997. TO : All Internal Revenue Officers and Others Concerned. SECTION 1. SCOPE. - Pursuant to Section 244, in relation to Sections 84 to 104 of the Tax Code of 1997 (Code), these Regulations are hereby promulgated for the purpose of consolidating all the regulations on estate tax and donor’s tax, thereby amending Revenue Regulations No. 17-93 relative to the change in the tax rates of estate tax and donor’s tax pursuant to Republic Act No. 8424, the manner of claiming the deductions from the gross estate of the decedent, and for other purposes. These regulations shall govern the taxation of the transmission of the decedent’s estate and donations made by persons, natural or juridical, whether citizens or aliens, residents or non-residents. For purposes of these regulations, the provisions of the Family Code of the Philippines (E.O. No. 209) which took effect on August 3, 1988 shall govern the property relations between husband and wife whose marriage was celebrated on or after such date. For marriages celebrated prior to the effectivity of the Family Code of the Philippines, the Civil Code of the Philippines shall govern the property relations between husband and wife in relation to the pertinent provisions of the Family Code. SEC. 2. RATES OF ESTATE TAX. - The transfer of the net estate of every decedent, whether resident or non-resident of the Philippines, as determined in accordance with the Code, shall be subject to the estate tax. The entire value of the net estate is divided into brackets and each rate is imposed on the corresponding bracket. Below is a table showing the tax on each bracket and the cumulative total tax for the entire net estate, pursuant to the rates provided in the Code. “If the Net Estate is: But not The tax Of the excess Over over shall be Plus over - P 200,000 Exempt - - P 200,000 500,000 0 5% P 200,000 500,000 2,000,000 P 15,000 8% 500,000 2,000,000 5,000,000 135,000 11% 2,000,000 5,000,000 10,000,000 465,000 15% 5,000,000 10,000,000 and over 1,215,000 20% 10,000,000
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2 SEC. 3. THE LAW THAT GOVERNS THE IMPOSITION OF ESTATE TAX. – It is a well-settled rule that estate taxation is governed by the statute in force at the time of death of the decedent. The estate tax accrues as of the death of the decedent and the accrual of the tax is distinct from the obligation to pay the same. Upon the death of the decedent, succession takes place and the right of the State to tax the privilege to transmit the estate vests instantly upon death. The application of the rates herein prescribed and the procedures in determining the estate tax due shall apply to estate taxes falling due or have accrued beginning January 1, 1998, the effectivity date of Republic Act No. 8424, otherwise known as “The Tax Reform Act of 1997”.
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This note was uploaded on 12/07/2011 for the course TAXATION 101 taught by Professor Atty.phua during the Spring '11 term at University of the Philippines Diliman.

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