28/01/2025
The (SC) has ruled that foreign currency deposit accounts are exempt from estate tax under Republic Act No. 6426 (RA 6426), also known as the ππ°π³π¦πͺπ¨π― ππΆπ³π³π¦π―π€πΊ ππ¦π±π°π΄πͺπ΅ ππ€π΅ π°π§ π΅π©π¦ ππ©πͺππͺπ±π±πͺπ―π¦π΄.
In a Decision penned by Associate Justice Ramon Paul L. Hernando, the SCβs First Division upheld the claim for an estate tax refund filed by the estate of Charles Marvin Romig (Charles), an American national who was a resident of Puerto Galera, Oriental Mindoro.
Charles passed away in 2011 without leaving a will. His sole heir, Maricel Narciso Romig (Maricel), transferred ownership of his properties to herself, including a dollar deposit account, through an Affidavit of Self-Adjudication.
Maricel initially excluded the dollar deposit account from the estate tax computation but later paid an additional PHP 4.56 million to cover it. Subsequently, she sought a refund, arguing that foreign currency deposit accounts are exempt from estate tax under Section 6 of RA 6426.
The Commission on Internal Revenue denied her claim, asserting that the tax exemption over dollar deposit accounts was revoked by the 1997 ππ’π΅πͺπ°π―π’π ππ―π΅π¦π³π―π’π ππ¦π·π¦π―πΆπ¦ ππ°π₯π¦ (NIRC). However, the Court of Tax Appeals (CTA) ruled in Maricelβs favor.
Affirming the CTA, the SC emphasized that the NIRC, a general tax law, did not expressly repeal the specific tax exemption granted by RA 6426, a special law. The Court clarified that a general law cannot override or revoke a special law without a clear and explicit repeal provision.
Read the full text of the Press Release at https://sc.judiciary.gov.ph/sc-foreign-deposit-accounts-exempt-from-estate-tax/
Read the full text of the Decision at https://sc.judiciary.gov.ph/262092-commissioner-of-internal-revenue-vs-estate-of-mr-charles-marvin-romig-represented-by-its-sole-heir-mrs-maricel-narciso-romig/
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