Here’s everything you need to know about the new Estate Taxation in the

Philippines under the approved TRAIN tax law.

The Bureau of Internal Revenue (BIR) has released Revenue
Regulations No. 12-2018, which contains the implementing guidelines
related to the revised Estate Tax and Donor’s Taxes to be used starting
2018, as mandated in the TRAIN bill signed into law by Pres. Rodrigo
Duterte.
Here’s a copy of the BIR’s Revenue Regulation on Estate Taxes in the
Philippines.
BIR Revenue Regulations No. 12-2018
Issued on: January 25, 2018

Consolidated Revenue Regulations on Estate Tax and Donor’s Tax

Incorporating the Amendments Introduced by Republic Act No. 10963,
Otherwise Known as the “Tax Reform for Acceleration and Inclusion
(TRAIN) Law”
SECTION 1. SCOPE. – Pursuant to the provisions of Sec. 244 of the
National Internal Revenue Code of 1997, as amended (NIRC), and Sec.
84 of Republic Act No. 10963, otherwise known as the “Tax Reform for
Acceleration and Inclusion (TRAIN) Law”, these Regulations are hereby
issued to consolidate the rules governing the imposition and payment of
the estate and donor’s tax incorporating the provisions of the TRAIN
Law, particularly the provisions in Chapters I and II of Title III of the
NIRC, thereby repealing Revenue Regulations (RR) No. 2- 2003, as
amended.
ESTATE TAX
SEC. 2. RATE OF ESTATE TAX. – The net estate of every decedent,
whether resident or non-resident of the Philippines, as determined in
accordance with the NIRC, shall be subject to an estate tax at the rate of
six percent (6%).
SEC. 3. THE LAW THAT GOVERNS THE IMPOSITION OF ESTATE
TAX. – It is a well-settled rule that estate taxation is governed by the
statute in force at the time of death of the decedent. The estate tax
accrues as of the death of the decedent and the accrual of the tax is
distinct from the obligation to pay the same. Upon the death of the
decedent, succession takes place and the right of the State to tax the
privilege to transmit the estate vests instantly upon death.
Accordingly, the tax rates and procedures prescribed under these
Regulations shall govern the estate of decedent who died on or after the
effectivity date of the TRAIN Law.

Gross Estate
SEC. 4. COMPOSITION OF THE GROSS ESTATE. – The gross estate
of a decedent shall be comprised of the following properties and interest
therein at the time of his/her death, including revocable transfers and
transfers for insufficient consideration, etc.:
 1. Residents and citizens – all properties, real or personal, tangible or
intangible, wherever situated.
 2. Non-resident aliens – only properties situated in the Philippines
provided, that, with respect to intangible personal property, its inclusion in the
gross estate is subject to the rule of reciprocity provided for under Section 104
of the NIRC.
Provided, That amounts withdrawn from the deposit accounts of a
decedent subjected to the 6% final withholding tax imposed under
Section 97 of the NIRC, shall be excluded from the gross estate for
purposes of computing the estate tax.

SEC. 5. VALUATION OF THE GROSS ESTATE. – The properties

comprising the gross estate shall be valued according to their fair market
value as of the time of decedent’s death.
If the property is a real property, the appraised value thereof as of the
time of death shall be, whichever is the higher of –

 (1) The fair market value as determined by the Commissioner, or

 (2) The fair market value as shown in the schedule of values fixed by the
provincial and city assessors, whichever is higher.
For purposes of prescribing real property values, the Commissioner is
authorized to divide the Philippines into different zones or areas and
shall, upon consultation with competent appraisers, both from the private
and public sectors, determine the fair market value of real properties
located in each zone or area.

In the case of shares of stocks, the fair market value shall depend on
whether the shares are listed or unlisted in the stock exchanges.
Unlisted common shares are valued based on their book value while
unlisted preferred shares are valued at par value. In determining the
book value of common shares, appraisal surplus shall not be considered
as well as the value assigned to preferred shares, if there are any. On
this note, the valuation of unlisted shares shall be exempt from the
provisions of RR No. 06-2013, as amended.

For shares which are listed in the stock exchanges, the fair market value
shall be the arithmetic mean between the highest and lowest quotation
at a date nearest the date of death, if none is available on the date of
death itself.

The fair market value of units of participation in any association,

recreation or amusement club (such as golf, polo, or similar clubs), shall
be the bid price nearest the date of death published in any newspaper or
publication of general circulation.

To determine the value of the right to usufruct, use or habitation, as well

as that of annuity, there shall be taken into account the probable life of
the beneficiary in accordance with the latest basic standard mortality
table, to be approved by the Secretary of Finance, upon
recommendation of the Insurance Commissioner.

Deductions from Gross Estate

SEC 6. COMPUTATION OF THE NET ESTATE OF A DECEDENT
WHO IS EITHER A CITIZEN OR RESIDENT OF THE PHILIPPINES –
The value of the net estate of a citizen or resident alien of the Philippines
shall be determined by deducting from the value of the gross estate the
following items of deduction:
1. Standard deduction. – A deduction in the amount of Five Million Pesos
(P5,000,000) shall be allowed without need of substantiation. The full
amount of P5,000,000 shall be allowed as deduction for the benefit of
 the decedent. The presentation of such deduction in the computation of
the net taxable estate of the decedent is properly illustrated in these
Regulations.
2. Claims against the estate. – The word “claims” is generally construed to
mean debts or demands of a pecuniary nature which could have been
enforced against the deceased in his lifetime and could have been
reduced to simple money judgements. Claims against the estate or
indebtedness in respect of property may arise out of: (1) Contract; (2)
Tort; or (3) Operation of Law.
2.1. Requisites for Deductibility of Claims Against the Estate –
 2.1.1. The liability represents a personal obligation of the deceased
existing at the time of his death;
 2.1.2. The liability was contracted in good faith and for adequate and full
consideration in money or money’s worth;
 2.1.3. The claim must be a debt or claim which is valid in law and
enforceable in court;
 2.1.4. The indebtedness must not have been condoned by the creditor or
the action to collect from the decedent must not have prescribed.
2.2. Substantiation Requirements. – All unpaid obligations and liabilities
of the decedent at the time of his death are allowed as deductions from
gross estate. Provided, however, that the following
requirements/documents are complied with/submitted:
2.2.1. In case of simple loan (including advances):

2.2.1.1 The debt instrument must be duly notarized at the time the
indebtedness was incurred, such as promissory note or contract of loan,
except for loans granted by financial institutions where notarization is not
part of the business practice/policy of the financial institution-lender;
2.2.1.2. Duly notarized Certification from the creditor as to the unpaid
balance of the debt, including interest as of the time of death. If the
creditor is a corporation, the sworn certification should be signed by the
President, or Vice- President, or other principal officer of the corporation.
If the creditor is a partnership, the sworn certification should be signed
by any of the general partners. In case the creditor is a bank or other
financial institutions, the Certification shall be executed by the branch
manager of the bank/financial institution which monitors and manages
the loan of the decedent-debtor. If the creditor is an individual, the sworn
certification should be signed by him. In any of these cases, the one who
should certify must not be a relative of the borrower within the fourth civil
degree, either by consanguinity or affinity, except when the requirement
below is complied with.

When the lender, or the President/Vice-president/principal officer of the

creditor-corporation, or the general partner of the creditor-partnership is
a relative of the debtor in the degree mentioned above, a copy of the
promissory note or other evidence of the indebtedness must be filed with
the RDO having jurisdiction over the borrower within fifteen days from
the execution thereof.

2.2.1.3. In accordance with the requirements as prescribed in existing or

prevailing internal revenue issuances, proof of financial capacity of the
creditor to lend the amount at the time the loan was granted, as well as
its latest audited balance sheet with a detailed schedule of its receivable
showing the unpaid balance of the decedent-debtor. In case the creditor
is an individual who is no longer required to file income tax returns with
the Bureau, a duly notarized Declaration by the creditor of his capacity to
lend at the time when the loan was granted without prejudice to
verification that may be made by the BIR to substantiate such
declaration of the creditor. If the creditor is a non-resident, the
executor/administrator or any of the legal heirs must submit a duly
notarized declaration by the creditor of his capacity to lend at the time
when the loan was granted, authenticated or certified to as such by the
tax authority of the country where the non-resident creditor is a resident;

2.2.1.4. A statement under oath executed by the administrator or

executor of the estate reflecting the disposition of the proceeds of the
loan if said loan was contracted within three (3) years prior to the death
of the decedent;

2.2.2. If the unpaid obligation arose from purchase of goods or services:

2.2.2.1. Pertinent documents evidencing the purchase of goods or

service, such as sales invoice/delivery receipt (for sale of goods), or
contract for the services agreed to be rendered (for sale of service), as
duly acknowledged, executed and signed by decedent debtor and
creditor, and statement of account given by the creditor as duly received
by the decedent debtor;

2.2.2.2. Duly notarized Certification from the creditor as to the unpaid

balance of the debt, including interest as of the time of death. If the
creditor is a corporation, the sworn Certification should be signed by the
President, or Vice- President, or other principal officer of the corporation.
If the creditor is a partnership, the sworn certification should be signed
by any of the general partners. If the creditor is a sole proprietorship, the
sworn certification should be signed by the owner of the business. In any
of these cases, the one who issues the certification must not be a
relative of the decedent-debtor within the fourth civil degree, either by
consanguinity or affinity, except when the requirement below is complied
with.

When the lender, or the President/Vice-President/principal officer of the

creditor-corporation, or the general partner of the creditor-partnership is
a relative of the debtor in the degree mentioned above, a copy of the
promissory note or other evidence of the indebtedness must be filed with
the RDO having jurisdiction over the borrower within fifteen days from
the execution thereof.

2.2.2.3. Certified true copy of the latest audited balance sheet of the
creditor with a detailed schedule of its receivable showing the unpaid
balance of the decedent-debtor. Moreover, a certified true copy of the
updated latest subsidiary ledger/records of the debt of the debtor-
decedent, (certified by the creditor, i.e., the officers mentioned in the
preceding paragraphs) should likewise be submitted.

2.2.3. Where the settlement is made through the Court in a testate or

intestate proceeding, pertinent documents filed with the Court evidencing
the claims against the estate, and the Court Order approving the said
claims, if already issued, in addition to the documents mentioned in the
preceding paragraphs.

3. Claims of the deceased against insolvent persons as defined under

R.A. 10142 (“The Financial Rehabilitation and Insolvency Act (FRIA) of
2010”) and other existing laws, where the value of the decedent’s
interest therein is included in the value of the gross estate.

4. Unpaid mortgages, taxes and casualty losses.

4.1. Unpaid mortgages upon, or any indebtedness in respect to, property
where the value of the decedent’s interest therein, undiminished by such
mortgage or indebtedness, is included in the value of the gross estate.
The deduction herein allowed in the case of claims against the estate,
unpaid mortgages or any indebtedness shall, when founded upon a
promise or agreement, be limited to the extent that they were contracted
bona fide and for an adequate and full consideration in money or
money’s worth.

4.2. Taxes which have accrued as of the death of the decedent which
were unpaid as of the time of death. This deduction will not include
income tax upon income received after death, or property taxes not
accrued before his death, or the estate tax due from the transmission of
his estate.

4.3. There shall also be deducted losses incurred during the settlement
of the estate arising from fires, storms, shipwreck, or other casualties, or
from robbery, theft or embezzlement, when such losses are not
compensated for by insurance or otherwise, and if at the time of the filing
of the return such losses have not been claimed as a deduction for
income tax purposes in an income tax return, and provided that such
losses were incurred not later than the last day for the payment of the
estate tax as prescribed in Subsection (A) of Section 91.

In case unpaid mortgage payable is being claimed by the estate,

verification must be made as to who was the beneficiary of the loan
proceeds. If the loan is found to be merely an accommodation loan
where the loan proceeds went to another person, the value of the unpaid
loan must be included as a receivable of the estate. If there is a legal
impediment to recognize the same as receivable of the estate, said
 unpaid obligation/mortgage payable shall not be allowed as a deduction
from the gross estate.

In all instances, the mortgaged property, to the extent of the decedent’s

interest therein, should always form part of the gross taxable estate.

5. Property previously taxed. – An amount equal to the value specified

below of any property forming part of the gross estate situated in the
Philippines of any person who died within five (5) years prior to the death
of the decedent, or transferred to the decedent by gift within five (5)
years prior to his death, where such property can be identified as having
been received by the decedent from the donor by gift, or from such prior
decedent by gift, bequest, devise or inheritance, or which can be
identified as having been acquired in exchange for property so received:
 a. One hundred percent (100%) of the value if the prior decedent died
within one (1) year prior to the death of the decedent, or if the property was
transferred to him by gift, within the same period prior to his death;
 b. Eighty percent (80%) of the value, if the prior decedent died more than
one (1) year but not more than two (2) years prior to the death of the decedent,
or if the property was transferred to him by gift within the same period prior to
his death;
 c. Sixty percent (60%) of the value, if the prior decedent died more than
two (2) years but not more than three (3) years prior to the death of the
decedent, or if the property was transferred to him by gift within the same
period prior to his death;
 d. Forty percent (40%) of the value, if the prior decedent died more than
three (3) years but not more than four (4) years prior to the death of the
decedent, or if the property was transferred to him by gift within the same
period prior to his death; and
 e. Twenty percent (20%) of the value, if the prior decedent died more than
four (4) years but not more than five (5) years prior to the death of the decedent,
or if the property was transferred to him by gift within the same period prior to
his death.
These deductions shall be allowed only where a donor’s tax, or estate
tax imposed under Title III of the NIRC was finally determined and paid
by or on behalf of such donor, or the estate of such prior decedent, as
the case may be, and only in the amount finally determined as the value
of such property in determining the value of the gift, or the gross estate
of such prior decedent, and only to the extent that the value of such
property is included in the decedent’s gross estate, and only if, in
determining the value of the net estate of the prior decedent, no
deduction is allowable under this Item, in respect of the property or
properties given in exchange therefore. Where a deduction was allowed
of any mortgage or other lien in determining the donor’s tax, or the
estate tax of the prior decedent, which was paid in whole or in part prior
to the decedent’s death, then the deduction allowable under this Item
shall be reduced by the amount so paid. Such deduction allowable shall
be reduced by an amount which bears the same ratio to the amounts
allowed as deductions under Items 2, 3, 4 and 6 of this Subsection as
the amount otherwise deductible under this Item bears to the value of
the decedent’s estate. Where the property referred to consists of two (2)
or more items, the aggregate value of such items shall be used for the
purpose of computing the deduction.

6. Transfers for public use. – The amount of all bequests, legacies, devises
or transfers to or for the use of the Government of the Republic of the
Philippines or any political subdivision thereof, for exclusively public
purposes.
7. The Family Home. – An amount equivalent to the current fair market
value of the decedent’s family home: Provided, however, that if the said
current fair market value exceeds Ten million pesos (P10,000,000), the
excess shall be subject to estate tax.
Definition of Terms
7.1. Definition of terms

Family home – The dwelling house, including the land on which it is

situated, where the husband and wife, or a head of the family, and
members of their family reside, as certified to by the Barangay Captain
of the locality. The family home is deemed constituted on the house and
lot from the time it is actually occupied as a family residence and is
considered as such for as long as any of its beneficiaries actually resides
therein. (Arts. 152 and 153, Family Code)
For purposes of these Regulations, however, actual occupancy of the
house or house and lot as the family residence shall not be considered
interrupted or abandoned in such cases as the temporary absence from
the constituted family home due to travel or studies or work abroad, etc.

In other words, the family home is generally characterized by

permanency, that is, the place to which, whenever absent for business
or pleasure, one still intends to return.

The family home must be part of the properties of the absolute

community or of the conjugal partnership, or of the exclusive properties
of either spouse depending upon the classification of the property (family
home) and the property relations prevailing on the properties of the
husband and wife. It may also be constituted by an unmarried head of a
family on his or her own property. (Art. 156, Ibid.)

For purposes of availing of a family home deduction to the extent

allowable, a person may constitute only one family home. (Art. 161, Ibid.)
 Husband and Wife – Legally married man and woman.
Unmarried Head of a Family – An unmarried or legally separated man or
woman with one or both parents, or with one or more brothers or sisters,
or with one or more legitimate, recognized natural or legally adopted
children living with and dependent upon him or her for their chief
support, where such brothers or sisters or children are not more than
twenty one (21) years of age, unmarried and not gainfully employed or
where such children, brothers or sisters, regardless of age are incapable
of self-support because of mental or physical defect, or any of the
beneficiaries mentioned in Article 154 of the Family Code who is living in
the family home and dependent upon the head of the family for legal
support.
The beneficiaries of a family home are:

 (1) The husband and wife, or the head of a family; and

 (2) Their parents, ascendants, descendants including legally adopted
children, brothers and sisters, whether the relationship be legitimate or
illegitimate, who are living in the family home and who depend upon the head
of the family for legal support. (Art. 154, Ibid)
7.2. Conditions for the allowance of family home as deduction from the
gross estate:

 7.2.1. The family home must be the actual residential home of the
decedent and his family at the time of his death, as certified by the Barangay
Captain of the locality where the family home is situated;
 7.2.2. The total value of the family home must be included as part of the
gross estate of the decedent; and
 7.2.3. Allowable deduction must be in an amount equivalent to the current
fair market value of the family home as declared or included in the gross estate,
 or the extent of the decedent’s interest (whether conjugal/community or
exclusive property), whichever is lower, but not exceeding P10,000,000.
8. Amount received by heirs under Republic Act No. 4917. – Any amount
received by the heirs from the decedent’s employer as a consequence of
the death of the decedent-employee in accordance with Republic Act
No. 4917 is allowed as a deduction provided that the amount of the
separation benefit is included as part of the gross estate of the decedent.
9. Net share of the surviving spouse in the conjugal partnership or community
property. – After deducting the allowable deductions appertaining to the
conjugal or community properties included in the gross estate, the share
of the surviving spouse must be removed to ensure that only the
decedent’s interest in the estate is taxed.
SEC. 7. COMPUTATION OF THE NET ESTATE OF A DECEDENT
WHO IS
A NON-RESIDENT ALIEN OF THE PHILIPPINES. – The value of the
net estate of a decedent who is a non-resident alien in the Philippines
shall be determined by deducting from the value of that part of his gross
estate which at the time of his death is situated in the Philippines the
following items of deductions:
1. Standard deduction. – A deduction in the amount of Five Hundred
Thousand Pesos (P500,000) shall be allowed without need of
substantiation. The full amount of P500,000 shall be allowed as
deduction for the benefit of the decedent.
2. The proportion of the total losses and indebtedness which the value of
such part bears to the value of his entire gross estate wherever situated.
Losses and indebtedness shall include the following:

 2.1. Claims against the estate.

 2.2. Claims of the deceased against insolvent persons where the value of
the interest therein is included in the value of the gross estate.
 2.3. Unpaid mortgages, taxes and casualty losses.
The allowable deduction under this subsection shall be computed using
the following formula:

[Phil Gross Estate / World Gross Estate] x [Item No. 2] = Allowable

Deduction

3. Property previously taxed.
4. Transfers for public use.
5. Net share of the surviving spouse in the conjugal property or community
property.
Unless otherwise provided in this section, the rules for the availment of
deductions in the preceding section shall apply.

Sample Computations and Illustrations – Estate Tax

SEC. 8. PROPER PRESENTATION OF FAMILY HOME AND
STANDARD DEDUCTION AS DEDUCTIONS FROM THE GROSS
ESTATE. – Illustrative examples to properly present the manner of
deducting family home, standard deduction, and other allowable
deduction from the gross estate in accordance with the provisions of the
NIRC.
Illustrations:
(1) Decedent is unmarried, family home more than P10,000,000:
Real and personal properties P 14,000,000

Family Home 30,000,000

Gross Estate P44,000,000

Less: Deductions

Ordinary Deductions

Unpaid real estate tax (2,000,000)

Special Deductions

Family Home (10,000,000)

Standard Deduction (5,000,000)

Total Deductions (17,000,000)

NET TAXABLE ESTATE P27,000,000

Although the family home is valued at P30 million, the maximum

allowable deduction for the family home is P10 million only.

(2) Decedent is married, the family home is conjugal property, more than
P10,000,000:
Exclusive Conjugal Total

Conjugal Properties:

Family Home P30,000,000 P30,000,000

Real and personal properties 14,000,000 14,000,000

Exclusive Properties: 5,000,000 5,000,000

Gross Estate 5,000,000 44,000,000 P49,000,000

Less:

Ordinary Deductions

Conjugal Ordinary Deductions (2,000,000) (2,000,000)

Net Conjugal Estate 42,000,000

Special Deductions

Family Home (10,000,000)

Standard Deduction (5,000,000)

Total Deductions (17,000,000)

Net Estate 32,000,000

Less: 1/2 Share of Surviving Spouse (21,000,000)

Spouse

Conjugal Property P44,000,000

Conjugal Deductions (2,000000)

Net Conjugal Estate P42,000,000

(P42M/2)

NET TAXABLE ESTATE P11,000,000

(3) Decedent is married, the family home exclusive property, more than
P10,000,000:
Exclusive Conjugal Total

Conjugal Properties:

Real and personal properties 14,000,000 14,000,000

Exclusive Properties:

Family Home P30,000,000 P30,000,000

Gross Estate 30,000,000 14,000,000 P44,000,000

Less:

Ordinary Deductions

Conjugal Ordinary Deductions (2,000,000) (2,000,000)

Net Conjugal Estate 12,000,000

Special Deductions

Family Home (10,000,000)

Standard Deduction (5,000,000)

Total Deductions (17,000,000)

Net Estate 27,000,000

Less: 1/2 Share of Surviving Spouse (6,000,000)

Spouse

Conjugal Property P14,000,000

Conjugal Deductions (2,000000)

Net Conjugal Estate P12,000,000

(P12M/2)

NET TAXABLE ESTATE P21,000,000

(4) Decedent is an unmarried, the family home is below P10,000,000:

Real and personal properties P 14,000,000

Family Home 9,000,000

Gross Estate P23,000,000

Less: Deductions

Ordinary Deductions 2,000,000

Special Deductions 14,000,000

Family Home 9,000,000

Standard Deduction 5,000,000

Total Deductions (16,000,000)

NET TAXABLE ESTATE P7,000,000

(5) Decedent is married, the family home is conjugal property and is below
P10,000,000:
Exclusive Conjugal Total

Conjugal Properties:

Family Home P9,000,000 P9,000,000

Real and personal properties 14,000,000 14,000,000

Exclusive Properties: 5,000,000 5,000,000

Gross Estate 5,000,000 23,000,000 P28,000,000

Less:

Ordinary Deductions

Conjugal Ordinary Deductions (2,000,000) (2,000,000)

Net Conjugal Estate 21,000,000

Special Deductions

Family Home (4,500,000)

Standard Deduction (5,000,000)

Total Deductions (11,500,000)

Net Estate 16,500,000

Less: 1/2 Share of Surviving Spouse (10,500,000)

Spouse

Conjugal Property P23,000,000

Conjugal Deductions (2,000000)

Net Conjugal Estate P21,000,000

(P21M/2)

NET TAXABLE ESTATE P6,000,000

(6) Decedent is married, the family home exclusive property and below
P10,000,000:
Exclusive Conjugal Total

Conjugal Properties:

Real and personal properties 14,000,000 14,000,000

Exclusive Properties:

Family Home P9,000,000 P9,000,000

Gross Estate 9,000,000 14,000,000 P23,000,000

Less:

Ordinary Deductions

Conjugal Ordinary Deductions (2,000,000) (2,000,000)

Net Conjugal Estate 12,000,000

Special Deductions

Family Home (9,000,000)

Standard Deduction (5,000,000)

Total Deductions (16,000,000)

Net Estate 7,000,000

Less: 1/2 Share of Surviving Spouse (6,000,000)

Spouse

Conjugal Property P14,000,000

Conjugal Deductions (2,000000)

Net Conjugal Estate P12,000,000

(P12M/2)

NET TAXABLE ESTATE P1,000,000

Time & Place of Filing – Estate Tax

SEC. 9. TIME AND PLACE OF FILING ESTATE TAX RETURN
AND PAYMENT OF ESTATE TAX DUE. –
1. Estate Tax Returns. – In all cases of transfers subject to the tax imposed
herein, or regardless of the gross value of the estate, where the said
estate consists of registered or registrable property such as real
property, motor vehicle, shares of stock or other similar property for
which a Certificate Authorizing Registration from the Bureau of Internal
Revenue is required as a condition precedent for the transfer of
ownership thereof in the name of the transferee, the executor, or the
administrator, or any of the legal heirs, as the case may be, shall file a
return under oath.
Estate tax returns showing a gross value exceeding Five million pesos
(P5,000,000) shall be supported with a statement duly certified to by a 
certified Public Accountant containing the following:

1.1 Itemized assets of the decedent with their corresponding gross value
at the time of his death, or in the case of a nonresident, not a citizen of
the Philippines, of that part of his gross estate situated in the Philippines;
1.2. Itemized deductions from gross estate allowed in Section 86; and

1.3. The amount of tax due whether paid or still due and outstanding.

2. Time for filing estate tax return. – For purposes of determining the estate
tax, the estate tax return shall be filed within one (1) year from the
decedent’s death. The Court approving the project of partition shall
furnish the Commissioner with a certified copy thereof and its order
within thirty (30) days after promulgation of such order.
3. Extension of time to file estate tax return. – The Commissioner or any
Revenue Officer authorized by him pursuant to the NIRC shall have
authority to grant, in meritorious cases, a reasonable extension, not
exceeding thirty (30) days, for filing the return. The application for the
extension of time to file the estate tax return must be filed with the
Revenue District Office (RDO) where the estate is required to secure its
Taxpayer Identification Number (TIN) and file the tax returns of the
estate, which RDO, likewise, has jurisdiction over the estate tax return
required to be filed by any party as a result of the distribution of the
assets and liabilities of the decedent.
4. Time for payment of the estate tax. – As a general rule, the estate tax
imposed under the NIRC shall be paid at the time the return is filed by
the executor, administrator or the heirs.
5. Extension of time to pay estate tax. – When the Commissioner finds that
the payment of the estate tax or of any part thereof would impose undue
hardship upon the estate or any of the heirs, he may extend the time for
payment of such tax or any part thereof not to exceed five (5) years in
case the estate is settled through the courts, or two (2) years in case the
estate is settled extrajudicially. In such case, the amount in respect of
which the extension is granted shall be paid on or before the date of the
expiration of the period of the extension, and the running of the statute of
 limitations for deficiency assessment shall be suspended for the period
of any such extension.
Where the request for extension is by reason of negligence, intentional
disregard of rules and regulations, or fraud on the part of the taxpayer,
no extension will be granted by the Commissioner.

If an extension is granted, the Commissioner or his duly

authorized representative may require the executor, or administrator, or
beneficiary, as the case may be, to furnish a bond in such amount, not
exceeding double the amount of the tax and with such sureties as the
Commissioner deems necessary, conditioned upon the payment of the
said tax in accordance with the terms of the extension.

Any amount paid after the statutory due date of the tax, but within the
extension period, shall be subject to interest but not to surcharge.

6. Payment of the estate tax by installment and partial disposition of estate. – In

case of Insufficiency of cash for the immediate payment of the total
estate tax due, the estate may be allowed to pay the estate tax due
through the following options, including the corresponding terms and
conditions:
6.1. Cash installment
 i. The cash installments shall be made within two (2) years from the date
of filing of the estate tax return;
 ii. The estate tax return shall be filed within one year from the date of
decedent’s death;
 iii. The frequency (i.e., monthly, quarterly, semi-annually or annually),
deadline and amount of each installment shall be indicated in the estate tax
return, subject to the prior approval by the BIR;
 iv. In case of lapse of two years without the payment of the entire tax due,
the remaining balance thereof shall be due and demandable subject to the
applicable penalties and interest reckoned from the prescribed deadline for filing
the return and payment of the estate tax; and
 v. No civil penalties or interest may be imposed on estates permitted to
pay the estate tax due by installment. Nothing in this subsection, however,
prevents the Commissioner from executing enforcement action against the
estate after the due date of the estate tax provided that all the applicable laws
and required procedures are followed/observed.
6.2. Partial disposition of estate and application of its proceeds to the estate tax
due
i. The disposition, for purposes of this option, shall refer to the
conveyance of property, whether real, personal or intangible property,
with the equivalent cash consideration;

ii. The estate tax return shall be filed within one year from the date of
decedent’s death;

iii. The written request for the partial disposition of estate shall be
approved by the BIR. The said request shall be filed, together with a
notarized undertaking that the proceeds thereof shall be  exclusively
used for the payment of the total estate tax due;

iv. The computed estate tax due shall be allocated in proportion to the
value of each property;

v. The estate shall pay to the BIR the proportionate estate tax due of the
property intended to be disposed of;
vi. An electronic Certificate Authorizing Registration (eCAR) shall be
issued upon presentation of the proof of payment of the proportionate
estate tax due of the property intended to be disposed. Accordingly,
eCARs shall be issued as many as there are properties intended to be
disposed to cover the total estate tax due, net of the proportionate estate
tax(es) previously paid under this option; and

vii. In case of failure to pay the total estate tax due out from the proceeds
of the said disposition, the estate tax due shall be immediately due and
demandable subject to the applicable penalties and interest reckoned
from the prescribed deadline for filing the return and payment of the
estate tax, without prejudice of withholding the issuance of eCAR(s) on
the remaining properties until the payment of the remaining balance of
the estate tax due, including the penalties and interest.

7. Request for Extension of Time, Installment Payment and Partial Disposition

of Estate. – For purposes of these Regulations, the request for extension
of time to file the return, extension of time to pay estate tax and payment
by installment shall be filed with the Revenue District Officer (RDO)
where the estate is required to secure its TIN and file the estate tax
return. This request shall be approved by the Commissioner or his duly
authorized representative.
8. Place of filing the return and payment of the tax. – In case of a resident
decedent, the administrator or executor shall register the estate of the
decedent and secure a new TIN therefor from the Revenue District
Office where the decedent was domiciled at the time of his death and
shall file the estate tax return and pay the corresponding estate tax with
the Accredited Agent Bank (AAB), Revenue District Officer or Revenue
Collection Officer having jurisdiction on the place where the decedent
was domiciled at the time of his death, whichever is applicable, following
prevailing collection rules and procedures.
In case of a non-resident decedent, whether non-resident citizen or non-
resident alien, with executor or administrator in the Philippines, the
estate tax return shall be filed with and the TIN for the estate shall be
secured from the Revenue District Office where such executor or
administrator is registered: Provided, however, that in case the executor
or administrator is not registered, the estate tax return shall be filed with
and the TIN of the estate shall be secured from the Revenue District
Office having jurisdiction over the executor or administrator’s legal
residence. Nonetheless, in case the non-resident decedent does not
have an executor or administrator in the Philippines, the estate tax return
shall be filed with and the TIN for the estate shall be secured from the
Office of the Commissioner through RDO No. 39-South Quezon City.

The foregoing provisions notwithstanding, the Commissioner of Internal

Revenue may continue to exercise his power to allow a different
venue/place in the filing of tax returns.

9. Liability for payment. – The estate tax imposed under the NIRC shall be
paid by the executor or administrator before the delivery of the
distributive share in the inheritance to any heir or beneficiary. Where
there are two or more executors or administrators, all of them are
severally liable for the payment of the tax. The eCAR pertaining to such
estate issued by the Commissioner or the Revenue District Officer
(RDO) having jurisdiction over the estate, will serve as the authority to
distribute the remaining/distributable properties/share in the inheritance
to the heir or beneficiary. The executor or administrator of an estate has
the primary obligation to pay the estate tax but the heir or beneficiary
has subsidiary liability for the payment of that portion of the estate which
his distributive share bears to the value of the total net estate. The extent
of his liability, however, shall in no case exceed the value of his share in
the inheritance.
SEC. 10. PAYMENT OF TAX ANTECEDENT TO THE TRANSFER
OF SHARES, BONDS OR RIGHTS AND BANK DEPOSITS
WITHDRAWAL. – There shall not be transferred to any new owner in
the books of any corporation, sociedad anonima, partnership, business,
or industry organized or established in the Philippines any share,
obligation, bond or right by way of gift inter vivos or mortis causa, legacy
or inheritance, unless an eCAR is issued by the Commissioner or his
duly authorized representative.
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 the
withdrawal from the said deposit account, subject to a final withholding
tax of six percent (6%) of the amount to be withdrawn, provided that the
withdrawal shall only be made within one year from the date of the
decedent. The bank is required to file the prescribed quarterly return on
the final tax withheld on or before the last day of the month following the
close of the quarter during which the withholding was made. The bank
shall issue the corresponding BIR Form No. 2306 certifying such
withholding. In all cases, the final tax withheld shall not be refunded, or
credited on the tax due on the net taxable estate of the decedent.

The executor, administrator, or any of the legal heirs, withdrawing from

the deposit account shall provide the bank where such withdrawal shall
be made, with the TIN of the estate of the decedent. For this purpose,
the bank shall require prior to such withdrawal, the presentation of BIR
Form No. 1904 of the estate, duly stamped received by the BIR,.
Further, all withdrawal slips shall contain the following terms and
conditions: (a) a sworn statement by any one of the joint depositors to
the effect that all of the joint depositors are still living at the time of
withdrawal; and, (b) a statement that the withdrawal is subject to the final
withholding tax of 6%.

In instances where the bank deposit accounts have been duly included
in the gross estate of the decedent and the estate tax due thereon paid,
the executor, administrator, or any of the legal heirs shall present the
eCAR issued for the said estate prior to withdrawing from the bank
deposit account. Such withdrawal shall no longer be subject to the
withholding tax imposed under this section.

EFFECTIVITY – These regulations are effective beginning January 1,

2018, the effectivity of the TRAIN Law.