RMC No. 77-2015: Clarifies the procedures in the processing of Estate Tax returns for agricultural properties covered by the Comprehensive Agrarian Reform Program

Key points

1. List of CARP landholdings. The RDO with jurisdiction over the deceased landowner’s residence, and the Assessment Service, receive from the Department of Agrarian Reform Provincial Office a list of CARP-covered landholdings. The list gives the landowner’s name and address, date of death, Tax Declaration Number, lot and survey numbers, areas, location and status.
2. Computation without penalties. The RDO requires the documents from the heir or successor-in-interest and values the gross estate under the NIRC at the time of death. It computes the Estate Tax without interest, surcharge and compromise penalties on the CARP-covered portion.
3. Mixed estates. If the estate also has non-CARP properties, the Estate Tax on that portion is increased by the penalties under the Tax Code of 1997, as amended, applicable at the time of filing. The RDO informs the Land Bank of the Philippines (LBP) in writing of the total computed Estate Tax.
4. Filing and payment through LBP. Heirs file the Estate Tax return (BIR Form No. 1801), manually or electronically, within three (3) days from receipt of the computation sheet. The LBP deducts the tax from the compensation payable and remits it to the RDO, and if compensation is not enough the heir pays the balance to the LBP.
5. Issuance of the CAR. The RDO issues the CAR within two (2) working days after receiving the LBP’s proof of remittance. If the heir cannot pay the Estate Tax, the CAR is issued only on the properties with corresponding payment.

Who is affected

• Heirs and successors-in-interest of deceased owners of CARP-covered agricultural land
• Revenue District Offices and Assessment Service
• Land Bank of the Philippines

Deadlines and effectivity

• Filing of BIR Form No. 1801: within three (3) days from receipt of the computation sheet
• CAR issuance: within two (2) working days after receipt of proof of remittance