Below is a comprehensive, practitioner-oriented overview of Estate Tax Rates and Filing Requirements in the Philippines, current as of 29 June 2025. It consolidates the governing statutes, Bureau of Internal Revenue (BIR) regulations, and key administrative practices.
1. Legal Foundations
| Authority | Key Provisions |
|---|---|
| National Internal Revenue Code (NIRC), 1997, as last amended by Republic Act No. 10963 (TRAIN Law, 2018) | §§ 84-97: definition of gross estate, allowable deductions, filing/payment rules, enforcement |
| Revenue Regulations (RR), notably RR 12-2018, 17-2021, 02-2023 | Implement flat 6 % rate; clarify documentary requirements and eCAR issuance |
| Revenue Memorandum Circulars (RMC), e.g., RMC 62-2022, 39-2024 | Frequently-asked-questions, eFPS/eBIRForms, installment/payment relief |
| Estate Tax Amnesty – RA 11213 (2019) as extended by RA 11569 (2021) and RA 11956 (2023) | Reduces/waives tax, interest, penalties for estates of decedents who died on or before 31 May 2022; availment period now until 14 June 2025 |
2. Persons & Property Subject to Estate Tax
- Resident Citizens – worldwide property.
- Non-resident Citizens & Resident Aliens – property situated in the Philippines.
- Non-resident Aliens – Philippine-situs realty, tangible personalty located here, and shares issued by Philippine corporations (regardless of where certificate is located).
Situs rules for securities and intangibles are found in NIRC § 104; special treaty relief may be available under double-tax agreements.
3. Determining the Gross Estate
Add the FMV¹ of all property owned at death plus certain deemed-included transfers:
| Category | Examples / Notes |
|---|---|
| Real property | FMV is the higher of zonal value and fair market value per latest tax declaration. |
| Personal property | Cash, deposits, jewelry, vehicles, shares, business interests. |
| Deemed transfers | Revocable transfers, transfers in contemplation of death, property passing under general power of appointment (§ 85[B]-[D]). |
| Proceeds of life insurance | Included if beneficiary is the estate, executor or administrator; excluded if irrevocably designated individual beneficiary (§ 85[E]). |
¹“FMV” means fair market value on the date of death.
4. Allowable Deductions → arrives at Net Estate
4.1 Standard & Family Home Deductions (TRAIN)
| Deduction | Amount | Conditions |
|---|---|---|
| Standard deduction | ₱ 5,000,000 | No substantiation needed. |
| Family home deduction | Up to ₱ 10,000,000 | Home must be the family residence; any excess value is taxable. |
4.2 Ordinary Deductions
- Funeral expenses – lower of actual or 5 % of gross estate, capped at ₱ 200,000.
- Judicial expenses of settlement.
- Debts & valid personal obligations (strict substantiation and “notarized at least 3 months before death” rule for loans).
- Claims against insolvent persons.
- Unpaid mortgages, taxes & casualty losses.
4.3 Special Deductions
- Vanishing deduction for property previously taxed (up to 100 % if inherited within 1 year).
- Transfers for public use.
- Net share in the conjugal/community property passing to the surviving spouse (mechanically equals ½ of common property unless separate regime applies).
- Medical expenses – repealed by TRAIN (no longer deductible).
5. Tax Rate Structure
| Date of Death | Applicable Rate | Threshold / Notes |
|---|---|---|
| On or after 1 Jan 2018 (TRAIN) | 6 % of Net Estate | Net Estate = Gross – deductions. No progressive tiers. |
| Before 1 Jan 2018 | Graduated schedule (5 %–20 %). | Estate Amnesty may be a better option. |
6. Estate Tax Amnesty (RA 11213 as amended)
- Coverage: Estates of decedents who died on or before 31 May 2022 with or without filed return.
- Rate: 6 % of Net Estate or 6 % of undeclared portion if a return already exists.
- Minimum tax: ₱ 5,000 per estate.
- Period to avail: until 14 June 2025 (non-extendible).
- Benefits: Immunity from civil, criminal, and administrative penalties; issuance of eCAR to transfer titles.
- Basis years: Use asset values at time of death (no inflation adjustment).
7. Filing & Payment Requirements
| Item | Requirement / Timeline | Form / System |
|---|---|---|
| Estate Tax Return | BIR Form 1801 to be filed within 1 year from date of death (extendible for meritorious cases; request extensions at least 15 days before due). | Manual, eBIRForms, or eFPS for large taxpayers. |
| Payment | Tax is due upon filing. Extensions to 2-year spread may be granted for undue hardship; installment up to 5 years if estate consists largely of illiquid assets. | At Authorized Agent Bank (AAB) of RDO; LANDBANK’s e-payment channels also accepted. |
| Documentary Requirements | Certified death certificate, TIN of decedent & heirs, Affidavit of self-adjudication or court-issued letters, schedules of assets & liabilities, certificates of property valuation (BIR zonal or assessor), CAR clearance for properties previously transferred, proof of deductible expenses, notarized debt instruments if liabilities claimed, and DSWD certification if minor/disabled heirs. | |
| Electronic Certificate Authorizing Registration (eCAR) | Issued per property after tax is paid → prerequisite for transfer with Registry of Deeds/Land Registration Authority or LTO/stock transfer agent. | |
| Notice of Death (when required) | For gross estates > ₱ 5,000,000 or estates with registered property – submit BIR Form 1801-A within 2 months after death. |
8. Administrative Penalties & Interest
- Surcharge: 25 % for late filing or payment; 50 % for willful neglect or fraudulent return.
- Interest: 12 % p.a. (double the legal interest rate) from 1 Jan 2018 onward until fully paid.
- Compromise penalties: per BIR table; typically ₱ 50,000-200,000 depending on estate size.
9. Cross-border & Special Issues
| Scenario | Treatment |
|---|---|
| Property in multiple countries | Claim pro-rata foreign tax credit (FTC) under § 86(C) capped at Philippine estate tax on same property. |
| Treaty override | Several PH tax treaties (e.g., PH-Germany) allocate estate-taxing rights; local heirs may obtain BIR ruling for confirmation. |
| Shares listed on PSE | Use closing price on date of death for valuation; stock transfer agent requires eCAR and tax-clearance letter. |
| Co-ownership vs. Trusts | Trust property where decedent retained control can be pulled into gross estate (§ 85). Documentation must clarify revocability and beneficial ownership. |
| Digital assets / crypto | Not yet specifically regulated; BIR requires declaration under personal property at FMV using reputable exchange rate on death date. |
10. Procedural Flowchart (Simplified)
- Inventory & valuation of assets/liabilities.
- Secure TIN for estate and non-TIN heirs.
- Prepare/validate deductions (standard, family home, ordinary, special).
- Compute Net Estate → 6 % tax (or amnesty option).
- File BIR Form 1801 + pay tax (cash or installment).
- Submit supporting docs to RDO – issuance of assessment notice, then eCAR.
- Transfer titles with Registry of Deeds/LRA, Land Transportation Office, corporate secretary, bank, etc.
11. Practical Tips & Common Pitfalls
- Substantiation is king. Missing loan documents, vague funeral receipts, or unsigned schedules are the chief causes of assessment.
- File even a “zero” return if deductions exceed assets; eCAR will not issue without it.
- Watch the 3-month notarization rule for debts: loans executed shortly before death are heavily scrutinized.
- Coordinate with the surviving spouse’s separate return where conjugal/community property regimes apply.
- Amnesty vs. regular return: weigh benefits if decedent died ≤ 31 May 2022—amnesty wipes penalties and dispute risk, but offers no deduction for interests/penalties already paid.
- Local transfer taxes: Real property also triggers 2 % local transfer tax and 0.5 % registration fee; factor these when budgeting.
- Estate cash flow: Heirs can deposit pay-in capital to estate or borrow under estate’s TIN to fund tax. Bank clearance requires BIR Allowance for Withdrawal (RMO 14-2016).
12. Quick Reference Checklist
- ☐ Death certificate & IDs
- ☐ Complete asset schedule (zonal & assessor values)
- ☐ Liabilities substantiated + 3-month rule tested
- ☐ Deduction caps: funeral 5 %/₱ 200k; family home ₱ 10 M
- ☐ Compute Net Estate → 6 %
- ☐ File BIR Form 1801 within 1 year (extend if needed)
- ☐ Pay or secure installment plan
- ☐ Obtain eCAR(s)
- ☐ Transfer titles & update tax declarations
Conclusion
Under the post-TRAIN regime, Philippine estate taxation is conceptually straightforward—a flat 6 % on the net estate—but compliance remains document-intensive. Early preparation of inventories, strict evidence of debts, and strategic use of the estate tax amnesty (up to 14 June 2025) can drastically reduce risk, cost, and delay for heirs.