1. What is the extended period for availing yourself of the Estate Tax Amnesty?
Taxpayers now have until June 14, 2023, to avail themselves of the Estate Tax Amnesty. Republic Act No. 11569, titled "An Act Extending the Estate Tax Amnesty and for Other Purposes, Amending Section 6 of Republic Act No. 11213, otherwise known as the 'Tax Amnesty Act'" was signed into law by President Rodrigo Duterte on June 30, 2021.
Section 6 of the Tax Amnesty Act now states that "[t]he executor or administrator of the estate, or if there is no executor or administrator appointed, the legal heirs, transferees, or beneficiaries, who wish to avail of the Estate Tax Amnesty shall, within June 15, 2021 or until June 14, 2023, file with the Revenue District Office of the Bureau of Internal Revenue, which has jurisdiction over the last residence of the decedent, a sworn Estate Tax Amnesty Return, in such forms as may be prescribed in the Implementing Rules and Regulations." Pursuant to Section 5 of the Tax Amnesty Act, those qualified to avail of tax amnesty are the "estate of decedents who died on or before December 31, 2017, with or without assessments duly issued therefor, whose estate taxes have remained unpaid or have accrued as of December 31, 2017," subject to exceptions provided in the Tax Amnesty Act.
SyCipLaw TIP 1: Taxpayers who were originally entitled to avail themselves of Estate Tax Amnesty under the previous law but have not applied for amnesty due to lack of time to work on the documents may now consider applying for tax amnesty as they now have until June 14, 2023, to avail themselves of the Estate Tax Amnesty.
2. May the Bureau of Internal Revenue issue a Final Letter of Demand and Final Assessment prior to the expiration of the 15-day period given to the taxpayer to respond to a Preliminary Assessment Notice?
No. In CIR v. Lanao Del Norte Electric Coop. (CTA En Banc Case No. 2236 (CTA Case No. 8769), June 9, 2021), the Court of Tax Appeals En Banc (CTA En Banc) ruled that it is only upon the failure of the taxpayer to respond to the Preliminary Assessment Notice (PAN) within the 15-day period that the Commissioner of Internal Revenue (CIR), or his duly authorized representative, can validly issue the Final Letter of Demand and Final Assessment (FLD/FAN). Thus, the CIR is required to wait for the expiration of the 15-day period, reckoned from the date of receipt of the PAN, before it can issue the FLD/FAN. The date of receipt of the FLD/FAN is not significant even if the same falls after the expiration of the 15-day period. Instead, it is the date when the FLD/FAN was issued that is of importance because it shows when the 15-day period given to the taxpayer to respond to the PAN is observed.
SyCipLaw TIP 2: Taxpayers should note that they are given a 15- day period to respond to the PAN. If a taxpayer (a) receives an FLD/FAN prior to the expiration of the 15-day period, or (b) receives an FLD/ FAN after to the expiration of the 15-day period, but it is dated before its expiration, the taxpayer should raise the defense of violation of its right to due process of law in its protest.
Note that a motion for reconsideration on the decision of the CTA En Banc in this case is pending. Note also that CTA decisions, while persuasive, do not become the law of the land, unlike decisions of the Supreme Court.
3. If a taxpayer pays local business tax pursuant to an assessment made on it by a local government unit, can it ask for a refund of the taxes paid under Section 196 of the Local Government Code which covers illegally collected local business tax if it disagrees with the assessment?
No. In Makati City v. Metro Pacific Tollways Corp. (CTA En Banc Case No. 2217 (CTA AC No. 204), June 14, 2021), the CTA En Banc ruled that once an assessment is issued, the taxpayer cannot choose to pay the assessment and thereafter seek a refund under Section 196 of the Local Government Code (LGC). It must comply with the provisions of Section 195 of the LGC which covers assessments.
If an assessment is protested or disputed, the taxpayer may or may not pay the assessed tax, fee, or charge. Whether there is payment or not, it is clear that the protest in writing must be made within 60 days from receipt of the notice of assessment; otherwise, the assessment shall become final and conclusive. Thereafter, the subsequent court action must be initiated within 30 days from denial or inaction by the local treasurer; otherwise, the assessment becomes conclusive and unappealable.
Thus, the taxpayer's remedy is dependent on two things: first, on whether a notice of assessment was issued; and second, if the taxpayer will opt to pay the assessed tax or not.
If the taxpayer receives an assessment and does not pay the tax, fee, or charge, its remedy is confined strictly to Section 195 of the LGC. Thus, it must file a written protest with the local treasurer within 60 days from receipt of the assessment. If the protest is denied, or if the local treasurer fails to act on it, then the taxpayer must appeal the assessment before a court of competent jurisdiction within 30 days from receipt of the denial, or the lapse of the 60-day period within which the local treasurer must act on the protest. Under this scenario, as no tax has been paid, there is no claim for refund in the appeal.
If the taxpayer opts to pay the assessed tax, fee, or charge, it must still file the written protest within the 60-day period, and then bring the case to court within 30 days from either the decision or inaction of the local treasurer. In its court action, the taxpayer may, seek a refund of the taxes it paid by questioning the validity and correctness of the assessment.
Section 196 of the LGC applies if no assessment notice is issued by the local treasurer, but the taxpayer has made a payment, or a tax has been collected from him. He can claim that he erroneously paid it or that it was illegally collected from him by filing a written claim for refund or credit with the local treasurer, and by filing, within two (2) years from payment of the tax, of a judicial claim for refund.
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