Estate Tax in the Philippines — 6%, Deductions, and the One-Year Deadline

In short

Rate: 6% of the net estate, under the TRAIN Law.
Standard deduction: ₱5,000,000, no substantiation required, for a resident or citizen decedent.
Family home: Deductible up to ₱10,000,000 of its current fair market value.
Deadline: File BIR Form 1801 and pay within one year of death. Extensions and instalment payment are possible.
Where you file: Since RA 11976 amended sec. 90(D), either electronically or manually — any authorised agent bank, an RDO through a Revenue Collection Officer, or an authorised tax software provider.
Bank withdrawals: An amount withdrawn under the 6% final withholding tax in sec. 97 is EXCLUDED from the gross estate (RR 12-2018), and that 6% is not creditable against the estate tax.
Amnesty: Expired 14 June 2025.

How the tax is computed

Estate tax is a tax on the privilege of transmitting property at death, not a tax on the heirs. Since the TRAIN Law it is a flat 6% of the net estate — the gross estate less the allowable deductions. For most ordinary Philippine estates the deductions are generous enough that the tax comes to little or nothing, which surprises families who have been putting off settlement for fear of the bill.

Step	What goes in
Gross estate	All property, real and personal, tangible and intangible, wherever situated for a citizen or resident; Philippine-situated property only for a non-resident alien
Less: standard deduction	₱5,000,000, with no substantiation required
Less: family home	Up to ₱10,000,000 of its current fair market value
Less: claims against the estate	Debts, unpaid mortgages, taxes and casualty losses, with substantiation
Less: transfers for public use	Bequests to the government for public purposes
Less: amounts received under RA 4917	Retirement benefits of employees of private firms, where included in the gross estate
Less: share of the surviving spouse	The spouse's one-half of the community or conjugal property
= Net estate	Taxed at 6%

Legal basis: National Internal Revenue Code secs. 84–86 as amended by RA 10963 (TRAIN Law). Deductions for non-resident aliens are more limited and are prorated.

Work a simple example. A decedent leaves a family home worth ₱4,000,000 and a bank account of ₱600,000, with no debts and no surviving spouse. Gross estate ₱4,600,000; less the family home deduction of ₱4,000,000 and the standard deduction of ₱5,000,000 — the net estate is nil, and so is the tax. The return still has to be filed, because without a filed return there is no eCAR, and without an eCAR nothing transfers.

Filing, deadlines and penalties

Item	Rule
Return	BIR Form 1801
Where to file and pay	Section 90(D) of the Tax Code, as amended by RA 11976 (the Ease of Paying Taxes Act), provides that the return is filed and the tax paid, either electronically or manually, with any authorised agent bank, the Revenue District Office through a Revenue Collection Officer, or an authorised tax software provider — except where the Commissioner otherwise permits. The old rule pointing only to the RDO of the decedent's domicile, and the surcharge for filing in the wrong venue, are gone. The eCAR is still processed by the RDO with jurisdiction over the property
Deadline to file and pay	Within one (1) year from the decedent's death
Extension to file	The Commissioner may allow a reasonable extension, not exceeding 30 days, in meritorious cases
Extension to pay	Up to 5 years if the estate is settled judicially, or 2 years if extrajudicially, where payment would impose undue hardship
Instalment payment	Cash instalments within 2 years from the deadline, without civil penalties and interest
CPA certification	Section 90(A) requires the return to be supported by a statement certified by a certified public accountant where the gross value of the estate exceeds ₱5,000,000
Late filing	A surcharge and interest under secs. 248 and 249 — ordinarily 25% (50% where the return is false or fraudulent) and interest at 12% per annum — plus a compromise penalty. Both the surcharge and the interest are computed on the tax legally due, so a nil-tax estate has no base for either, although the return is still required and a compromise penalty for late filing may still be assessed. A taxpayer qualifying as micro or small under RA 11976 is charged a reduced 10% civil penalty and interest at half the rate, under RR 6-2024

Legal basis: NIRC secs. 90–91 as amended by RA 10963 and, for the filing and payment venue in sec. 90(D), by RA 11976; Revenue Regulations No. 12-2018; Revenue Regulations No. 6-2024 on reduced penalties for micro and small taxpayers.

Three worked examples

Families overestimate the estate tax bill more consistently than any other figure in Philippine practice. Here is what it actually comes to.

Estate	Gross	Deductions	Net estate	Tax at 6%
A family home worth ₱4,000,000 and ₱600,000 in the bank; unmarried decedent, no debts	₱4,600,000	₱4,000,000 family home + ₱5,000,000 standard	₱0	₱0
A family home worth ₱12,000,000, a lot worth ₱3,000,000, ₱1,000,000 in the bank; unmarried decedent	₱16,000,000	₱10,000,000 family home cap + ₱5,000,000 standard	₱1,000,000	₱60,000
Married decedent under absolute community: community property of ₱10,000,000 including a family home worth ₱6,000,000	₱5,000,000 (the decedent's half)	₱3,000,000 (half the family home value, up to the cap) + ₱5,000,000 standard	₱0	₱0

Illustrative only. The family home deduction is capped at ₱10,000,000 of current fair market value, and for a married decedent it is the decedent's interest in the family home that is deducted. Claims against the estate, unpaid mortgages and other allowable deductions reduce the base further. Get an actual computation from the RDO.

The pattern is worth stating plainly: a very large share of ordinary Philippine estates owe no estate tax at all. What they owe is the filing. Families who delay for a decade to avoid a bill that was never going to arrive end up paying surcharge and interest on a nil-tax return, and living with property they cannot sell.

Bank accounts of the deceased

Under section 97 of the Tax Code as amended by the TRAIN Law, a bank that knows of the depositor's death may allow a withdrawal from the account subject to a final withholding tax of 6% on the amount withdrawn, provided the withdrawal is made within one year from the date of death. This replaced the old regime where accounts were frozen pending an eCAR, and it exists so families can reach funds for immediate expenses.

The consequence for the estate tax return is the point most often stated backwards. Revenue Regulations No. 12-2018 provides that amounts withdrawn from the deposit accounts of a decedent which have been subjected to the 6% final withholding tax under section 97 shall be EXCLUDED from the gross estate for purposes of computing the estate tax. They do not go into the gross estate and are not taxed again. The trade-off is that the 6% withheld is a final tax on that withdrawal: it is not creditable against the estate tax due on the rest of the estate, and it is not refundable if the estate turns out to owe nothing.

Route	Estate tax treatment of the deposit	Tax actually borne
Withdraw under sec. 97, with the bank withholding 6%	The amount withdrawn is excluded from the gross estate (RR 12-2018)	A flat 6% of the amount withdrawn, whatever the size of the estate. Not creditable, not refundable
Leave the deposit and claim it after the eCAR	The balance as at the date of death forms part of the gross estate and is taxed as part of the net estate	Effectively nil where the deductions wipe out the net estate; 6% of the net estate where they do not

Legal basis: NIRC sec. 97 as amended by RA 10963; Revenue Regulations No. 12-2018. The bank will want proof of death and of your relationship, and practice differs between institutions — ask the branch what it needs.

Non-resident decedents and property abroad

Who the decedent was determines what the Philippines taxes. This matters for the very large number of Filipino families with a parent who died overseas, or with a relative who became a foreign citizen.

Decedent	What is included in the gross estate	Deductions
Filipino citizen, resident or not	All property, real and personal, tangible and intangible, wherever situated	The full set, including the ₱5,000,000 standard deduction and the family home
Resident alien	All property wherever situated	The full set
Non-resident alien	Only property situated in the Philippines	A more limited set, prorated; a smaller standard deduction applies

Legal basis: NIRC secs. 85–86 as amended by RA 10963. For a non-resident alien decedent, sec. 86(B) as amended by the TRAIN Law allows a standard deduction of ₱500,000 rather than the ₱5,000,000 available to a citizen or resident, together with the prorated share of the deductions the section allows; the family home deduction is not available. Section 104 excludes intangible personal property situated in the Philippines under the reciprocity rule where the decedent's country grants a corresponding exemption to Filipinos.

Two further points. Intangible personal property of a non-resident alien situated in the Philippines may be excluded under the reciprocity rule, where the decedent's country grants a similar exemption to Filipinos. And a Filipino decedent's foreign assets are included here even though the foreign country will usually tax them too — check whether a tax treaty or the foreign tax credit under the NIRC relieves the double charge before paying twice.

For a non-resident decedent, the return is filed with the revenue district office designated for non-residents, or through the Philippine Embassy or Consulate. Heirs abroad who cannot come home appoint a representative by consularised or apostillised special power of attorney, which is also what the bank and the Register of Deeds will want to see.

Documents the BIR will require

PSA certificate of death.
TIN of the decedent and of the estate, and TINs of the heirs.
For a Rule 74 settlement or self-adjudication involving personal property, the sworn valuation of that personal property and the bond filed with the Register of Deeds.
Notarised extrajudicial settlement or affidavit of self-adjudication, or the court order in a judicial settlement, plus the affidavit of publication.
Certified true copies of the titles, latest tax declarations, and a certificate of no improvement where the lot is vacant.
Certificate of deposit balance as at the date of death, for each bank account.
Certificates of registration for vehicles, and stock certificates or a corporate secretary's certification for shares.
Proof of claims against the estate and of unpaid mortgages and taxes, with the substantiation the regulations require. Note that funeral, judicial and medical expenses are no longer deductible for deaths from 1 January 2018 — do not assemble receipts for them.
A statement certified by a certified public accountant where the gross value of the estate exceeds ₱5,000,000 (NIRC sec. 90(A)).
Sworn declaration of the estate's assets and liabilities.

The BIR publishes a checklist of documentary requirements for estate tax transactions and revises it periodically. Get the current one from the RDO before assembling anything.

Deductions that no longer exist

Guides written before 2018 — and a great deal of material that copies them — still list funeral expenses, judicial expenses of the testamentary or intestate proceedings, and medical expenses of the last illness as deductions from the gross estate. They were repealed by the TRAIN Law and are not part of the current computation. What replaced them is the ₱5,000,000 standard deduction, which requires no substantiation at all and is worth far more to an ordinary estate than the receipts ever were.

Deduction	Status for deaths from 1 January 2018
Standard deduction	₱5,000,000, no substantiation required, for a citizen or resident decedent
Family home	Deductible up to ₱10,000,000 of current fair market value
Claims against the estate, claims against insolvent persons, unpaid mortgages, taxes, casualty losses	Deductible, with substantiation
Transfers for public use, property previously taxed (vanishing deduction), amounts received under RA 4917	Deductible, subject to their own conditions
Share of the surviving spouse in the community or conjugal property	Deducted — it was never part of the estate
Funeral expenses	Repealed. Applicable only under the pre-TRAIN rules, for deaths occurring before 1 January 2018, subject to the law in force at the date of death
Judicial expenses of the settlement proceedings	Repealed. Same historical position as funeral expenses
Medical expenses of the last illness	Repealed. Same historical position as funeral expenses

Legal basis: NIRC sec. 86 as amended by RA 10963; Revenue Regulations No. 12-2018. Estate tax is computed under the law in force at the date of death, so for a death before 1 January 2018 the pre-TRAIN deductions and the graduated rates are the ones that apply to that estate.

If the death was years ago

This is the most common situation in Philippine practice: a parent died a decade ago, the title is still in their name, and the family has avoided the BIR out of fear. The position is better than most people assume. The 6% rate and the ₱5,000,000 standard deduction apply based on the current law for deaths from 1 January 2018 onward; for earlier deaths, the law in force at the date of death governs the computation, which for older estates means the pre-TRAIN graduated rates and smaller deductions. Surcharge and interest do accrue — but so does the standard deduction, and many estates still end up with a manageable figure.

Get an actual computation from the RDO or a tax practitioner before deciding it is unaffordable. The alternative — leaving it — means the property cannot be sold, mortgaged or transferred, and every year of delay adds interest and another generation of heirs whose signatures will eventually be needed.

Legal basis: National Internal Revenue Code secs. 84–97 as amended by RA 10963 (TRAIN Law); RA 11213 as amended by RA 11569 and RA 11956 (estate tax amnesty, expired 14 June 2025); Revenue Regulations implementing the estate tax and the amnesty.

Frequently asked questions

+How much is estate tax in the Philippines?

6% of the net estate under the TRAIN Law, for deaths from 1 January 2018. For earlier deaths, the law in force at the date of death applies.

+When is the estate tax return due?

BIR Form 1801 must be filed and the tax paid within one year of the decedent's death. Extensions to file (up to 30 days) and to pay (up to two or five years, depending on how the estate is settled) are available in meritorious cases.

+Is the estate tax amnesty still available?

No. The amnesty under RA 11213, as extended by RA 11569 and RA 11956, covered deaths on or before 31 May 2022 and expired on 14 June 2025. Unsettled estates now face the ordinary 6% tax, with the surcharge and interest under sections 248 and 249 computed on the tax actually due — which means nothing to compute where the deductions leave a nil net estate, though the return is still required and a compromise penalty for late filing may still be assessed.

+What deductions can the estate claim?

For a resident or citizen decedent dying on or after 1 January 2018: a ₱5,000,000 standard deduction requiring no substantiation, the family home up to ₱10,000,000, claims against the estate, claims against insolvent persons, unpaid mortgages and taxes, casualty losses, transfers for public use, the vanishing deduction, amounts received under RA 4917, and the surviving spouse's share of the community or conjugal property. Funeral expenses, judicial expenses and medical expenses of the last illness are not on that list — the TRAIN Law repealed them, and they apply only under the pre-TRAIN rules to deaths before 1 January 2018.

+Can we withdraw from the deceased's bank account?

Yes. Section 97 of the Tax Code as amended by the TRAIN Law lets a bank release funds from a deceased depositor's account subject to a 6% final withholding tax on the amount withdrawn, within one year of the death. Revenue Regulations No. 12-2018 then excludes the amount withdrawn from the gross estate for estate tax purposes — it is not taxed twice. The 6% is a final tax on that withdrawal: it cannot be credited against the estate tax due and it is not refunded if the estate ends up owing nothing, so for a small estate that would have been below the threshold anyway, the convenience costs 6%.

+Where do I file the estate tax return now?

Section 90(D) of the Tax Code, as amended by RA 11976 (the Ease of Paying Taxes Act), provides that the return is filed and the tax paid either electronically or manually — with any authorised agent bank, the Revenue District Office through a Revenue Collection Officer, or an authorised tax software provider, except where the Commissioner otherwise permits. The older requirement to file at the RDO of the decedent's domicile no longer states the exclusive venue, and the surcharge for filing in the wrong venue was removed. The eCAR is still processed by the RDO with jurisdiction over the property.

+What happens if we never pay the estate tax?

The property cannot be transferred, sold or mortgaged, because the Register of Deeds will not act without the eCAR. Surcharge and interest keep accruing, and as heirs die the number of signatories multiplies. Estates left for decades are among the hardest and most expensive problems in Philippine property practice.

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