Estate Tax Philippines: Rates, Computation, Exemptions, and How to File (2026)
What is Estate Tax in the Philippines?
Estate tax is a tax on the right of a deceased person (the decedent) to transmit their estate to their heirs and beneficiaries. It is imposed on the net estate — the gross assets of the decedent minus allowable deductions — computed at the time of death. Under the TRAIN Law (Republic Act No. 10963, effective January 1, 2018), the estate tax rate was simplified to a flat 6% on the net estate.
Estate Tax Rate Under TRAIN Law
Before TRAIN (pre-2018): estate tax was computed using a graduated tax table ranging from 5% to 20%. Under TRAIN: a flat rate of 6% on the net estate. This simplification has made estate tax computation more straightforward, though the actual computation of gross estate and deductions remains complex for estates with multiple assets.
What is Included in the Gross Estate?
All property of the decedent at the time of death, wherever situated, for residents or citizens of the Philippines. This includes: real property (land, buildings) at fair market value; personal property (vehicles, jewelry, cash, bank accounts); shares of stock (book value or FMV, whichever is higher); business interests; receivables; and life insurance proceeds where the estate is the beneficiary.
Standard Deduction and Other Deductions
The TRAIN Law introduced a standard deduction of ₱5,000,000 — which applies to all estates without the need for documentation. Additional deductions include: claims against the estate (loans of the decedent); unpaid mortgages on included property; share of the surviving spouse in conjugal/community property (not subject to estate tax); funeral expenses (actual, up to ₱200,000 for deaths before TRAIN; replaced by standard deduction under TRAIN); and medical expenses (up to ₱500,000, for deaths before TRAIN).
Filing Deadline and Payment
The estate tax return must be filed AND the tax paid within 1 year from the date of death. Extensions of up to 30 days may be granted by the BIR Commissioner for valid reasons. The estate tax amnesty under RA 11956 (Estate Tax Amnesty Extension) for estates of decedents who died on or before May 31, 2022 extended amnesty until June 14, 2025 — check if further extensions are available.
Consequences of Non-Filing
If estate tax is not filed and paid, the estate cannot be settled and properties cannot be transferred to heirs. Titles cannot be transferred, bank accounts cannot be accessed, and vehicles cannot be re-registered. Surcharges (25% or 50% for fraud) and 20% interest per year accrue on unpaid estate taxes.
CPA-Lawyer Advantage in Estate Tax
Estate tax computation requires a thorough knowledge of both tax law and accounting — especially for complex estates with multiple assets, businesses, and outstanding liabilities. QSP's CPA-Lawyers compute estate tax accurately, maximize legitimate deductions, and represent estates in BIR examination.