Estate Tax Amnesty Computation Formula (Philippines) Everything practitioners, heirs, and estate administrators need to know (law and regulations current as of 26 June 2025)
1. Legislative Framework
| Instrument | Key Points |
|---|---|
| Republic Act No. 11213 — Tax Amnesty Act (17 Feb 2019) | Granted one-time estate-tax amnesty; basic rate 6 % of net estate; minimum ₱5,000; condones all surcharges, interest, and penalties. |
| RA 11569 (28 June 2021) | Extended the filing-and-payment window to 14 June 2023 (two-year extension). |
| RA 11956 (13 Sept 2023) | • Cut-off date of death moved to 31 May 2022 (was 31 Dec 2017). • Availment period further extended to 14 June 2025. |
| BIR Regulations & Rulings | RR 6-2019 (implementing rules); RR 17-2021 (first extension); RR 2-2023 & RR 8-2023 (second extension + procedural tweaks); pertinent Revenue Memorandum Circulars (e-filing options, CAR guidelines). |
2. Estates Covered
- Estates of individuals who died on or before 31 May 2022 and whose estate-tax liabilities remained unpaid or were underpaid as of the effectivity of RA 11213.
- Estates with previously filed returns may still avail on the undeclared or understated portion.
3. Exclusions
The amnesty does not apply to:
- Estate properties that are the subject of pending cases involving (a) assets derived from ill-gotten wealth under PD 1866, or (b) violations of the Anti-Money-Laundering Act.
- Estates with a final and executory judgment finding fraud or tax evasion.
4. Period of Availment
- Deadline: 14 June 2025 (no further legislative extensions presently announced).
- Filing and payment are done simultaneously at the Revenue District Office (RDO) having jurisdiction over the last residence of the decedent (or RDO 39 – South Quezon City for non-resident aliens).
5. Documentary Requirements (core set)
- Estate Tax Amnesty Return (ETAR — BIR Form 2118-E).
- Estate Information Sheet with schedule of assets & deductions.
- Certified true copy of the decedent’s death certificate.
- Taxpayer Identification Nos. (TIN) of the estate and all heirs.
- Proof of valuation of every real property (BIR zonal valuation & LGU fair-market value schedules covering the date of death).
- For properties already declared in a prior estate-tax return: copy of the previously filed return and proof of taxes paid.
- Sworn Declaration of Involuntary Heirs (if applicable), or Extra-Judicial Settlement/Court-approved Partition (if one exists).
A CAR (Certificate Authorizing Registration) or CCO (Clearance Certificate of Availment) is issued within 15 working days after full compliance and payment.
6. The Computation Formula
Step 1 — Determine Gross Estate (GE) Add the fair-market value (FMV) of all properties wherever situated (if citizen/resident) or situs in the Philippines (if non-resident alien):
- Real property — higher of BIR zonal value or LGU schedule of values as of date of death.
- Shares of stock — book value (for unlisted) or FMV/closing price (for listed).
- Bank deposits, vehicles, jewelry, business interests, digital assets, etc. at FMV.
Step 2 — Compute Allowable Deductions (AD) Under the NIRC, as amended by the TRAIN Law (effective 1 Jan 2018), and cross-referenced by RA 11213:
| Deduction | Ceiling / Rule |
|---|---|
| Standard deduction (resident citizen) | ₱5 million (no substantiation required) |
| Standard deduction (non-resident citizen/alien) | Pro-rated by ratio of Phil. gross estate to worldwide gross estate |
| Family Home | Up to ₱10 million (excess taxed as ordinary real property) |
| Claims against the estate | Valid, enforceable debts & unpaid obligations |
| Unpaid mortgages, taxes, casualty losses | If incurred before death & unpaid at death |
| Vanishing deduction | For properties received within 5 years before death & already subjected to donor’s/estate tax |
| Transfers for public use | Amount actually transferred |
(For deaths before 1 Jan 2018, the pre-TRAIN deduction set—funeral, medical, judicial expenses, etc.—still applies; elect the scheme more advantageous to the estate.)
Step 3 — Net Estate (NE)
$$ \textbf{NE} = \text{GE} - \text{AD} $$
Step 4 — Estate Amnesty Tax (EAT)
$$ \boxed{\textbf{EAT} = \max \left(0.06 \times \text{NE},; ₱5,000\right)} $$
Special case: Previously filed estate return If an original Estate Tax Return (ETR) was filed and paid, but additional or undervalued items exist, apply the 6 % only to the net undeclared portion.
7. Illustrative Computations
| Scenario | Calculation | Result |
|---|---|---|
| 1. Simple estate — GE = ₱25 M; deductions = ₱8 M | NE = 17 M → 6 % × 17 M | ₱1,020,000 |
| 2. Small estate — GE = ₱120 k; deductions = ₱40 k | NE = 80 k → 6 % × 80 k = ₱4,800 < ₱5 k minimum | ₱5,000 |
| 3. Undeclared asset — Original ETR covered ₱10 M; heirs later discover land worth ₱3 M (no new deductions) | Undeclared NE = ₱3 M → 6 % × 3 M | ₱180,000 |
| 4. Successive deaths — Husband (2016) and wife (2019) both unsettled; combined GE = ₱60 M | File separate ETARs. Compute NE and EAT per decedent; real property subject to pro-forma split for each estate. |
8. Procedural Flow
- Gather asset list & documents; secure zonal & FMV certifications.
- Secure TIN for estate and heirs if none yet issued.
- Prepare ETAR & Worksheets (BIR Form 2118-E + schedules).
- File & Pay at the appropriate RDO (cash, manager’s/ cashier’s check, or ePayment channels supported in RR 8-2023).
- Receive Proof of Payment + stamped ETAR.
- Await Certificate of Availment (CAR/CCO)—BIR has 15 working days to issue after complete compliance.
- Transfer & Register Properties with Registry of Deeds, SEC, LTO, banks, etc., using the CAR/ CCO.
9. Practical Tips & Pitfalls
| Tip | Why it matters |
|---|---|
| Start with the date-of-death FMVs; do not use current zonal values if higher. | Valuation must reflect the moment of death, not today’s market. |
| Utilize the higher of TRAIN vs. pre-TRAIN deduction schemes for deaths before 2018. | You may save tax by electing the old rules (e.g., large medical expenses). |
| Document debts thoroughly (promissory notes, loan agreements). | The BIR disallows vague “borrowings” without evidence. |
| File separate ETARs for each decedent in a chain of unsettled estates. | The BIR will not process a blended computation. |
| Observe the deadline strictly—payment must be on or before 14 June 2025. | No law currently in Congress to extend again. |
| Coordinate early with the Register of Deeds & LGU for transfer fees, which are not covered by amnesty. | Transfer tax, annotation fees, and notarization costs still apply. |
| Keep copies of all filings indefinitely. | The CAR serves as perpetual proof of settlement and immunity from further estate-tax audit. |
10. Frequently Asked Questions
| Question | Short Answer |
|---|---|
| Can we pay in installments? | The law requires full payment upon filing. BIR collections systems can accept split payments made on the same day, but not a true installment plan. |
| Do we still need a court-approved settlement? | Not for purely administrative extra-judicial settlements where there is no minor, incapacitated, or disputed heir. But separate civil-law requirements may trigger probate or guardianship proceedings. |
| What happens to donor’s-tax deficiencies discovered later? | The estate amnesty covers only estate-tax liabilities. Donor’s or income-tax issues must be settled separately. |
| Is a CAR issued per property or per estate? | One CAR per real property (or per group of contiguous properties) plus a Certificate of Availment for the estate. |
| Can foreign-situs assets be ignored for non-resident decedents? | Those assets are excluded from the Philippine gross estate, but must be disclosed to show the ratio for pro-rating the standard deduction. |
| What if heirs missed earlier extensions? | RA 11956 is the final legislated extension. Failure to meet 14 June 2025 reverts the estate to the ordinary 6 % estate-tax regime plus surcharges and interest from the statutory due date. |
11. Conclusion
The Estate Tax Amnesty—now on its second and presumably final extension—offers an unprecedented chance to clean the title of dormant properties, release frozen bank accounts, and settle multi-generational estates for a flat 6 % of net estate, with no penalties. The computation is straightforward once you (1) nail down the correct date-of-death values, and (2) apply the allowable deductions. Act early: assembling documents and coordinating among heirs often takes longer than the actual tax filing itself.
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Consult a Philippine lawyer or certified public accountant for guidance tailored to your specific situation.