Estate tax can become the biggest obstacle to transferring inherited land, withdrawing bank deposits, or dividing property among heirs in the Philippines. The tax must generally be computed, filed, and paid before the Bureau of Internal Revenue (BIR) issues the electronic Certificate Authorizing Registration, or eCAR, needed to transfer most registered assets. This guide explains who must file, how the taxable estate is computed, which deductions are allowed, what documents the BIR requires, and how the process works for Filipinos, overseas heirs, and foreigners.

What Is Estate Tax in the Philippines?

Estate tax is a tax on the transfer of a deceased person’s property to the heirs. It is imposed on the estate as a whole, not separately on each inheritance received by an heir.

Under Article 777 of the Civil Code, succession rights are transmitted from the moment of death. However, this does not mean that heirs can immediately register inherited land, transfer shares, or close every bank account. Government agencies and private institutions ordinarily require proof that the estate tax requirements have been completed.

For deaths occurring on or after January 1, 2018, the estate tax rate is:

Estate tax = 6% of the net taxable estate

The 6% rate was introduced by Republic Act No. 10963, commonly called the TRAIN Law, and implemented through BIR Revenue Regulations No. 12-2018. (Lawphil)

Official references include the TRAIN Law under Republic Act No. 10963 and BIR Revenue Regulations No. 12-2018.

Why the Date of Death Matters

Estate tax is governed by the law in force when the person died—not the law in force when the heirs finally decide to settle the estate.

Date of death	Applicable general rule
On or after January 1, 2018	Flat 6% rate on the net taxable estate, with TRAIN Law deductions
Before January 1, 2018	Older graduated estate tax rates and older deduction rules
Death on or before May 31, 2022	May have qualified for estate tax amnesty, but the amnesty filing period has already ended

A family settling the estate of someone who died in 2015 should not automatically use the current 6% computation. The BIR will apply the rates, deductions, filing rules, and penalties appropriate to the date of death.

The extended estate tax amnesty under Republic Act No. 11956 covered qualified estates of persons who died on or before May 31, 2022. The statutory availment period ended in June 2025 and is no longer open for new applications. Certain estates that validly entered an approved installment arrangement before the deadline may still be completing those payments, subject to BIR rules. (Lawphil)

Who Must File the Estate Tax Return?

The estate tax return is normally filed by one of the following:

The court-appointed executor named in a will
The court-appointed administrator of the estate
The legal heirs
A person in actual or constructive possession of estate property, when no executor or administrator has been appointed

A return is generally required when the estate includes property that must be registered or transferred through a government office or private registry. Examples include:

Land, houses, and condominium units
Motor vehicles
Shares of stock
Certain bank deposits and investments
Business interests
Other registered or registrable property

This means an estate tax return may still be necessary even when deductions reduce the estate tax payable to zero. The heirs may need the return and eCAR to transfer the property legally. (Bir Cdn)

When a CPA-certified statement is required

For a person who died on or after January 1, 2018, the estate tax return must generally be supported by a statement certified by an independent Certified Public Accountant when the gross estate exceeds ₱5 million.

The CPA statement should identify:

The assets included in the gross estate
The deductions claimed
The amount of tax due
Other information required by the BIR

The ₱5 million threshold refers to the gross estate, not the net taxable estate after deductions.

What Property Is Included in the Gross Estate?

The gross estate is the total value of property and taxable interests included in the estate before deductions.

Filipino citizens and Philippine residents

For a Filipino citizen or a resident of the Philippines, the gross estate generally includes property wherever situated, such as:

Philippine real estate
Foreign real estate
Philippine and foreign bank accounts
Shares in local and foreign companies
Vehicles, jewelry, and valuable personal property
Business interests and receivables
Certain transfers made before death that are treated as substitutes for testamentary transfers

Nonresident foreign nationals

For a nonresident alien—that is, a foreign national who was not residing in the Philippines—the Philippine estate tax generally covers property situated in the Philippines.

Philippine-situs assets may include:

Land and buildings in the Philippines
Shares issued by a Philippine corporation
Business interests located in the Philippines
Certain Philippine debts, securities, or intangible assets

Some Philippine-situs intangible property of a nonresident alien may be excluded when the statutory reciprocity rule applies. Reciprocity generally requires proof that the foreign country does not impose a comparable transfer tax on intangible property owned by Philippine residents, or grants a similar exemption. It should not be assumed without documentary support.

How to Compute Estate Tax in the Philippines

The basic formula for deaths on or after January 1, 2018 is:

Gross estate less ordinary deductions less special deductions less surviving spouse’s net share in marital property equals net taxable estate multiplied by 6% estate tax rate

The official computation is made through BIR Form No. 1801.

Step 1: Identify the decedent’s citizenship and residence

First determine whether the deceased was:

A Filipino citizen
A resident foreign national
A nonresident foreign national

This determines whether worldwide assets or only Philippine-situs assets are included and which deductions are available.

Citizenship should be supported by records such as a Philippine passport, birth certificate, naturalization documents, or evidence of foreign citizenship. Residence is a factual and legal question and is not determined solely by where the person happened to be when death occurred.

Step 2: List all assets and determine ownership

Prepare a complete inventory showing:

Description of each asset
Location
Registered owner
Acquisition date
Acquisition cost, when available
Fair market value at death
Whether the asset was exclusive or marital property
Supporting document

For married decedents, ownership classification is crucial. An asset registered only in the deceased spouse’s name is not automatically exclusive property. It may still belong to the absolute community or conjugal partnership, depending on the marriage date, marriage settlement, source of funds, and applicable property regime under the Family Code.

Step 3: Determine the value of each asset

Estate assets are generally valued at their fair market value on the date of death.

Real property

For Philippine land and buildings, the value is generally the higher of:

The BIR zonal value; or
The fair market value in the schedule of values of the provincial or city assessor

The amount in an old deed of sale, tax declaration, or family estimate does not control if it is lower than the legally prescribed value.

Buildings and improvements should also be included. If the tax declaration says the land is vacant but a house already existed when the owner died, the BIR may ask for updated tax records, construction information, photographs, or an ocular inspection.

Listed shares of stock

Shares traded on a stock exchange are generally valued using the arithmetic mean of the highest and lowest quoted prices on the date of death. If there was no sale on that date, the BIR may use the nearest available trading quotation.

Unlisted shares

The usual valuation rules include:

Unlisted common shares: book value
Unlisted preferred shares: par value

The BIR may require the corporation’s audited financial statements nearest the date of death and a corporate secretary’s certification.

Bank deposits and investments

Banks and financial institutions normally issue certifications showing balances as of the date of death. Interest earned or other amounts legally belonging to the deceased may also need to be included.

Vehicles and other personal property

Motor vehicles may be supported by the certificate of registration, official receipt, purchase records, and evidence of market value. Jewelry, artwork, equipment, and other valuable personal property may require appraisals or comparable-market evidence.

Step 4: Subtract ordinary deductions

Ordinary deductions may include the following, subject to statutory conditions and documentation:

Claims against the estate
Claims against insolvent persons
Unpaid mortgages
Taxes owed by the deceased
Certain casualty losses
Property previously taxed, also called a vanishing deduction
Transfers for public use

A claim against the estate must be genuine, legally enforceable, and supported by evidence. A handwritten family list saying the deceased “owed” a relative money is ordinarily insufficient.

For a loan evidenced by a promissory note, the BIR may require:

A notarized promissory note
Proof that the money was actually released
Bank records
Creditor information
An accounting of how the proceeds were used, particularly when the loan was obtained within three years before death

Funeral and medical expenses are no longer separately itemized deductions under the TRAIN Law rules for post-2017 deaths. Instead, the law provides a larger standard deduction. Families should not automatically copy the deduction list used in older estate tax computations.

Step 5: Apply the special deductions

Standard deduction

The standard deduction is available without proving actual expenses:

Decedent	Standard deduction
Citizen or resident	₱5,000,000
Nonresident alien	₱500,000

Family home deduction

A qualified family home may be deducted up to ₱10 million, subject to the decedent’s actual ownership interest.

The property must have been the actual family home of the deceased and the family, not merely a property described as a residence in tax records. The BIR ordinarily requires a barangay certification confirming that the property was the decedent’s family home.

When the family home was community or conjugal property, only the portion attributable to the deceased is generally deductible. For example, if a community family home was worth ₱8 million and the deceased owned a one-half marital interest, the deductible amount would ordinarily be ₱4 million—not the full ₱8 million.

Amounts received under Republic Act No. 4917

Qualified amounts received by the heirs from the deceased employee’s employer because of death, retirement, or separation under a BIR-approved plan may be deductible under Republic Act No. 4917, subject to the applicable requirements.

Foreign estate tax credit

For estates taxable on worldwide property, estate or inheritance taxes paid to a foreign country may qualify for a foreign tax credit, subject to statutory limitations. Official receipts, foreign tax assessments, and authenticated or apostilled supporting records may be required.

Step 6: Deduct the surviving spouse’s net share

The surviving spouse’s own share in community or conjugal property is not part of the deceased spouse’s taxable estate.

The spouse’s share is determined after deducting obligations chargeable against the marital property. It should not simply be calculated as one-half of every asset listed in the deceased spouse’s name.

A practical computation usually separates the estate into:

Exclusive property of the deceased
Community or conjugal property
Exclusive property of the surviving spouse
Obligations chargeable to exclusive property
Obligations chargeable to marital property

Only the deceased spouse’s net share passes through the estate.

Step 7: Multiply the net taxable estate by 6%

Consider this simplified example:

Item	Amount
Community family home	₱12,000,000
Other community assets	₱8,000,000
Decedent’s exclusive property	₱6,000,000
Gross estate	₱26,000,000
Less: Community debts	(₱2,000,000)
Less: Surviving spouse’s net share	(₱9,000,000)
Less: Standard deduction	(₱5,000,000)
Less: Family home deduction attributable to decedent	(₱6,000,000)
Net taxable estate	₱4,000,000
Estate tax at 6%	₱240,000

The surviving spouse’s net share is ₱9 million because the net community property is ₱18 million after the ₱2 million community debt.

This example is intentionally simplified. Actual computations may involve exclusive debts, foreign assets, donations made before death, insurance proceeds, business interests, prior transfers, or contested ownership.

Estate Tax Documentary Requirements

The exact checklist depends on the estate’s assets. The proper Revenue District Office, or RDO, may ask for additional documents when ownership or valuation is unclear.

Basic documents

Common requirements include:

Certified copy of the death certificate
Taxpayer Identification Number of the estate
TIN verification for the deceased, heirs, executor, or administrator
Government-issued IDs
BIR Form No. 1801
Certified CPA statement, when required
Marriage certificate, if the deceased was married
Birth certificates or other records proving the heirs’ relationship
Last will and testament, if any
Judicial appointment of the executor or administrator, if applicable
Extrajudicial settlement, affidavit of self-adjudication, or court order
Special power of attorney when a representative files or processes the estate

Documents for particular assets

Asset or deduction	Common supporting documents
Land or condominium	Certified title, tax declaration for land and improvements, zonal value, assessor’s certification
Family home	Barangay certification, title, tax declaration, evidence of actual residence
Bank account	Bank certification showing balance at death
Listed shares	Brokerage certification or trading-price records
Unlisted shares	Stock certificates, corporate secretary’s certification, audited financial statements
Vehicle	Certificate of registration, official receipt, proof of value
Mortgage or loan	Loan agreement, notarized promissory note, proof of release and outstanding balance
Court case or receivable	Pleadings, judgment, contract, or accounting records
Foreign asset	Ownership record, valuation, foreign tax documents, apostille or consular authentication
Public-use transfer	Deed or testamentary provision identifying the government beneficiary
Property previously taxed	Prior estate or donor’s tax return, proof of payment, title and transfer records

The BIR’s 2026 Citizen’s Charter contains detailed estate ONETT and eCAR checklists.

Step-by-Step BIR Estate Tax Process

1. Obtain the death and civil registry records

Secure the death certificate and the records needed to identify the heirs and marital status. Philippine civil registry documents are commonly obtained from the Philippine Statistics Authority.

Errors in names, dates, or civil status should be addressed early. A mismatch between the death certificate, title, tax declaration, and heirship documents can delay BIR and Registry of Deeds processing.

2. Register the estate and secure its TIN

The estate is treated as a separate taxpayer for registration purposes. Current BIR registration requirements generally use BIR Form No. 1901 for an estate, together with the death certificate, proof of authority or heirship, and identification documents.

The ONETT officer may also require BIR Form No. 1904 or TIN verification for parties who do not yet have a TIN. Forms and documentary checklists can be revised, so the current checklist of documentary requirements should be used. (Bir Cdn)

3. Determine the proper RDO for ONETT processing

The estate ONETT case is generally processed by the RDO having jurisdiction over the deceased’s residence at the time of death.

If the deceased had no legal residence in the Philippines, the BIR Citizen’s Charter directs estate ONETT processing to RDO No. 39—South Quezon City.

Republic Act No. 11976, the Ease of Paying Taxes Act, now allows broader electronic or manual filing and payment through authorized channels. However, the valuation review, ONETT computation sheet, and eCAR processing remain connected to the proper jurisdictional RDO. Filing or paying through another authorized channel does not transfer the underlying ONETT case to that office. (Lawphil)

4. Collect ownership and valuation documents

Obtain certified titles, tax declarations, bank certifications, corporate records, and other asset documents.

This stage is frequently the longest because:

Old titles may remain in a grandparent’s name
Tax declarations may not reflect existing improvements
Banks may require separate heirship documents
A corporation may no longer be operating
Records may be held in another province or country
Foreign documents may need an apostille and translation

5. Prepare the settlement document

The tax process and the estate settlement process are related but separate.

Depending on the circumstances, the heirs may need:

An affidavit of self-adjudication for a sole heir
A deed of extrajudicial settlement
A judicial order of partition
Probate proceedings for a will
Judicial administration where debts, minors, disputes, or other complications exist

The BIR may process the tax computation using the required sworn declarations and supporting documents, but the eCAR and final transfer ordinarily require a legally sufficient instrument showing how the property will be transferred.

6. Prepare and file BIR Form No. 1801

Complete the estate tax return and attach the supporting schedules and documents. Retain a complete copy of everything submitted.

The BIR examiner will review:

Inclusion of assets
Valuation
Property classification
Claimed deductions
Surviving spouse’s share
Tax credits
Penalties, when applicable

7. Obtain the ONETT Computation Sheet

After evaluation, the BIR issues an ONETT Computation Sheet showing the tax, penalties, and other amounts payable.

The 2026 Citizen’s Charter lists an official processing period of approximately 20 days for an estate ONETT computation after submission of complete documents, subject to transaction volume, system availability, and the complexity of the case. This period does not include the weeks or months heirs may spend securing titles, certifications, settlement documents, corrections, and valuations.

8. Pay the estate tax and applicable fees

Payment may be made through authorized banks, Revenue Collection Officers, electronic BIR channels, or other payment facilities allowed by current rules.

Keep the validated return, payment confirmation, deposit slip, and electronic receipt. The BIR will require proof of payment for eCAR processing.

9. Apply for the eCAR

After payment and completion of the transfer documents, submit the eCAR requirements to the proper RDO.

The BIR Citizen’s Charter currently lists:

A certification fee of ₱100 per eCAR
Documentary stamp tax of ₱30 per eCAR
An official processing period of approximately seven days after complete submission

Processing may take longer when the documents contain inconsistencies or the BIR must verify property details.

10. Transfer each asset

The eCAR is then presented to the appropriate office or institution, such as:

Registry of Deeds for titled real property
Local assessor’s office for tax declarations
Land Transportation Office for vehicles
Corporate secretary or stock transfer agent for shares
Bank or financial institution for accounts and investments

Local transfer taxes, registration fees, documentary requirements, and publication requirements may still apply. Payment of estate tax alone does not automatically place every asset in the heirs’ names.

Estate Tax Filing Deadline

The estate tax return is generally due within one year from the date of death.

The Commissioner of Internal Revenue may grant an extension of up to 30 days for filing in meritorious cases. This is an extension to file, not an automatic waiver of interest or other consequences associated with delayed payment.

Families should not wait until the final month. Documents from banks, registries, corporations, local assessors, and foreign authorities can take substantial time to obtain.

What Happens When Estate Tax Is Filed Late?

A late estate may face:

A 25% surcharge for failure to file or pay on time
A 50% surcharge in cases involving willful neglect or a false or fraudulent return
Interest under Section 249 of the National Internal Revenue Code
Compromise penalties
Additional tax if assets were omitted or deductions were disallowed

Interest rates can differ depending on the period of delinquency because the law has changed over time. For older estates, the BIR may divide the computation into periods and apply the rate legally effective during each period. (Bir Cdn)

Can Estate Tax Be Paid in Installments?

The general rule is that estate tax is paid when the return is filed. However, when immediate payment would impose undue hardship, the BIR may approve an extension:

Up to five years when the estate is settled judicially
Up to two years when the estate is settled extrajudicially

The estate may also request:

Cash installment payment
Partial disposition of estate property
Issuance of an eCAR for particular property covered by an approved arrangement

Approval is not automatic. The BIR may require a written request, supporting financial information, a proposed payment schedule, and a bond of up to twice the tax due. Interest may continue to apply.

Can Money Be Withdrawn From the Deceased’s Bank Account?

Philippine tax rules allow a bank to permit withdrawal from a deceased depositor’s account within one year from death, subject to a 6% final withholding tax, provided the estate registration and TIN requirements are satisfied.

Amounts subjected to this final withholding mechanism are generally excluded from the gross estate to avoid taxing the same amount twice.

Alternatively, after the estate tax has been processed and the required eCAR or BIR authority has been issued, the bank may release the account under the ordinary estate settlement procedure. Banks may still require:

Death certificate
Settlement document or court order
Identification of heirs
Estate TIN
Indemnity agreement
Compliance with the bank’s own legal requirements

The heirs should compare the tax effect before selecting the withholding route, particularly when deductions might otherwise reduce the estate’s tax to zero.

Requirements for Heirs or Documents Abroad

An overseas heir does not always need to return to the Philippines. A representative may process the estate using a properly executed special power of attorney.

Documents signed or issued abroad generally require:

An apostille, when issued in a country participating in the Apostille Convention; or
Philippine consular authentication when the apostille procedure is unavailable

A foreign-language document may also require a certified English translation.

Examples include:

Foreign death certificates
Foreign marriage or birth certificates
Powers of attorney
Foreign court orders
Wills executed abroad
Foreign property records
Foreign tax payment certificates

The BIR’s current checklist expressly recognizes documents certified by a Philippine consular office or authenticated through an apostille.

Common Estate Tax Mistakes

Using the selling price instead of the prescribed property value

A family may agree that land is “worth only ₱2 million,” but the BIR will ordinarily use the higher applicable zonal or assessor’s value. A private family valuation does not control the tax computation.

Deducting the entire family home

When the family home is marital property, only the deceased spouse’s ownership interest is normally included and deducted. Claiming the full property value can overstate the deduction.

Treating every debt as deductible

A debt must be real, enforceable, and adequately documented. Unsubstantiated family advances and loans created after death are likely to be rejected.

Forgetting assets registered in another name

Property may legally belong to the deceased even when registered in another person’s name, and property registered in the deceased’s name may partly belong to the surviving spouse. Beneficial ownership and the marital property regime matter.

Omitting property because the heirs do not plan to transfer it yet

The gross estate should be complete. Leaving out an asset may lead to an additional estate tax return, penalties, and a separate eCAR process later.

Assuming zero tax means no filing is needed

The standard and family home deductions can reduce the tax to zero, but a return and eCAR may still be required to transfer land, shares, vehicles, and other registrable assets.

Paying estate tax before resolving ownership questions

Premature computation can lead to double counting or incorrect deductions when the title history, marital ownership, prior estate settlement, or inheritance chain has not been reviewed.

Confusing estate tax clearance with settlement among heirs

The eCAR proves compliance with the BIR’s tax requirements. It does not by itself determine whether a will is valid, resolve an heirship dispute, cure a defective extrajudicial settlement, or replace court approval when judicial settlement is required.

Frequently Asked Questions

How much is estate tax in the Philippines?

For deaths on or after January 1, 2018, estate tax is generally 6% of the net taxable estate after allowable deductions. Older deaths are governed by the estate tax law effective at the time of death.

Is the first ₱5 million of every estate automatically tax-free?

A citizen or resident estate receives a ₱5 million standard deduction. Other deductions may also apply. However, the estate must first include all taxable assets, and filing may still be required even when no tax remains payable.

Is the family home deduction separate from the ₱5 million standard deduction?

Yes. A qualified family home deduction of up to ₱10 million may be claimed in addition to the ₱5 million standard deduction, subject to the deceased’s ownership interest and documentary requirements.

Do heirs pay estate tax from their personal funds?

The estate is primarily responsible for the tax. The executor or administrator should pay before distributing property. An heir can have subsidiary liability up to the value of the property received from the estate. (Lawphil)

Can inherited land be sold before estate tax is paid?

A final registered sale normally cannot be completed while the title remains in the deceased owner’s name and no eCAR has been issued. In some cases, the estate may arrange a sale or partial disposition with BIR approval so that proceeds can be used to pay the tax, but the required settlement, BIR, and registration steps must still be followed.

Does an extrajudicial settlement automatically settle the estate tax?

No. An extrajudicial settlement identifies the heirs and division of property, but the estate must separately file the tax return, pay the tax and penalties, and obtain the eCAR.

What if one heir refuses to sign the extrajudicial settlement?

The tax return may still need to be filed to avoid further penalties. However, the property dispute may require judicial settlement or partition because an extrajudicial settlement ordinarily depends on the participation of all necessary heirs.

What if the deceased left no will?

Philippine intestate succession rules determine who inherits. The absence of a will does not remove the estate tax obligation. The heirs may use an extrajudicial settlement if the legal conditions are satisfied; otherwise, judicial settlement may be necessary.

Can the BIR issue an eCAR for only one property?

The BIR may issue an eCAR for a particular property under an approved partial disposition or installment arrangement. The estate must disclose all assets and comply with the conditions imposed by the BIR.

How long does the entire process take?

The BIR Citizen’s Charter provides official processing periods of about 20 days for the ONETT computation and seven days for eCAR issuance after complete documents are submitted. The full process often takes longer because securing titles, tax declarations, bank certifications, foreign records, settlement documents, publication, and corrections can take several weeks or months.

Key Takeaways

The applicable estate tax law is determined by the date of death.
For deaths on or after January 1, 2018, estate tax is generally 6% of the net taxable estate.
Citizens and residents are generally taxed on worldwide estate property; nonresident foreigners are generally taxed only on Philippine-situs property.
The basic deductions include the ₱5 million standard deduction, qualified family home deduction of up to ₱10 million, documented debts, and the surviving spouse’s net marital share.
A CPA-certified statement is generally required when the gross estate exceeds ₱5 million.
The estate tax return is generally due within one year from death.
A return and eCAR may still be required even when the estate tax payable is zero.
The BIR’s official processing period begins only after a complete and consistent set of documents has been submitted.
Estate tax clearance does not replace a valid extrajudicial settlement, judicial order, or other legally sufficient transfer document.
The estate tax amnesty period has ended; unresolved estates must now be handled under the applicable regular estate tax rules.