The Supreme Court in the case of Commissioner of Internal Revenue (CIR) vs. Estate of Romig (G.R. No. 262092 dated October 9, 2024) has ruled that foreign currency deposit account in Philippines (e.g. US dollar account) under Republic Act No. 6426 or Foreign Currency Deposit Act of the Philippines are exempted from estate tax.
In this case, the American national died last 2011 leaving a US Dollar Account in Philippines amongst its estate which was initially excluded in the computation of taxable net estate until it was later included resulting to additional estate tax payment of PhP4.56M. Using Republic Act No. 6426 or Foreign Currency Deposit Act of the Philippines as legal basis, the legal heir applied for an administrative refund with the CIR that was denied but was reversed on appeal with the Court of Tax Appeals holding that the heirs are entitled to estate tax refund. On appeal, Supreme Court confirmed the decision of CTA reasoning that Republic Act No. 6426 or Foreign Currency Deposit Act of the Philippines providing for tax exemptions has not been effectively amended by Republic Act No. 8424 – National Internal Revenue Code, as amended (NIRC). Thus, foreign currency deposit account in Philippines (e.g. US dollar account) under Republic Act No. 6426 or Foreign Currency Deposit Act of the Philippines are exempted from estate tax
