VI.
Valuation
Section 88. Determination of the Value of the Estate. –
(A) Usufruct. – To determine the value of the right of
usufruct, use or habitation, as well as that of annuity, there
shall be taken into account the probable life of the
beneficiary in accordance with the latest Basic Standard
Mortality Table, to be approved by the Secretary of Finance,
upon recommendation of the Insurance Commissioner.
(B) Properties. – The estate shall be appraised at its fair
market value as of the time of death. However, the
appraised value of real property as of the time of death shall
be, whichever is higher of –
(1) The fair market value as determined by the
Commissioner, or
(2) The fair market value as shown in the schedule
of values fixed by the Provincial and City
Assessors.
VII. Exemption of Certain Acquisitions and Transmissions
Section 87. Exemption of Certain Acquisitions and
Transmissions. – The following shall not be taxed:
(A) The merger of usufruct in the owner of the naked title;
(B) The transmission or delivery of the inheritance or legacy
by the fiduciary heir or legatee to the fideicommissary;
(C) The transmission from the first heir, legatee or donee in
favor of another beneficiary, in accordance with the desire of
the predecessor; and
(D) All bequests, devises, legacies or transfers to social
welfare, cultural and charitable institutions, no part of the net
income of which inures to the benefit of any individual:
Provided, however, That not more than thirty percent (30%)
of the said bequests, devises, legacies or transfers shall be
used by such institutions for administration purposes.
VIII. Administrative Requirements
A. Computation of Tax
Section 84. Rates of Estate Tax. – There shall be levied,
assessed, collected and paid upon the transfer of the net
estate as determined in accordance with Sections 85 and 86
of every decedent, whether resident or non-resident of the
Philippines, a tax at the rate of six percent (6%) based on
the value of such net estate.
B. Filing of Estate Tax Return
Section 90. Estate Tax Returns. –
(A) Requirements. – In all cases of transfers subject to the
tax imposed herein, or 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 Bureau of Internal Revenue is required
as a condition precedent for the transfer of ownership
thereof in the name of the transferee, the executor, or the
administrator, or any of the legal heirs, as the case may be,
shall file a return under oath in duplicate, setting forth:
(1) The value of the gross estate of the decedent at
the time of his death, or in case of a non-resident,
not a citizen of the Philippines, of that part of his
gross estate situated in the Philippines;
(2) The deductions allowed from gross estate in
determining the estate as defined in Section 86;
and
(3) Such part of such information as may at the
time be ascertainable and such supplemental data
as may be necessary to establish the correct taxes.
Provided, however, That estate tax returns
showing a gross value exceeding Five million
pesos (PhP5,000,000) shall be supported with a
statement duly certified to by a Certified Public
Accountant containing the following:
(a) Itemized assets of the decedent with their
corresponding gross value at the time of his death,
or in the case of a non- resident, not a citizen of the
Philippines, of that part of his gross estate situated
in the Philippines;
(b) Itemized deductions from gross estate allowed
in Section 86; and
(c) The amount of tax due whether paid or still due
and outstanding.
(B) Time for filing. – For the purpose of determining the
estate tax provided for in Section 84 of this Code, the estate
tax return required under the preceding Subsection (A) shall
be filed within one (1) year from the decedent’s death.
A certified copy of the schedule of partition and the order of
the court approving the same shall be furnished the
Commissioner within thirty (30) after the promulgation of
such order.
(C) Extension of Time. – The Commissioner shall have
authority to grant, in meritorious cases, a reasonable
extension not exceeding thirty (30) days for filing the return.
(D) Place of Filing. – Except in cases where the
Commissioner otherwise permits, the return required under
Subsection (A) shall be filed with an authorized agent bank,
or Revenue District Officer, Collection Officer, or duly
authorized Treasurer of the city or municipality in which the
decedent was domiciled at the time of his death or if there
be no legal residence in the Philippines, with the Office of
the Commissioner.
1. BIR Form No. 1801 Estate Tax Return
2. Time of Filing and Payment
Section 90. Estate Tax Returns. –
(B) Time for filing. – For the purpose of determining the
estate tax provided for in Section 84 of this Code, the estate
tax return required under the preceding Subsection (A) shall
be filed within one (1) year from the decedent’s death.
A certified copy of the schedule of partition and the order of
the court approving the same shall be furnished the
Commissioner within thirty (30) after the promulgation of
such order.
Section 91. Payment of Tax. –
(A) Time of Payment. – The estate tax imposed by Section
84 shall be paid at the time the return is filed by the
executor, administrator or the heirs.
3. Extension of Time for Filing and Payment
Section 90. Estate Tax Returns. –
(C) Extension of Time. – The Commissioner shall have
authority to grant, in meritorious cases, a reasonable
extension not exceeding thirty (30) days for filing the return.
Section 91. Payment of Tax. –
(B) Extension of Time. – When the Commissioner 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 extrajudicially. 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
this 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 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 the tax and with such sureties as the
Commissioner deems necessary, conditioned upon the
payment of the said tax in accordance with the terms of the
extension.
4. Payment by Installment - §91(C)
Section 91. Payment of Tax. –
(C) Payment by Installment. — 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.
5. Place of Filing
Section 90. Estate Tax Returns. –
(D) Place of Filing. – Except in cases where the
Commissioner otherwise permits, the return required under
Subsection (A) shall be filed with an authorized agent bank,
or Revenue District Officer, Collection Officer, or duly
authorized Treasurer of the city or municipality in which the
decedent was domiciled at the time of his death or if there
be no legal residence in the Philippines, with the Office of
the Commissioner.
C. Liability for Payment of Tax
Section 91. Payment of Tax. –
(D) Liability for Payment – The estate tax imposed by
Section 84 shall be paid by the executor or administrator
before delivery to any beneficiary of his distributive share of
the estate. Such beneficiary shall, to the extent of his
distributive share of the estate, be subsidiarily liable for the
payment of such portion of the estate tax as his distributive
share bears to the value of the total net estate.
For the purpose of this Chapter, the term ‘executor’ or
‘administrator’ means the executor or administrator of the
decedent, or 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.
IX. Inhibitions, Responsibilities, Obligations in the Enforcement
of Estate Tax
A. 92, 94-97
Section 92. Discharge of Executor or Administrator
from Personal Liability. – If the executor or administrator
makes a written application to the Commissioner for
determination of the amount of the estate tax and discharge
from personal liability therefore, the Commissioner (as soon
as possible, and in any event within one (1) year after the
making of such application, or if the application is made
before the return is filed, then within one (1) year after the
return is filed, but not after the expiration of the period
prescribed for the assessment of the tax in Section 203 shall
not notify the executor or administrator of the amount of the
tax. The executor or administrator, upon payment of the
amount of which he is notified, shall be discharged from
personal liability for any deficiency in the tax thereafter
found to be due and shall be entitled to a receipt or writing
showing such discharge.
Section 94. Payment before Delivery by Executor or
Administrator. – No judge shall authorize the executor or
judicial administrator to deliver a distributive share to any
party interested in the estate unless a certification from the
Commissioner that the estate tax has been paid is shown.
Section 95. Duties of Certain Officers and Debtors. –
Registers of Deeds shall not register in the Registry of
Property any document transferring real property or real
rights therein or any chattel mortgage, by way of gifts inter
vivos or mortis causa, legacy or inheritance, unless a
certification from the Commissioner that the tax fixed in this
Title and actually due thereon had been paid is shown, and
they shall immediately notify the Commissioner, Regional
Director, Revenue District Officer, or Revenue Collection
Officer or Treasurer of the city or municipality where their
offices are located, of the nonpayment of the tax discovered
by them. Any lawyer, notary public, or any government
officer who, by reason of his official duties, intervenes in the
preparation or acknowledgment of documents regarding
partition or disposal of donation inter vivos or mortis causa,
legacy or inheritance, shall have the duty of furnishing the
Commissioner, Regional Director, Revenue District Officer
or Revenue Collection Officer of the place where he may
have his principal office, with copies of such documents and
any information whatsoever which may facilitate the
collection of the aforementioned tax. Neither shall a debtor
of the deceased pay his debts to the heirs, legatee, executor
or administrator of his creditor, unless the certification of the
Commissioner that the tax fixed in this Chapter had been
paid is shown; but he may pay the executor or judicial
administrator without said certification if the credit is
included in the inventory of the estate of the deceased.
Section 96. Restitution of Tax Upon Satisfaction of
Outstanding Obligations. – If, after the payment of the
estate tax, new obligations of the decedent shall appear,
and the persons interested shall have satisfied them by
order of the court, they shall have a right to the restitution of
the proportional part of the tax paid.
Section 97. Payment of Tax Antecedent to the Transfer
of Shares, Bonds or Rights. – There shall not be
transferred to any new owner in the books of any
corporation, sociedad anonima, partnership, business, or
industry organized or established in the Philippines any
share, obligation, bond or right by way of gift inter vivos or
mortis causa, legacy or inheritance, unless a certification
from the Commissioner that the taxes fixed in this Title and
due thereon have been paid is shown.
If a bank has knowledge of the death of a person, who
maintained a bank deposit account alone, or jointly with
another, it shall allow any withdrawal from the said deposit
account, subject to a final withholding tax of six percent
(6%). For this purpose, all withdrawal slips shall contain a
statement to the effect that all of the joint depositors are still
living at the time of withdrawal by any one of the joint
depositors and such statement shall be under oath by the
said depositors.
B. Final Withholding Estate Tax - §97 (supra)
[new BIR Form 1602]
X. Tax Amnesty on Estate Tax
REPUBLIC ACT NO. 11213
Presidential Veto Message on RA No. 11213
BIR Revenue Regulations No. 6-2019
BIR Revenue Memorandum Circular No. 68-2019
A. Coverage
B. Rate
C. Immunities
D. Exceptions
II. DONOR’S TAX
I. Basic Concepts
A. Donation
NCC
Article 725. Donation is an act of liberality whereby a
person disposes gratuitously of a thing or right in favor of
another, who accepts it. (618a)
1. Donation Mortis Causa
NCC
Article 728. Donations which are to take effect upon the
death of the donor partake of the nature of testamentary
provisions, and shall be governed by the rules established in
the Title on Succession. (620)
2. Donation Inter Vivos
NCC
Article 729. When the donor intends that the donation shall
take effect during the lifetime of the donor, though the
property shall not be delivered till after the donor's death,
this shall be a donation inter vivos. The fruits of the property
from the time of the acceptance of the donation, shall
pertain to the donee, unless the donor provides otherwise.
(n)
Article 730. The fixing of an event or the imposition of a
suspensive condition, which may take place beyond the
natural expectation of life of the donor, does not destroy the
nature of the act as a donation inter vivos, unless a contrary
intention appears. (n)
Article 731. When a person donates something, subject to
the resolutory condition of the donor's survival, there is a
donation inter vivos. (n)
II. Applicable Law
Section 98. Imposition of Tax. –
(A) There shall be levied, assessed, collected and paid upon
the transfer by any person, resident or non-resident, of the
property by gift, a tax, computed as provided in Section 99.
(B) The tax shall apply whether the transfer is in trust or
otherwise, whether the gift is direct or indirect, and whether
the property is real or personal, tangible or intangible.
Section 99. Rate of Tax Payable by Donor. –
(A In General. – The tax for each calendar year shall be six
percent (6%) computed on the basis of the total gifts in
excess of Two hundred fifty thousand pesos (PhP250,000)
exempt gift made during the calendar year.
(B) Any contribution in cash or in kind to any candidate,
political party or coalition of parties for campaign purposes
shall be governed by the Election Code, as amended.
Section 100. Transfer for Less Than Adequate and Full
Consideration. – Where property, other than real property
referred to in Section 24(D), is transferred for less than an
adequate and full consideration in money or money’s worth,
then the amount by which the fair market value of the
property exceeded the value of the consideration shall, for
the purpose of the tax imposed by this Chapter, be deemed
a gift, and shall be included in computing the amount of gifts
made during the calendar year: Provided, however, That a
sale, exchange, or other transfer of property made in the
ordinary course of business (a transaction which is a bona
fide, at arm’s length, and free from any donative intent), will
be considered as made for an adequate and full
consideration in money or money’s worth.
Section 101. Exemption of Certain Gifts. – The following
gifts or donations shall be exempt from the tax provided for
in this Chapter:
(A) In the Case of Gifts Made by a Resident. –
(1) Gifts made to or for the use of the National
Government or any entity created by any of its
agencies which is not conducted for profit, or to
any political subdivision of the said Government;
and
(2) Gifts in favor of an educational and/or
charitable, religious, cultural or social welfare
corporation, institution, accredited nongovernment
organization, trust or philanthropic organization or
research institution or organization: Provided,
however, That not more than thirty percent (30%)
of said gifts shall be used by such donee for
administration purposes. For the purpose of this
exemption, a ‘non-profit educational and/or
charitable corporation, institution, accredited
nongovernment organization, trust or
philanthropic organization and/or research
institution or organization’ is a school, college or
university and/ or charitable corporation, accredited
nongovernment organization, trust or philanthropic
organization and/ or research institution or
organization, incorporated as a nonstock entity,
paying no dividends, governed by trustees who
receive no compensation, and devoting all its
income, whether students’ fees or gifts, donation,
subsidies or other forms of philanthropy, to the
accomplishment and promotion of the purposes
enumerated in its Articles of Incorporation.
(B) In the Case of Gifts Made by a Non-resident not a
Citizen of the Philippines. –
(1) Gifts made to or for the use of the National
Government or any entity created by any of its
agencies which is not conducted for profit, or to
any political subdivision of the said Government.
(2) Gifts in favor of an educational and/or
charitable, religious, cultural or social welfare
corporation, institution, foundation, trust or
philanthropic organization or research institution or
organization: Provided, however, That not more
than thirty percent (30%) of said gifts shall be used
by such donee for administration purposes.
(C) Tax Credit for Donor’s Taxes Paid to a Foreign Country.
–
(1) In General. – The tax imposed by this Title
upon a donor who was a citizen or a resident at the
time of donation shall be credited with the amount
 of any donor’s tax of any character and description
imposed by the authority of a foreign country.
(2) Limitations on Credit. – The amount of the
credit taken under this Section shall be subject to
each of the following limitations:
(a) The amount of the credit in respect to
the tax paid to any country shall not
exceed the same proportion of the tax
against which such credit is taken, which
the net gifts situated within such country
taxable under this Title bears to his entire
net gifts; and
(b) The total amount of the credit shall not
exceed the same proportion of the tax
against which such credit is taken, which
the donor’s net gifts situated outside the
Philippines taxable under this Title bears
to his entire net gifts.
Section 102. Valuation of Gifts Made in Property. – If the
gift is made in property, the fair market value thereof at the
time of the gift shall be considered the amount of the gift. In
case of real property, the provisions of Section 88(B) shall
apply to the valuation thereof.
Section 103. Filing of Return and Payment of Tax. –
(A) Requirements. – Any individual who makes any transfer
by gift (except those which, under Section 101, are exempt
from the tax provided for in this Chapter) shall, for the
purpose of the said tax, make a return under oath in
duplicate. The return shall set forth:
(1) Each gift made during the calendar year which
is to be included in computing net gifts;
(2) The deductions claimed and allowable;
(3) Any previous net gifts made during the same
calendar year;
(4) The name of the donee; and
(5) Such further information as may be required by
rules and regulations made pursuant to law.
B) Time and Place of Filing and Payment. – The return of
the donor required in this Section shall be filed within thirty
(30) days after the date the gift is made and the tax due
thereon shall be paid at the time of filing. Except in cases
where the Commissioner otherwise permits, the return shall
be filed and the tax paid to an authorized agent bank, the
Revenue District Officer, Revenue Collection Officer or duly
authorized Treasurer of the city or municipality where the
donor was domiciled at the time of the transfer, or if there be
no legal residence in the Philippines, with the Office of the
Commissioner. In the case of gifts made by a non-resident,
the return may be filed with the Philippine Embassy or
Consulate in the country where he is domiciled at the time of
the transfer, or directly with the Office of the Commissioner.
Section 104. Definitions. – For purposes of this Title, the
terms ‘gross estate’ and ‘gifts’ include real and personal
property, whether tangible or intangible, or mixed, wherever
situated: Provided, however, That where the decedent or
donor was a non-resident alien at the time of his death or
donation, as the case may be, his real and personal
property so transferred but which are situated outside the
Philippines shall not be included as part of his ‘gross
estate’ or ‘gross gift’: Provided, further, That franchise
which must be exercised in the Philippines; shares,
obligations or bonds issued by any corporation or sociedad
anonima organized or constituted in the Philippines in
accordance with its laws; shares, obligations or bonds by
any foreign corporation eighty-five percent (85%) of the
business of which is located in the Philippines; shares,
obligations or bonds issued by any foreign corporation if
such shares, obligations or bonds have acquired a business
situs in the Philippines; shares or rights in any partnership,
business or industry established in the Philippines, shall be
considered as situated in the Philippines: Provided, still
further, that no tax shall be collected under this Title in
respect of intangible personal property: (a) if the decedent at
the time of his death or the donor at the time of the donation
was a citizen and resident of a foreign country which at the
time of his death or donation did not impose a transfer tax of
any character, in respect of intangible personal property of
citizens of the Philippines not residing in that foreign
country, or (b) if the laws of the foreign country of which the
decedent or donor was a citizen and resident at the time of
his death or donation allows a similar exemption from
transfer or death taxes of every character or description in
respect of intangible personal property owned by citizens of
the Philippines not residing in that foreign country.
The term ‘deficiency’ means: (a) the amount by which tax
imposed by this Chapter exceeds the amount shown as the
tax by the donor upon his return; but the amount so shown
on the return shall first be increased by the amount
previously assessed (or Collected without assessment) as a
deficiency, and decreased by the amounts previously
abated, refunded or otherwise repaid in respect of such tax,
or (b) if no amount is shown as the tax by the donor, then
the amount by which the tax exceeds the amounts
previously assessed, (or collected without assessment) as a
deficiency, but such amounts previously assessed, or
collected without assessment, shall first be decreased by
the amount previously abated, refunded or otherwise repaid
in respect of such tax.
III. Persons Liable
A. §98, NIRC
B. Tax Payable - §99, NIRC
C. Election Campaign Contributions - §99(B), NIRC, RA
7166
IV. Taxable Gifts
A. Definition - §104, NIRC
B. Valuation - §102, NIRC
V. Transfer for Inadequate Consideration
A. §100, NIRC
B. New paragraph on bona fide transaction
D. Sales of Shares of Stock for Inadequate Consideration
§7(c.1.4) RR No. 06- 2008
SEC. 7. SALE, BARTER OR EXCHANGE OF SHARES OF
STOCK NOT TRADED THROUGH A LOCAL STOCK
EXCHANGE PURSUANT TO SECS. 24(C), 25(A)(3), 25(B),
27(D)(2), 28(A)(7)(c), 28(B)(5)(c) OF THE TAX CODE, AS
AMENDED. —
(c.1.4) In case the fair market value of the shares of stock
sold, bartered, or exchanged is greater than the amount of
money and/or fair market value of the property received, the
excess of the fair market value of the shares of stock sold,
bartered or exchanged over the amount of money and the
fair market value of the property, if any, received as
consideration shall be deemed a gift subject to the donor’s
tax under Sec. 100 of the Tax Code, as amended.
VI. Exemption of Certain Gifts
A. In case of Residents - §101(A), NIRC
B. In case of Non-residents - §101(B), NIRC
VII. Repudiation of Inheritance: Tax Consequence
A. Right of Accretion
 NCC
Article 1015. Accretion is a right by virtue of which, when
two or more persons are called to the same inheritance,
devise or legacy, the part assigned to the one who
renounces or cannot receive his share, or who died before
the testator, is added or incorporated to that of his co-heirs,
co-devisees, or co-legatees. (n)

Article 1016. In order that the right of accretion may take

place in a testamentary succession, it shall be necessary:
(1) That two or more persons be called to the same
inheritance, or to the same portion thereof, pro
indiviso; and
(2) That one of the persons thus called die before
the testator, or renounce the inheritance, or be
incapacitated to receive it. (928a)

Article 1017. The words "one-half for each" or "in equal

shares" or any others which, though designating an aliquot
part, do not identify it by such description as shall make
each heir the exclusive owner of determinate property, shall
not exclude the right of accretion.

In case of money or fungible goods, if the share of each heir

is not earmarked, there shall be a right of accretion. (983a)

Article 1018. In legal succession the share of the person

who repudiates the inheritance shall always accrue to his
co-heirs. (981)

Article 1019. The heirs to whom the portion goes by the

right of accretion take it in the same proportion that they
inherit. (n)

Article 1020. The heirs to whom the inheritance accrues

shall succeed to all the rights and obligations which the heir
who renounced or could not receive it would have had.
(984)

Article 1021. Among the compulsory heirs the right of

accretion shall take place only when the free portion is left to
two or more of them, or to any one of them and to a
stranger.

Should the part repudiated be the legitime, the other co-

heirs shall succeed to it in their own right, and not by the
right of accretion. (985)

Article 1022. In testamentary succession, when the right of

accretion does not take place, the vacant portion of the
instituted heirs, if no substitute has been designated, shall
pass to the legal heirs of the testator, who shall receive it
with the same charges and obligations. (986)

Article 1023. Accretion shall also take place among

devisees, legatees and usufructuaries under the same
conditions established for heirs. (987a)

B. BIR Ruling 455-93 dated Nov 19, 1993

VIII. Filing of Returns and Payment of Tax

A. Imposition of Tax - §98, NIRC
B. Tax Rate - §99, NIRC
C. Tax Credit for Donor’s Tax Paid to a Foreign Country -
§101(c), NIRC
D. Filing and Payment - §103, NIRC
E. BIR Form 1800 Donor’s Tax Return