Where to File Estate Tax When the Estate Has Properties in Multiple Provinces in the Philippines

Introduction

In the Philippines, estate tax is a national tax imposed on the privilege of transferring the net estate of a deceased person to their heirs or beneficiaries. This tax is governed primarily by the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No. 10963 (TRAIN Law), Republic Act No. 11534 (CREATE Law), and subsequent revenue regulations issued by the Bureau of Internal Revenue (BIR). When a decedent's estate includes properties scattered across multiple provinces—such as real estate, bank accounts, or other assets—the question of where to file the estate tax return often arises. Contrary to common misconceptions, the filing location is not determined by the situs (location) of individual properties but by centralized rules based on the decedent's residence or other specified criteria. This article comprehensively explores the rules, procedures, requirements, and practical considerations for filing estate tax in such scenarios, ensuring compliance with Philippine tax laws.

Legal Basis for Estate Tax Filing

The foundational provisions for estate tax are found in Sections 84 to 97 of the NIRC. Specifically:

Section 90 mandates the filing of an estate tax return (BIR Form No. 1801) when the gross estate exceeds P200,000 or includes registered properties, regardless of value.
Revenue Regulations No. 12-2018 (as amended) and Revenue Memorandum Order No. 34-2021 provide detailed guidelines on filing, including the place of filing.
The tax is computed on the net estate after allowable deductions, at a flat rate of 6% under the TRAIN Law, applicable to deaths occurring on or after January 1, 2018.

Importantly, estate tax is a national tax administered by the BIR, not by local government units (LGUs). While real property taxes or transfer taxes may involve local treasurers or assessors, the estate tax return itself is filed centrally with the BIR. The multiplicity of property locations does not fragment the filing process; instead, it remains unified to avoid administrative complexity.

Determining the Place of Filing

The place of filing the estate tax return is governed by the decedent's status and residence at the time of death, not the distribution of properties. Here are the key rules:

1. For Resident Decedents

The return must be filed with the Revenue District Office (RDO) where the decedent was registered as a taxpayer at the time of death.
If the decedent was not registered with any RDO (e.g., not a taxpayer during their lifetime), the filing is at the RDO having jurisdiction over the decedent's place of residence at the time of death.
Residence refers to the decedent's domicile or habitual abode, not temporary stays. This is typically evidenced by the death certificate, barangay certification, or utility bills.
Example: If a decedent resided in Quezon City (Metro Manila) but owned farmlands in Nueva Ecija, condominiums in Cebu, and bank accounts in Davao, the filing is solely at the RDO for Quezon City (e.g., RDO No. 39 or as applicable), regardless of the properties' locations.

2. For Non-Resident Decedents

Non-resident citizens or aliens with Philippine properties: The return is filed with the RDO where the executor or administrator resides. If there is no executor/administrator in the Philippines, it is filed with RDO No. 39 (South Quezon City) or the Office of the BIR Commissioner in Quezon City.
For non-residents, the estate tax applies only to properties situated in the Philippines, but the filing remains centralized.
Example: A non-resident Filipino living abroad with real properties in multiple provinces (e.g., Batangas and Ilocos Norte) would have the return filed by their Philippine-based administrator at the administrator's RDO.

3. Special Cases

No Legal Residence in the Philippines: File with the Office of the Commissioner or RDO No. 39.
Estates Under Judicial Settlement: The court-appointed administrator files at the RDO based on the decedent's residence.
Extrajudicial Settlement: The heirs or executor handle the filing similarly.
If the decedent was a government employee or military personnel, special RDOs may apply (e.g., RDO for government officials), but the principle remains residence-based.

The rationale for this centralized approach is efficiency: the BIR avoids duplicate filings and ensures uniform valuation and assessment. Properties in multiple provinces may require local certifications for valuation, but these are submitted as attachments to the single return.

Filing Timeline and Requirements

Timeline

The estate tax return must be filed within one (1) year from the date of death (Section 90(B), NIRC, as amended).
Extensions may be granted for up to 30 days upon written request to the BIR Commissioner, but only for reasonable cause (e.g., complex estate inventory).
Late filing incurs penalties: 25% surcharge, 12% interest per annum, and possible compromise penalties.

Required Documents

Even with properties in multiple provinces, all documents are consolidated into one filing. Key requirements include:

BIR Form 1801 (Estate Tax Return), duly accomplished.
Death Certificate from the Philippine Statistics Authority (PSA).
Taxpayer Identification Number (TIN) of the estate (obtained via BIR Form 1904).
Inventory of the Estate: Detailed list of all assets, including:
- Real properties: Titles, tax declarations from provincial/municipal assessors in each location, and zonal valuations from the BIR (which may vary by province).
- Personal properties: Bank certifications, stock certificates, vehicle registrations, etc.
Proof of Deductions: Funeral expenses, medical costs, family home allowance (up to P10 million), standard deduction (P5 million), etc.
Deed of Extrajudicial Settlement or Court Order for judicial settlement.
Certified True Copies of property documents from relevant registries (e.g., Registry of Deeds in each province for real properties).
Appraisal Reports if fair market value disputes arise, potentially involving assessors from multiple provinces.
Certificate Authorizing Registration (CAR): Issued by the BIR after payment, necessary for transferring properties.

For properties in multiple provinces, heirs must gather documents from various LGUs, such as:

Tax clearances from each provincial treasurer.
Assessor's certifications for real property values.

However, these are supporting documents; the return is not filed separately in each province.

Payment of Tax

Payment is made simultaneously with filing, via authorized agent banks, BIR collection officers, or online through the eBIRForms or EFPS systems.
If the tax exceeds P2,000, electronic filing and payment are mandatory for certain estates.

Procedures for Filing

Secure TIN for the Estate: Apply at the relevant RDO.
Gather Documents: Collect valuations and certifications from all property locations. For real properties, use the higher of zonal value (BIR) or assessed value (LGU assessor).
Compute the Tax: Deduct allowable expenses from the gross estate to arrive at the taxable net estate, then apply the 6% rate.
File the Return: Submit physically or electronically at the designated RDO. If electronic, use eBIRForms.
Pay the Tax: Obtain the CAR upon full payment.
Transfer Properties: Use the CAR to register transfers with the Registry of Deeds in each property's province.

In cases of multiple provinces, coordination with local BIR revenue officers may be needed for zonal valuations, but the core filing remains at one RDO.

Challenges and Practical Considerations

Valuation Disputes

Zonal values differ by province, potentially leading to higher taxes for urban properties (e.g., Metro Manila vs. rural areas).
If BIR assessments are contested, appeals can be filed with the same RDO or escalated to the Commissioner.

Administrative Burdens

Traveling to multiple provinces for documents can be time-consuming. Heirs may engage lawyers or accountants familiar with BIR procedures.
For large estates, mandatory CPA certification of the return is required if the gross estate exceeds P5 million.

Penalties for Non-Compliance

Failure to file or underpayment can result in audits, additional assessments, and criminal liabilities under Section 255 of the NIRC.
Compromise settlements are available but do not excuse full payment.

Recent Developments

Under RR 12-2018, simplified returns and online tools have eased filing, but physical submissions for complex estates persist.
The BIR's Estate Tax Amnesty (extended under RA 11569 until June 14, 2023, but lapsed) allowed settlement of prior deficiencies; current estates must comply fully.

Conclusion

Filing estate tax in the Philippines when properties span multiple provinces is streamlined through a residence-based approach, ensuring a single point of contact with the BIR. This prevents fragmentation and promotes efficiency, though it requires meticulous document gathering from various locations. Heirs should consult tax professionals to navigate computations and avoid penalties. Compliance not only fulfills legal obligations but also facilitates smooth property transfers, preserving the decedent's legacy for future generations. For specific cases, direct consultation with the BIR is advisable to account for any updates in regulations.