NQa Legal Research

-ALL RIGHTS RESERVED-

June 19, 2019

1. Who Shall File?

The Estate Tax Return (BIR Form 1801) shall be filed in triplicate by:

1. The executor, or administrator, or any of the legal heir/s of the decedent,

whether resident or non-resident of the Philippines, under any of the following
situations:

a. In all cases of transfers subject to estate tax;

b. Regardless of the gross value of the estate, where the said estate consists of
registered or registrable property such as real property, motor vehicle, shares of
stock or other similar property for which a clearance from the BIR is required as a
condition precedent for the transfer of ownership thereof in the name of the
transferee; or

2. If there is no executor or administrator appointed, qualified, and acting within

the Philippines, then any person in actual or constructive possession of any
property of the decedent.

Taxpayers who are filing BIR Form 1801 are excluded in the mandatory coverage
from using the eBlRForms (Section 2 of RR No. 9-2016)

2. What are the Estate Tax rates?

The estate tax rates depend on the date of death. For those who died on January 1,
1998 and onwards, the following are the estate tax rates based on the net estate:

 Effective January 1, 1998 up to December 31, 2017 (RA No. 8424)

 Over But not over The tax shall Plus Of the excess
be over

0 200,000 Exempt

200,000 500,000 0 5% 200,000

500,000 2,000,000 15,000 8% 500,000

2,000,000 5,000,000 135,000 11% 2,000,000

5,000,000 10,000,000 465,000 15% 5,000,000

10,000,000 And Over 1,215,000 20% 10,000,000

Estate Tax Philippines Table 1: For decedents who died on January 1, 1998 and
onwards

3. When and Where to File and Pay

The Estate Tax Return (BIR Form 1801) shall be filed within one (1) year from
the decedent's death.  In meritorious cases, the Commissioner shall have the
authority to grant a reasonable extension not exceeding thirty (30) days for filing
the return.

The return shall be filed with any Authorized Agent Bank (AAB) of the Revenue
District Office (RDO) having jurisdiction over the place of domicile of the
decedent at the time of his death. If the decedent has no legal residence in the
Philippines, the return shall be filed with the Office of the Commissioner (RDO
No. 39, South Quezon City).

In case of a non-resident decedent with executor or administrator in the

Philippines, the return shall be filed with the AAB of the RDO where such
executor/administrator is registered or is domiciled, if not yet registered with the
BIR.

When the return is filed with an AAB, taxpayer must accomplish and submit BIR-
prescribed deposit slip, which the bank teller shall machine validate as evidence
that payment was received by the AAB. The AAB receiving the tax return shall
stamp mark the word “Received’’ on the return and also machine validate the
return as proof of filing the return and payment of the tax by the taxpayer,
respectively. The machine validation shall reflect the date of payment, amount
paid and transaction code, the name of the bank, branch code, teller’s code and
teller’s initial. Bank debit memo number and date should be indicated in the return
for taxpayers paying under the bank debit system.

Payments may also be made thru the epayment channels of AABs thru either their
online facility, credit/debit/prepaid cards, and mobile payments.

In case the available cash of the estate is insufficient to pay the total estate tax
due, payment by installment shall be allowed within two (2) years from the
statutory date for its payment without civil penalty and interest upon approved by
the concerned BIR Official.

The due date on filing and payment of the return/tax shall depend on the
applicable law at the time of the decedent’s death.

 Extension to File and Pay

When the Commissioner of Internal Revenue finds that the payment on the due
date of the estate tax or of any part thereof would impose undue hardship upon the
estate or any of the heirs, he may extend the time for payment of such tax or any
part thereof not to exceed five (5) years, in case the estate is settled through the
courts, or two (2) years in case the estate is settled extra-judicially. In such case,
the amount in respect of which the extension is granted shall be paid on or before
the date of the expiration of the period of the extension, and the running of the
Statute of Limitations for assessment as provided in Section 203 of the National
Internal Revenue Code shall be suspended for the period of any such extension.

Where the taxes are assessed by reason of negligence, intentional disregard of

rules and regulations, or fraud on the part of the taxpayer, no extension will be
granted by the Commissioner.

If an extension is granted, the Commissioner of Internal Revenue or his duly

authorized representative may require the executor, or administrator, or
beneficiary, as the case may be, to furnish a bond in such amount, not exceeding
double the amount of tax and with such sureties as the Commissioner deems
necessary, conditioned upon the payment of the said tax in accordance in the terms
of extension.
The application for extension of time to file the estate tax return must be filed with
the Revenue District Officer (RDO) where the estate is required to secure its
Taxpayer Identification Number (TIN) and file the tax returns of the estate. The
application shall be approved by the Commissioner or his duly authorized
representative.

4. Penalty

The penalties shall include 25% surcharge and 20% interest per year
(Under Secs. 248 and 249, respectively). If fraud is involved, the surcharge shall
be 50%. You may also pay compromise penalties..