REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUE
Quezon City
January 25, 2018

REVENUE REGULATIONS NO. 12-2018

SUBJECT: Consolidated Revenue Regulations on Estate Tax and Donor's Tax

Incorporating the Amendments Introduced by Republic Act No. 10963,
Otherwise Known as the "Tax Reform for Acceleration and Inclusion
(TRAIN) Law"

TO All Revenue Officially Employeesand OthersConcerned

SECTION 1. SCOPE. — Pursuant to the provisions of Sec. 244 of the National I nternal
Revenue Code of 1997, as amended (N I RC), and Sec. 84 of Republic Act No. 10963, otherwise
known as the "Tax Reform for Acceleration and Inclusion (TRAIN) Law", these Regulations
are hereby issued to consolidate the rules governing the imposition and payment of the estate
and donor's tax i ncorporati ng the provisions of the T RA I N Law, particularly the provisions i n
Chapters I and II of Title!!! of the N I RC, thereby repealing Revenue Regulations (RR) No. 2-
2003, as amended.

SEC. 2. RATE OF ESTATE TAX. — The net estate of every decedent, whether
resident or non-resident of the Philippines, as determined in accordance with the N I RC, shall
be subject to an estate tax at the rate of six percent (6%).

SEC. 3. THE LAW THAT GOV ERNS TH E IM POSITION OF ESTATE TAX. —

It is a well-settled rule that estate taxation is governed by the statute in force at the time of
death of the decedent. The estate tax accrues as of the death of the decedent and the accrual of
the tax is distinct from the obligation to pay the same. Upon the death of the decedent,
succession takes place and the right of the State to tax the privilege to transmit the estate vests
instantly upon death.

Accordingly, the tax rates and procedures prescribed under these Regulations shall
govern the estate of decedent who died on or after the effectivity date of the TRAIN Law.

SEC. 4. COMPOSITION OF THE GROSS ESTATE. — The gross estate of a

decedent shall be comprised of the following properties and interest therein at the time of
hi her death, including revocable transfers and transf ers for insufficient considerati on, etc.:

1. Residents and citizens— all properties, real or personal, tangible or intangible,

wherever situated.

2. Non-resident aliens — only properties situated in the Philippines provided, that,

with respect to intangible personal property, its inclusion in the gross estate is subject to
the rule of reciprocity provided for under Section 104 of the N I RC.