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Donors Tax Handout 3
Donors Tax Handout 3
Who are entitled to foreign tax credit? ESTATE TAX DUE = 5,000,000x6%=300,000
Philippine Net Estate 3,000,000 Rules: 1. If only one foreign country, use LIMIT A only.
USA Net Estate 1,000,000 2. If there are two or more foreign country, use LIMIT A and
Estate tax Paid in USA 15,000 LIMIT B, then select whichever is lower.
Limit B
LIMIT A
USA
300,000/1,000,000 x 45,000 = 13,500 vs 15,000 = 13,500
CHINA
200,000/1,000,000 x 45,000 = 9,000 vs 8,000 = 8,000
TOTAL LIMIT A 21,500
LIMIT B
500,000/1,000,000 x 45,000 = 22,500
100,000 exempt
UNDER THE NEW TAX REFORM AND INCLUSION BILL, FLAT RATE OF 6% WILL BE
APPLIED TO BOTH ESTATE AND DONORS TAX. FOR DONOR’S TAX, EXCEEDING
250,000 SHALL BE SUBJECT TO 6%. HOWEVER THE COMPUTATION AND PROVISION
IN ARRIVING AT NET ESTATE AND NET GIFT WILL STILL BE THE SAME.