In the Philippines, settling the estate of a deceased loved one is not merely a matter of distributing property; it is a rigorous legal and administrative process. Central to this is obtaining the Estate Tax Clearance, technically known as the Certificate Authorizing Registration (CAR).

Without this document, the Titles to real estate cannot be transferred to the heirs, and stocks or bank deposits cannot be released. Here is a detailed breakdown of the requirements and steps involved in the Philippine context.

1. The Legal Basis

The settlement of estate taxes is governed primarily by the National Internal Revenue Code (Tax Code), as amended by the TRAIN Law (Republic Act No. 10963).

For deaths occurring from January 1, 2018, onwards, a flat estate tax rate of 6% is applied to the Net Estate. For deaths prior to this date, the older graduated tax rates (which could reach up to 20%) apply.

2. Mandatory Requirements for Filing

To secure a CAR, the administrator, executor, or heirs must submit several documents to the Bureau of Internal Revenue (BIR).

A. Core Documents

BIR Form 1801: The Estate Tax Return.
Certified True Copy of the Death Certificate: Issued by the Philippine Statistics Authority (PSA).
Notice of Death: (Required for older cases; largely simplified under the TRAIN Law).
Taxpayer Identification Number (TIN): Both for the decedent and the estate itself.

B. Property-Specific Documents

Real Property: Certified True Copy of the Transfer Certificate of Title (TCT/OCT) and the Tax Declaration current at the time of death.
Personal Property: Certificates of stocks, bank passbooks (with a certificate of the balance at the time of death), or certificates of registration for vehicles.
Proof of Valuation: For real property, the value used is the higher between the Zonal Value (BIR) and the Fair Market Value (Provincial/City Assessor).

C. Legal Documents

Deed of Extrajudicial Settlement of Estate (EJS): If the heirs agree among themselves without going to court.
Affidavit of Self-Adjudication: If there is only one sole heir.
Court Orders: If the estate is settled through judicial proceedings (testate or intestate).
Affidavit of Publication: Proof that the notice of settlement was published in a newspaper of general circulation for three consecutive weeks.

3. The Processing Steps

Step 1: Inventory and Valuation

Gather all titles, bank records, and certifications. Determine the gross value of the estate and subtract allowable deductions (such as the Standard Deduction, which is ₱5,000,000 under the TRAIN Law).

Step 2: Filing and Payment

File the BIR Form 1801 and pay the taxes at the Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office (RDO) where the decedent was residing at the time of death.

Note: If the decedent was a non-resident, the filing is done at RDO No. 39 (South Quezon City).

Step 3: Submission of the "Tax Docket"

Submit the proof of payment and all the documentary requirements listed above to the RDO. A Revenue Officer will be assigned to examine the documents and verify if the correct tax was paid.

Step 4: Issuance of the CAR

Once the BIR is satisfied that the taxes have been fully paid and the documentation is complete, they will issue the Certificate Authorizing Registration (CAR). This is a blue-coded (or high-security) document that proves the government has "cleared" the transfer.

4. Allowable Deductions (TRAIN Law)

To arrive at the taxable Net Estate, the following may be deducted:

Standard Deduction: ₱5,000,000.
Family Home: Up to ₱10,000,000 (if it was the decedent's actual residence).
Claims Against the Estate: Debts owed by the deceased.
Amount Received under RA 4917: Retirement benefits.

5. Timeline and Penalties

Filing Period: The Estate Tax Return must be filed within one (1) year from the decedent's death.
Extension: The Commissioner may grant an extension of up to 30 days in meritorious cases.
Penalties: Failure to file on time results in a 25% surcharge, 12% interest per annum, and potential compromise penalties.

Summary Table: Key Information

Feature	TRAIN Law (Jan 2018 - Present)	Old Tax Code (Pre-2018)
Tax Rate	Flat 6%	Graduated (5% to 20%)
Standard Deduction	₱5,000,000	₱1,000,000
Family Home Deduction	Up to ₱10,000,000	Up to ₱1,000,000
Filing Deadline	1 Year from death	6 Months from death

Would you like me to draft a checklist of the specific BIR forms and attachments tailored to a particular type of asset, such as a family home or corporate stocks?