SC rules foreign currency deposit accounts exempt from estate tax

The Supreme Court has ruled that foreign currency deposit accounts are exempt from estate tax under Republic Act (RA) No. 6426, also known as the Foreign Currency Deposit Act of the Philippines.

In a decision issued on October 9, 2024, the high court's first division affirmed Maricel Romig’s claim for an estate tax refund, emphasizing that RA 6426 prevails over general tax laws like the National Internal Revenue Code (NIRC).

After Mr. Romig’s death in 2011, his sole heir initially excluded a dollar deposit account from estate tax calculations but later paid an additional P4.56 million and filed for a refund.

Despite the Commissioner of Internal Revenue denying her claim, Maricel sought relief from the Court of Tax Appeals which ruled in her favor.

The Supreme Court upheld the lower court's decision, affirming the estate’s right to recover P4.56 million in erroneously paid estate tax and underscoring the legislative intent behind RA 6426 to stimulate foreign investments by providing tax exemptions for foreign currency accounts.