FS2223-ESTATETAX-18

BSA 2105 Atty. F. R. Soriano

ESTATE TAX RETURN

Who shall file

The Estate Tax Return (BIR Form No. 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.

This is in the case where there is a net taxable estate.

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

Thus, even if there is a negative estate because of the deductions allowed by law, the
estate tax return shall still be filed since the transfer of such registrable properties cannot be
effected without a Certificate Authorizing Registration (CAR) issued by the Bureau of Internal
Revenue.
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.

When to file
1. Within one (1) year from the decedent’s death.
2. In meritorious cases, the Commissioner or any Revenue Officer authorized by him, shall have
authority to grant a reasonable extension not exceeding thirty (30) days for filing of the return.

Where to file
1. Resident decedent
With the Accredited Agent Bank (AAB), Revenue District Officer or Revenue Collection
Officer having jurisdiction over the place of domicile of the decedent at the time of his death,
whichever is applicable, following prevailing collection rules and procedure. The executor or
administrator shall secure a new Tax Identification Number (TIN) for the estate from the Revenue
District Office where the decedent was domiciled at the time of his death.

2. Non-resident decedent (whether non-resident citizen or non-resident alien)

a. With an executor or administrator who is registered
With the Revenue District Office (RDO) where such executor or administrator is
registered and from which he shall secure the TIN for the estate.
b. With an executor or administrator who is not registered
With the RDO where such executor or administrator is domiciled and from which he
shall secure the TIN for the estate.
In case the non-resident decedent does not have an executor or administrator in the
Philippines, the estate tax return shall be filed with, and the TIN for the estate shall be secured,
from the Office of the Commissioner.

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CPA Statement

Aside from other documentary requirements, a CPA statement on the itemized assets of the decedent,
itemized deductions from the gross estate and the amount due if the gross value of the estate exceeds five
million pesos (P5,000,000.00).

Payment of estate tax

The estate tax shall be paid at the time the Estate Tax Return is filed by the executor, administrator or
the heirs. 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 approval by the concerned BIR Official.
When the Commissioner of Internal Revenue finds that the payment on the due date of the estate tax
or any part thereof would impose undue hardship upon the estate or of any of the heirs, he may extend the
time of payment of such tax or any part thereof not to exceed five (5) years, in case the estate is settled
judicially, i.e., through the courts, or two (2) years in case the estate is settled extra-judicially. Any amount
paid after the statutory date of the tax, but within the extension period, shall be subject to interest but not to
surcharge.

Bank withdrawal
1. Withdrawal of deposit of decedent before settling estate tax
If a bank has knowledge of the death of a person, who maintained a bank account alone, or
jointly with another, it shall allow the withdrawal from the said deposit account subject to
withholding tax of six percent (6%). If the account is in the name of two or more depositors, the 6%
withholding tax shall only be imposed on the share of the deceased in the joint bank account.
Under Revenue Regulation No. 8-2019 which took effect on July 11, 2019, the 6% tax
withheld by the bank on the deposit withdrawn may be claimed as tax credit against the estate tax
provided the bank deposit subjected to the withholding tax has actually been included in the gross
estate declared in the Estate Tax Return of the decedent.

2. Period to withdraw from the bank account

Withdrawing from the bank account without first settling the estate tax and the clearance from
the BIR shall be allowed within one (1) year from the date of the depositor’s death. Beyond the one
year period, the heirs cannot withdraw from the bank deposit, except to file the Estate Tax Return
and secure the BIR clearance, known as eCAR (electronic Certificate Authorizing Registration).

3. Tax Identification Number (TIN) for the estate

Revenue Memorandum Circular (RMC) No. 62-2018 dated June 28, 2018 mandates the bank
to require the executor, administrator, or any of the legal heirs applying for the withdrawal to present
a copy of the TIN of the decedent and BIR Form No. 1904 (Application for Registration as one-time
taxpayer) of the estate duly stamped received by the concerned RDO of the BIR in accordance with
the existing guidelines on the issuance of TIN. (Note: Upon the death of the decedent, the estate
now becomes the taxpayer.)

Civil penalties
In addition to the estate tax required to be paid, the following penalties shall be imposed:
1. Interest of twelve percent (12%) from the due date until paid. Deficiency interest and delinquency
interest under Section 249 Subsections (B) and (C), however, cannot be imposed simultaneously.
2. 25% surcharge in case of:

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a. Failure to file the return and pay the tax or installment due on or before due date.
b. Filing a return with an internal revenue officer other than those with whom it is required to be
filed, unless authorized by the Commissioner.
c. Failure to pay on time the full or part of the amount of tax shown on the return, or the full
amount of tax due for which no return is required to be filed on or before the due date.

d. Failure to pay the deficiency tax within the time prescribed for its payment in the notice of
assessment.
3. 50% penalty in case of:
a. Willful neglect to the file the return on time.
b. Willfully filing a false or fraudulent return.

4. Compromise penalty as provided under the applicable schedule for compromise penalty.

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