Introduction

In the Philippines, estate taxation plays a critical role in the transfer of wealth from deceased individuals to their heirs. The estate tax, often referred to as inheritance tax in layman's terms, is levied on the net estate of a decedent prior to distribution. However, historical non-compliance with estate tax obligations has led to accumulated liabilities for many families. To address this, the Philippine government introduced estate tax amnesty programs, allowing heirs to settle outstanding estate taxes at reduced rates without penalties. This article delves comprehensively into the process of filing separate estate tax amnesty returns specifically for cases involving multiple deceased parents, examining the legal framework, procedural requirements, challenges, and implications within the Philippine context.

The focus on multiple deceased parents arises from scenarios where an individual or family must handle the estates of both a deceased mother and father (or adoptive parents) separately. Each parent's estate constitutes a distinct taxable entity under Philippine law, necessitating independent filings. This separation ensures accurate valuation, deduction claims, and tax computations for each decedent, preventing commingling of assets that could complicate inheritance disputes or tax audits.

Legal Basis and Evolution of Estate Tax Amnesty

The foundation for estate tax amnesty in the Philippines stems from Republic Act (RA) No. 11213, known as the Tax Amnesty Act of 2019, which provided a one-time opportunity for taxpayers to settle estate tax deficiencies. This law covered estates of decedents who passed away on or before December 31, 2017, allowing amnesty on unpaid estate taxes, including increments and penalties. The amnesty rate was set at 6% of the net estate, a significant reduction from the standard estate tax rates under the Tax Reform for Acceleration and Inclusion (TRAIN) Law (RA No. 10963), which imposed a flat 6% rate on net estates exceeding PHP 5 million, with exemptions for smaller estates.

Subsequently, RA No. 11569 extended the amnesty period until June 14, 2023, broadening eligibility to include decedents who died on or before May 31, 2020. This extension was a response to the COVID-19 pandemic, which disrupted administrative processes for many families. Bureau of Internal Revenue (BIR) Revenue Regulations (RR) No. 6-2019 and RR No. 12-2021 further detailed the implementation, including forms, deadlines, and exclusions.

Importantly, the amnesty does not apply to estates already fully settled, those under ongoing audits with final assessments, or cases involving tax evasion charges. For multiple deceased parents, the legal principle of separate estates under the Civil Code (Articles 774-1105) and the National Internal Revenue Code (NIRC, as amended) mandates that each parent's death triggers an independent estate tax event. Thus, even if both parents died close in time, their estates cannot be consolidated for amnesty purposes unless they held joint properties requiring partition.

Eligibility Criteria for Availing Amnesty

To qualify for estate tax amnesty, the following must be met for each decedent's estate:

Decedent's Death Date: The parent must have died on or before May 31, 2020 (per the extended period). For multiple parents, verify each death certificate separately.
Unsettled Estate Taxes: The estate must have unpaid taxes, whether assessed or not. This includes situations where no return was filed previously due to oversight, financial constraints, or disputes among heirs.
Heirs' Standing: The applicant must be an heir, executor, administrator, or authorized representative. In cases of multiple heirs, a majority consensus or court-appointed administrator may be required to file on behalf of the estate.
Exclusions: Amnesty is unavailable if the estate involves criminal tax cases, withholding tax liabilities, or properties subject to forfeiture under anti-corruption laws.

For families with both parents deceased, eligibility is assessed per estate. For instance, if the father died in 2015 and the mother in 2019, both could qualify independently, but the applicant must demonstrate clear title or rights to each estate's assets.

Required Documents and Forms

Filing separate returns requires meticulous documentation for each parent. Key forms and documents include:

Estate Tax Amnesty Return (ETAR): BIR Form No. 2118-EA, filed separately for each decedent. This form declares the gross estate, allowable deductions, and computes the amnesty tax at 6% of the net estate.
Sworn Declaration of Assets: A detailed inventory of the decedent's properties, including real estate (with Tax Declarations and Titles), bank accounts, investments, vehicles, and personal effects. For joint properties (e.g., conjugal assets), allocate 50% to each spouse unless proven otherwise.
Death Certificates: Certified true copies from the Philippine Statistics Authority (PSA) for each parent.
Proof of Heirship: Marriage certificates, birth certificates of heirs, or extrajudicial settlements of estate (if no will exists). In contentious cases, a judicial settlement may be necessary.
Valuation Documents: Appraisals for real properties (based on zonal values or fair market value, whichever is higher), bank statements, stock certificates, and insurance policies.
Payment Proof: Bank-validated payment slips for the amnesty tax.

Additional requirements for multiple parents include affidavits clarifying non-commingling of estates and, if applicable, deeds of partition for shared assets like family homes.

Step-by-Step Procedure for Filing

The process for filing separate amnesty returns is administered through the BIR's Revenue District Office (RDO) where the decedent resided or where the estate's executor is located. Here's a detailed guide:

Gather and Organize Documents: Compile separate dossiers for each parent. Cross-reference shared assets to avoid double-counting.
Compute the Net Estate: For each estate:
- Gross Estate = Sum of all assets at fair market value at death.
- Deductions = Standard deduction (PHP 5 million under TRAIN), family home (up to PHP 10 million), medical expenses (up to PHP 500,000), and claims against the estate.
- Net Estate = Gross Estate - Deductions.
- Amnesty Tax = 6% of Net Estate.
Use BIR's online calculators or consult a tax professional for accuracy.
File the ETAR: Submit the form electronically via the BIR's eAFS (Electronic Audited Financial Statements) system or manually at the RDO. Pay the amnesty tax simultaneously via authorized banks or online platforms.
Obtain Acceptance Payment Form (APF): Upon verification, the BIR issues an APF confirming amnesty availment, which serves as proof of settlement.
Transfer Titles: Post-amnesty, use the APF to facilitate transfer of titles at the Registry of Deeds or other agencies.

For multiple parents, file sequentially or simultaneously, but ensure each return stands alone. Delays in one filing do not affect the other, provided deadlines were met during the amnesty period.

Challenges in Handling Multiple Estates

Families dealing with multiple deceased parents face unique hurdles:

Asset Partition: Conjugal properties require equitable division, often necessitating court intervention if heirs disagree.
Successive Deaths: If one parent died after the other, the surviving parent's estate may include inherited assets from the first, complicating valuations. Apply the "fruit of the tree" doctrine under the Civil Code to distinguish original from accrued properties.
Heir Disputes: Sibling rivalries or unknown heirs can stall filings. Mediation or probate court resolution is advisable.
Time-Barred Claims: Post-amnesty (after June 14, 2023), unsettled estates revert to standard taxation with penalties, potentially at 20% interest per annum plus surcharges.
Foreign Assets: If parents held overseas properties, comply with international tax treaties to avoid double taxation.

Benefits of Availing Amnesty

Opting for amnesty provides several advantages:

Penalty Waiver: Forgives interest, surcharges, and civil penalties, reducing overall liability.
Clear Title: Facilitates smooth property transfers, essential for selling or mortgaging assets.
Peace of Mind: Resolves long-standing tax issues, preventing future BIR audits or seizures.

For multiple estates, separate filings ensure each parent's legacy is preserved independently, minimizing inheritance taxes on heirs.

Penalties for Non-Compliance

Failure to avail amnesty during the window subjects estates to full NIRC provisions:

Tax Rate: 6% flat rate on net estates over PHP 5 million, but with penalties.
Increments: 25% surcharge for non-filing, plus 20% annual interest.
Criminal Liabilities: Willful evasion can lead to fines up to PHP 10 million or imprisonment.

In multiple estate scenarios, compounded penalties can erode family wealth significantly.

Conclusion

Filing separate estate tax amnesty returns for multiple deceased parents in the Philippines requires a thorough understanding of tax laws, meticulous documentation, and strategic planning. While the amnesty period has concluded, its principles underscore the importance of timely estate settlement to protect familial assets. Heirs are encouraged to consult certified public accountants or lawyers specializing in taxation to navigate complexities, ensuring compliance and preserving inheritances for future generations. This approach not only fulfills legal obligations but also honors the decedents' wishes in an orderly manner.