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This page features the full text of
Republic Act No. 7499
AN
ACT RESTRUCTURING THE ESTATE AND DONOR'S TAXES, AMENDING FOR THE
PURPOSE
SECTIONS 77, 79(a), 83(b) AND 92 (a) AND (b) ON TRANSFER TAXES OF THE
NATIONAL
INTERNAL REVENUE CODE, AS AMENDED.
REPUBLIC
ACT NO. 7499
AN
ACT RESTRUCTURING THE ESTATE AND DONOR'S TAXES, AMENDING FOR THE
PURPOSE
SECTIONS 77, 79(a), 83(b) AND 92 (a) AND (b) ON TRANSFER TAXES OF THE
NATIONAL
INTERNAL REVENUE CODE, AS AMENDED.
Section
1. Section 77 of the National
Internal Revenue Code, as amended, is hereby further amended to read as
follows:
"Sec.
77. Rates of estate tax. — There
shall be levied, assessed, collected, and paid upon the transfer of the
net estate as determined in accordance with Section 78 and 79 of every
decedent, whether resident or nonresident of the Philippines, a tax
based
on the value of such net estate, as computed in accordance with the
following
schedules:
chanrobles virtuallaw libraryred
"If
the net estate is:chanroblesvirtualawlibrary
"Over
But Not
The Tax
Plus
Of Excess
Over
Shall be
Over
—
P200,000
Exempt
—
—
P200,000
500,000
5%
—
P200,000chanrobles virtuallaw libraryred
500,000
2,000,000
P15,000
8%
500,000
2,000,000
5,000,000
135,000
12%
2,000,000
5,000,000
10,000,000
495,000
21%
5,000,000
10,000,000
And Over
1,545,000
35%
10,000,000"
Sec.
2. Section 79(a) of the National
Internal Revenue Code, as amended, is hereby further amended to read as
follows:
"(a) In
the case of a citizen or resident of the Philippines, by deducting from
the value of the gross estate."(1) Expenses,
losses, indebtedness, and taxes. — Such amounts —
"(A) For
actual funeral expenses or in an amount equal to five per centum of the
gross estate,
whichever
is lower, but in no case to exceed P 100,000; chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred"(B) For
judicial expenses of the testamentary or intestate proceedings;
"(C) For
claims against the estate: Provided, That at the time the
indebtedness
was incurred the debt instrument was duly notarized and, if the loan
was
contracted within three years before the death of the decedent, the
administrator
or executor shall submit a statement showing the disposition of the
proceeds
of the loan;
"(D) For
claims of the deceased against insolvent persons where the value of
decedent's
interest therein is included in the value of the gross estate; and
"(E) For
unpaid mortgages upon, or any indebtedness in respect to property,
where
the value of decedent's interest therein, undiminished by such mortgage
or indebtedness, is included in the value of the gross estate, but not
including any income taxes upon income received after the death of the
decedent, or property taxes not accrued before his death, or any estate
tax. The deduction herein allowed in the case of claims against the
estate
unpaid mortgages, or any indebtedness, shall when founded upon a
promise
or agreement, be limited to the extent that they were contracted bona
fide and for an adequate and full consideration in money or money's
worth. There shall also be deducted losses incurred during the
settlement
of the estate arising from fires, storms, shipwreck, or other
casualties,
or from robbery, theft, or embezzlement, when such losses are not
compensated
for by insurance or otherwise, and if at the time of the filing of the
return such losses have not been claimed as a deduction for income tax
purposes in an income tax return, and provided that such losses were
incurred
not later than the last day for the payment of the estate tax as
prescribed
in subsection (a) of Section 84.
"(2
)Property previously taxed. — An amount
equal to the value specified below of any property forming a part of
the
gross estate situated in the Philippines of any person who died within
five years prior to the death of the decedent, or transferred to the
decedent
by gift within five years prior to his death, where such property can
be
identified as having been received by the decedent from the donor by
gift,
or from such prior decedent by gift, bequest, devise, or inheritance,
or
which can be identified as having been acquired in exchange for
property
so received:
"One
hundred per centum of the value if the prior decedent died within one
year
prior to the death of the decedent, or if the property was transferred
to him by gift within the same period prior to his death; chanrobles virtuallaw libraryred"Eighty
per centum of the value if the prior decedent died more than one year
but
not more than two years prior to the death of the decedent, or if the
property
was transferred to him by gift within the same period prior to his
death;
"Sixty
per centum of the value if the prior decedent died more than two years
but not more than three years prior to the death of the decedent, or if
the property was transferred to him by gift within the same period
prior
to his death;
"Forty
per centum of the value if the prior decedent died more than three
years
but not more than four years prior to the death of the decedent, or if
the property was transferred to him by gift within the same period
prior
to his death; and
"Twenty
per centum of the value if the prior decedent died more than four years
but not more than five years prior to the death of the decedent, or if
the property was transferred to him by gift within the same period
prior
to his death.
"These
deductions shall be allowed only where a gift tax, or estates tax
imposed
under this Title were finally determined and paid by or on behalf of
such
donor, or the estate of such prior decedent, as the case may be and
only
in the amount finally determined as the value of such property in
determining
the value of the gift, or, the gross estate of such prior decedent, and
only to the extent that the value of such property is included in the
decedent's
gross estate, and only if in determining the value of the estate of the
prior decedent no deduction was allowable under paragraph (2) in
respect
of the property or properties given in exchange therefor. Where a
deduction
was allowed of any mortgage or other lien in determining the gift tax,
or the estate tax of the prior decedent, which were paid in whole or in
part prior to the decedent's death then the deduction allowable under
said
paragraph shall be reduced by the amount so paid. Such deduction
allowable
shall be reduced by an amount which bears the same ratio to the amounts
allowable as deductions under paragraphs (1) and (3) of this subsection
as the amount otherwise deductible under said paragraph (2) bears to
the
value of the decedent's estate. where the property referred to consists
of two or more items the aggregate value of such items shall be used
for
the purpose of computing the deduction.
"(3) Transfers
for public use. — The amount of all bequests, legacies, devices, or
transfers
to or for the use of the Government of the Republic of the Philippines,
or any political subdivision thereof, for exclusively public
purposes.
"(4) The
family home. — An amount equivalent to the current or fair market value
or zonal value of the decedent's family home, whichever is higher: Provided,
however, That, if the said current or fair market value or zonal
value
exceeds One million pesos (P1,000,000), the excess shall be subject to
estate tax. As a sine qua non condition for the exemption or deduction,
said family home must have been the decedent's family home as certified
by the barangay captain of the locality."
Sec.
3. Section 83(b) of the National
Internal Revenue Code, as amended, is hereby further amended to read as
follows:chanroblesvirtualawlibrary
"(b) Time
for filing. — For the purpose of determining the estate tax provided
for
in Section 77 of this Code, the estate tax return required under the
preceding
subsection (a) shall be filed within six months from the decedent's
death.chanrobles virtual law library "A
certified copy of the schedule of partition and the order of the court
approving the same shall be furnished the Commissioner within thirty
days
after the promulgation of such order."
Sec.
4. Section 92(a) and (b) of the
National Internal Revenue Code, as amended, is hereby further amended
to
read as follows:
"Sec.
92 Rates of tax payable by donor.
— (a) In general. — The tax for each calendar year shall be computed on
the basis of the total net gifts made during the calendar year in
accordance
with the following schedule:
"If
the net gift is:chanroblesvirtualawlibrary
"Over
But Not
The Tax
Plus
Of Excess
Over
Shall be
Over
—
P50,000
Exempt
—
—
P50,000
100,000
1.5%
—
P50,000chanrobles virtuallaw libraryred
100,000
200,000
P750
3%
100,000
200,000
500,000
3,750
5%
200,000
500,000
1,000,000
18,750
8%
500,000
1,000,000
3,000,000
58,750
10%
1,000,000
3,000,000
5,000,000
285,750
15%
3,000,000
5,000,000
—
558,750
20%
5,000,000
"(b) Tax
payable by donor if donee is a stranger. — When the donee or
beneficiary
is a stranger, the tax payable by the donor shall be ten percent (10%)
of the net gifts. For the purpose of this tax, a stranger is a person
who
is not a:
"(i) Brother,
sister (whether by whole or half blood), spouse, ancestor, and lineal
descendant;
or
"(ii) Relative
by consanguinity in the collateral line within the fourth degree of
relationship. chanrobles virtuallaw libraryred
"(c) Any
contribution in cash or in kind to any candidate, political party or
coalition
of parties for campaign purposes, shall be governed by the Election
Code,
as amended."
Sec.
5. All laws, decrees, orders,
rules, regulations and other issuances, or parts thereof, inconsistent
with the provisions of this Act are hereby repealed or modified
accordingly.
Sec.
6. This Act shall take effect
upon its approval.chanrobles virtual law library
Approved:
May
18, 1992
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