BIR’s Revenue Memorandum Circular 62-2018
Published in Daily Tribune on October 23, 2020
by: Migmar Bernped S. Francisco
Grief and longing for the departed are regrettably coupled with practical and legal concerns. While surviving relatives of the deceased need to cope with overwhelming emotions, the latter concerns must nonetheless be addressed immediately even as they appear too burdensome to confront.
Among these concerns are expenses that usually attend death. Hospital and funeral expenses, as well as the deceased’s family’s sustenance, especially when the family was financially dependent on the deceased, must be met. In addition, the heirs and beneficiaries are left with the task of settling the estate of the deceased which requires the payment of estate taxes. Unfortunately, attending to these concerns requires funds, money that the decedent may have kept safely in the bank but which is now not readily available to the family.
Section 97 of the National Internal Revenue Code authorized the administrator of the estate or any heir, upon authorization by the Commissioner, to withdraw up to twenty thousand pesos (P20,000) from the deceased’s bank deposit account. This amount in present reality clearly is insufficient to cover the aforementioned expenses.
Fortunately, Republic Act 10963 or the Tax Reform Acceleration and Inclusion (TRAIN) Law has provided some relief to the decedent’s heirs as they prepare to deal with the legal and practical concerns resulting from the death of a loved one.
Pursuant to the TRAIN Law and Revenue Regulations 12-2018, the Bureau of Internal Revenue (BIR) released Revenue Memorandum Circular (RMC) 62-2018, dated 28 June 2018 clarifying the requirements on the withdrawal from the bank deposit account of a deceased depositor or a joint depositor without the required electronic Certificate Authorizing Registration (eCAR). Essentially, it permits withdrawal from the decedent’s bank deposit account/s without having to settle the decedent’s estate first.
This RMC allows the executor, administrator or any of the heirs of a deceased who maintained a bank deposit account to withdraw from that account any amount within limits of the funds in it within one year from the date of death. All that is required is that a final withholding tax of six percent on the amount withdrawn is paid. For joint accounts, the final withholding tax is based on the deceased’s share in the joint account.
In cases where the deposit accounts have already been made part of the gross estate of the decedent and the estate tax had already been paid, the eCAR maybe presented prior to withdrawing from the bank deposit account. In this case, the withdrawal shall no longer be subjected to final withholding tax.
To make this withdrawal, all that the executor, administrator or any of the legal heirs needs to do is present to the bank a copy of the estate of the decedent’s Tax Identification Number and a duly accomplished BIR Form 1904, stamped received by the concerned Revenue District Office of the BIR.
The bank will then issue BIR Form 2306 certifying the withholding of the final tax. Accordingly, it shall file the prescribed quarterly return on the final tax withheld and remit the same on or before the last day of the month following the close of the quarter during which the final tax was withheld.
It should be noted that the bank has the prerogative to require documents in accordance with its policies or pursuant to those required by laws and regulations in ascertaining the identity of the heir/s and or their authorized representative and their right to claim.
In allowing withdrawals from the bank deposit account of the decedent without the need of prior settlement of the estate and payment of estate tax, the TRAIN Law has enabled the heirs the means to settle the estate of the deceased sans the worry of sourcing funds. It is arguably a step towards more refined and relevant estate tax laws.
