Estate Tax Philippines: Rate, Deductions, and How to File in 2026

The Philippines imposes a flat 6% estate tax on the net taxable estate of every person who dies owning assets in the country. If you are an English-speaking expat, dual citizen, or foreign family member dealing with a death in the Philippines, understanding this tax is critical — missing the one-year filing deadline triggers a 25% surcharge plus 12% annual interest that compounds until you pay.

Here is how the estate tax works, what you can deduct, and how to file correctly.

The 6% Flat Rate Under the TRAIN Law

Before the Tax Reform for Acceleration and Inclusion (TRAIN) Law took effect in 2018, estate tax rates in the Philippines were graduated, ranging from 5% to 20% depending on the estate's value. The TRAIN Law simplified this to a single flat rate of 6% applied to the net taxable estate.

The net taxable estate is not the same as the gross estate. The BIR allows several deductions that can dramatically reduce — or even eliminate — the tax owed.

Standard Deductions That Reduce Your Tax Bill

The most impactful deductions available under the TRAIN Law:

• Standard deduction: PHP 5 million — every estate gets this automatically, no documentation needed beyond the tax return itself
• Family home deduction: up to PHP 10 million of the current fair market value of the family home, provided the deceased actually lived there
• Claims against the estate: legitimate debts the deceased owed at the time of death (mortgages, medical bills, personal loans with documentation)
• Claims against insolvent persons: amounts owed to the deceased that are uncollectible
• Funeral expenses: no longer separately deductible under TRAIN (absorbed into the standard deduction)
• Medical expenses: no longer separately deductible under TRAIN

For a typical estate worth PHP 15 million with a family home valued at PHP 8 million, the calculation works out:

Gross estate (PHP 15M) minus standard deduction (PHP 5M) minus family home (PHP 8M) = net taxable estate of PHP 2M. At 6%, the tax owed is PHP 120,000.

Without those deductions, the tax on the full PHP 15M would be PHP 900,000 — a difference of PHP 780,000.

BIR Form 1801: Where and How to File

Estate tax is filed using BIR Form 1801 at the Revenue District Office (RDO) that has jurisdiction over the deceased's legal residence — not where the death occurred or where the property sits.

Required attachments include:

• PSA death certificate (SECPA copy)
• TIN of the estate (apply at the same RDO using BIR Form 1904)
• Certified true copies of land titles and latest tax declarations for real property
• Bank certifications showing account balances at date of death
• The Deed of Extrajudicial Settlement or court order, if already executed
• Proof of deductions claimed

The filing deadline is one year from the date of death. The BIR can grant a two-year extension if you file a written request with justification before the original deadline expires.

What Happens If You File Late

Since the estate tax amnesty under RA 11956 expired on June 14, 2025, late filers now face the BIR's full penalty regime:

• 25% surcharge on the basic tax due, applied immediately
• 12% annual interest calculated from the date of death until full payment
• Compromise penalties based on the estate's total value

These penalties compound. An estate that owes PHP 300,000 in base tax and files three years late could face an additional PHP 75,000 in surcharges plus PHP 108,000 in interest — more than half the original tax bill added as penalties.

Estate Tax vs. Inheritance Tax

People searching for "inheritance tax Philippines" are looking for the same thing — the Philippines does not have a separate inheritance tax. The 6% estate tax is the only national tax on inherited assets. There is no tax on the heirs for receiving their share.

However, transferring specific assets (land, vehicles) requires additional taxes and fees: Documentary Stamp Tax (1.5% of property value), local transfer tax (0.5% to 0.75%), and Registry of Deeds registration fees. These are transfer taxes, not inheritance taxes, but they add to the total settlement cost.

The Direct Bank Withdrawal Exception

Under BIR Revenue Memorandum Circular No. 62-2018, heirs can withdraw from the deceased's bank accounts within one year of death without needing a full eCAR. The bank withholds 6% of the amount withdrawn and remits it directly to the BIR.

This sounds convenient, but there is a trade-off: direct withdrawals forfeit the standard and family home deductions on the withdrawn amount. If you withdraw PHP 5 million this way, the bank withholds PHP 300,000 in tax. Had you processed the same amount through a standard estate tax return, the PHP 5 million standard deduction could have zeroed out the tax entirely.

Use the direct withdrawal track only for urgent liquidity needs — funeral costs, outstanding medical bills — not for the bulk of the estate.

Planning Your Filing Strategy

The optimal approach for most families is to file the estate tax return within the one-year window, claim every available deduction, pay the reduced tax, secure the eCAR, and then proceed to property and bank account transfers.

The Someone Died in Philippines: English Speaker's Emergency Guide maps the complete estate settlement sequence — from death registration through BIR filing, bank access, and title transfers — with specific forms, deadlines, and agency contacts for each step.

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