Preliminary Assessment Notice and Final Assessment Notice
Preliminary Assessment Notice and Final Assessment Notice
Preliminary Assessment Notice and Final Assessment Notice
The Order provides the following guidelines and policies, among others:
4. If the taxpayer accepts and pays the assessment fully or partially upon
receipt of the PAN, a FAN/ FLD shall be issued to formalize the assessment.
Payment Form 0605 shall be filed and paid to acknowledge and provide
evidence for the settlement of the assessment or portion thereof.
6. If the taxpayer accepts and pays the assessment in full upon receipt of
FAN/FLD, Payment Form 0605 shall be filed and paid as evidence of the
settlement. But if the taxpayer accepts only a portion of the assessment,
Payment Form 0605 shall be filed and paid for such portion, and an FDDA shall
be issued for the unsettled portion. For the portion of assessment resolved in
favor of the taxpayer, an Authority to Cancel Assessment shall be prepared as
evidence of cancellation.
10. If the protest is not acted upon within 180 days from filing of the protest in
the case of a request for reconsideration, or from the lapse of 60 days to submit
documents in the case of a request for reinvestigation, and the taxpayer
appeals to the Court of Tax Appeals (CTA) within 30 days after the expiration of
the 180 day period, an FDDA shall be automatically issued.
11. All the periods provided under RR No. 18-2013 is mandatory and
non-extendible.
12. After issuance of the FDDA, the taxpayer may accept and settle the
assessment fully or partially. Within 30 days from receipt of the FDDA issued by
the CIR's authorized representative, a motion for reconsideration shall be filed
with the CIR or an appeal to the CTA.
13. Appeal to the CIR or to the CTA of the FDDA shall not preclude the
taxpayer from voluntarily settling the assessment fully or partially.
You may access the full version of this Order through the BIR website.
I. Amendment of the Estate Tax Rate
Section 22 of the TRAIN law amends Section 84 of the Tax Code, which
provides for the estate-tax rate. Previously, a tax based on the value of the
net estate of the decedent, whether resident or nonresident of the Philippines,
was computed based on a tax schedule where an estate worth P200,000 and
over was taxed from 5 percent to 20 percent. Under the TRAIN law, it will
now be subject to a flat rate of 6 percent.
Section 23 of the TRAIN law amends Section 86 of the Tax Code, which
provides for the computation of the net estate or, effectively, the deductions
allowed to the gross estate of an individual.
The TRAIN law removes funeral expenses, judicial expenses and medical
expenses as allowable deductions.
Another TRAIN law significant change from the old tax rule is that now,
family homes that are worth up to P10 million will be exempted from estate
tax. Previously, only family homes worth P1 million are exempted.
III. Amendments on the Procedure for Estate Tax Settlement
Section 24 of the TRAIN law repeals Section 89 of the Tax Code. The
repealed provision provides for when a notice of death should be filed and the
period to file the same.
Section 25 of the TRAIN law amends Section 90 of the Tax Code, which
provides for the procedural requirements for the estate-tax return.
The TRAIN law requires that estate-tax returns showing a gross value
exceeding P5 million must be certified by a certified public accountant. This
is P3 million higher than the old tax rule, which only required CPA
certifications for estate-tax returns that exceed a gross value of P2 million.
The TRAIN law has also increased the period for filing of estate-tax returns
from six months from the decedent’s death to one year.
Section 26 of the TRAIN law amends Section 91(c) of the Tax Code, which
provides for the payment of estate tax by installment.
Under the old Tax Rule, only withdrawals up to P20,000 are allowed. The
administrator of the estate or any one of the heirs may, when authorized by
the commissioner, withdraw an amount not exceeding P20,000. However, the
Train Law has increased allowable withdrawals from the deceased person’s
account to any amount, subject to a 6-percent final withholding tax.
The amendments on estate taxes were enacted with the end in view of enticing
the heirs to declare the real value of their deceased kin’s estate and to pay the
proper estate tax. Filing requirements have also been made simpler and
filer-friendly. It remains to be seen whether collection of estate taxes will
improve.
But, as the saying goes, “You can bring the horse to the water, but you cannot
force the horse to drink!”