Bank Deposit Account/s of a Deceased Person

Section 27 of the Tax Reform Acceleration and Inclusion (TRAIN) Law (R.A. No. 10963, effective January 1, 2018) amended Section 97 of the National Internal Revenue Code (NIRC). The amended provision now reads: “If a bank has knowledge of the death of a person, who maintained a bank deposit account alone, or jointly with another, it shall allow any withdrawal from the said deposit account, subject to a final withholding tax at six percent (6%). For this purpose, all withdrawal slips shall contain a statement to the effect that all of the joint depositors are still living at the time of withdrawal by any one of the joint depositors and such statement shall be under oath by the said depositors.”

In relation to this, Revenue Memorandum Circular No. 62-2018 (dated June 28, 2018) was issued by the Bureau of Internal Revenue clarifying the requirements on the withdrawal from the bank deposit account/s of a deceased depositor/joint depositor without the required electronic certificate authorizing registration or eCAR, as follows:

1. The executor, administrator, or any of the legal heir/s of a decedent who, prior to death, maintained bank deposit/s may be allowed withdrawal from the said bank deposit account/s within one (1) year from the date of death of the depositor/joint depositor but the amount withdrawn shall be subject to six percent (6%) final withholding tax;

2. For joint account, the final withholding tax shall be based on the share of the decedent in the joint bank deposit/s;

3. Prior to such withdrawal, the Bank shall require the executor, administrator, or any of the legal heir/s withdrawing from the deposit account to present a copy of the Tax Identification Number (TIN) of the estate of the decedent and BIR Form No. 1904 of the estate, duly stamped received by the concerned Revenue District Office (RDO) of the Bureau of Internal Revenue in accordance with the existing guidelines on the issuance of TIN;

4. The bank shall issue the corresponding BIR Form No. 2306 certifying the withholding of sex percent (6%) final tax, 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 withholding was made;

5. All withdrawal slips to be used for purposes of implementing Section 27 of the TRAIN Law shall contain the following terms and conditions:

   a. A sworn statement by any one of the surviving joint depositor/s to the effect that all the other joint depositor/s is/are still living at the time of withdrawal; and

   b. A statement that the withdrawal is subject to six percent (6%) final withholding tax.

Further, the same RMC No. 62-2018 provides that bank deposit/s already declared for estate tax purposes and is/are indicated in the eCAR issued by the concerned RDO to the executor, administrator, or any of the legal heir/s of the decedent, presented to the bank for withdrawal of the said bank deposit/s, shall no longer be subject to the six percent (6%) final withholding tax.

Likewise, the same Circular stats that it shall not be construed as preventing the bank from requiring pertinent documents in accordance with its existing policy or in pursuance of a requiremnt under applicable laws, rules and regulations, for the purpose of, among others, ascertaining the identity and the right to claim of the heir/s or its authorized representative before allowing any withdrawal from the bank deposit account/s.

DISCLAIMER:

The foregoing information is provided as general information. It should not be considered as legal advice. The same does not intend to solicit legal services. Finally, this article is not provided in the course of any attorney-client relationship between the herein author and anobody who views it.