🔹 TIME FOR FILING THE ESTATE TAX RETURN

✅ Deadline:
 The estate tax return must be filed within one (1) year from the date of death.
 Before TRAIN Law: The deadline was six (6) months from the date of death.
 Now (TRAIN Law): Extended to one (1) year without penalties.
✅ Accrual of Estate Tax:
 The estate tax accrues immediately upon the death of the decedent.
 However, the obligation to file the return is within one (1) year.
📌 Key Case: Lorenzo vs. Posadas (64 Phil. 353)
 This case clarifies that the tax obligation arises at the time of death but the
return is only required to be filed within the prescribed period.
✅ Court Approval Requirement:
 If the court approves the project of partition, it must furnish a certified copy to
the Commissioner of Internal Revenue (CIR).
 This must be done within 30 days after the order is promulgated.
📌 Example:
 Juan passed away on January 1, 2023. His heirs must file the estate tax return by
January 1, 2024. Before the TRAIN Law, they would have needed to file by July 1,
2023 (six months).

🔹 EXTENSION OF TIME TO FILE THE ESTATE TAX RETURN

✅ Maximum Extension: 30 days (One-month extension)
✅ Who grants the extension?
 The Commissioner of Internal Revenue (CIR) or any authorized Revenue
Officer.
✅ Where to file the request?
 With the Revenue District Office (RDO) that has jurisdiction over the estate.
📌 Example:
 Maria’s father passed away on February 15, 2023. The estate tax return is due by
February 15, 2024. However, due to missing documents, she requests an
extension. The BIR grants her an additional 30 days, making the new deadline
March 16, 2024.

🔹 TIME FOR PAYMENT OF ESTATE TAX

✅ General Rule:
  The estate tax must be paid at the time of filing the return.
✅ Who pays?
 The executor, administrator, or heir(s).
📌 Example:
 Carlos inherited property worth ₱10 million from his late uncle. The estate tax
return was filed on August 30, 2023, so the estate tax must be paid on the same
day unless an installment payment arrangement is approved.

🔹 POSSIBLE RECITATION QUESTIONS & ANSWERS

1️⃣ When does the obligation to pay estate tax arise?
→ It accrues immediately upon the death of the decedent, but filing is required within
one (1) year.
2️⃣ What is the current deadline for filing the estate tax return?
→ One (1) year from the date of death (previously six months before TRAIN Law).
3️⃣ Is it possible to extend the deadline for filing the estate tax return?
→ Yes, but only for 30 days, and only if granted by the Commissioner of Internal
Revenue (CIR) or an authorized Revenue Officer.
4️⃣ Where should an application for an extension of time to file the estate tax return
be submitted?
→ At the Revenue District Office (RDO) where the estate is registered and required to
file tax returns.
5️⃣ Who is responsible for filing and paying the estate tax?
→ The executor, administrator, or heir(s).
6️⃣ When should the estate tax be paid?
→ It must be paid at the time the return is filed.
🔹 EXTENSION OF TIME TO PAY ESTATE TAX
✅ When is an extension allowed?
 If the payment imposes undue hardship on the estate or any heir.
✅ Extension Period:
 Judicial Settlement (through courts): Maximum of 5 years
 Extrajudicial Settlement: Maximum of 2 years
✅ Conditions for Extension:
 The application must be filed with the Revenue District Office (RDO) and
approved by the Commissioner or an authorized representative.
 If granted, the taxpayer must pay on or before the expiration of the extension
period.
  The statute of limitations for deficiency assessment is suspended for the
duration of the extension.
✅ Example:
 Ana’s father passed away, leaving an estate worth ₱20 million. The estate tax due
is ₱2 million, but the heirs are struggling financially. They apply for a 2-year
extension since they are settling extrajudicially. If approved, they must pay the full
amount by the end of the extension period.
✅ When is an extension NOT granted?
 If the request is due to:
o Negligence (e.g., failing to file estate tax returns on time)
o Intentional disregard of tax rules (e.g., ignoring tax obligations)
o Fraud (e.g., attempting to hide assets to lower tax liability)
✅ Bond Requirement:
 The Commissioner may require the executor, administrator, or heirs to provide a
bond (up to double the tax amount) as security for payment.
✅ Example:
 Juan is granted a 5-year extension to pay estate tax, but since the amount is large,
the BIR requires him to provide a ₱4 million bond (double the tax due) as a
guarantee.

🔹 PAYMENT OF ESTATE TAX BY INSTALLMENT & PARTIAL DISPOSITION

OF ESTATE
1. Cash Installment Option
✅ Conditions:
 Estate tax may be paid in installments within 2 years from filing the estate tax
return.
 The estate tax return must be filed within 1 year from the date of death.
 The installment schedule (monthly, quarterly, etc.) must be stated in the return
and approved by the BIR.
 If the full amount is not paid within 2 years, the balance becomes immediately
due and subject to penalties/interest.
 No penalties/interest apply if paid on time, but the Commissioner may still
enforce collection if necessary.
✅ Example:
 Lorna’s father left an estate worth ₱15 million, with a tax due of ₱1.5 million. The
heirs do not have enough funds, so they apply to pay in quarterly installments of
 ₱187,500 over two years. If they fail to complete payments within 2 years,
penalties and interest will apply.

2. Partial Disposition of Estate Option

✅ Selling part of the estate to pay estate tax
 The estate can sell real, personal, or intangible property to pay the estate tax.
 A written request must be submitted to the BIR, along with a notarized
undertaking that proceeds will be used exclusively for estate tax payment.
 Estate tax is allocated proportionally to the value of each property.
 The BIR issues an eCAR (Electronic Certificate Authorizing Registration)
after tax payment, allowing the sale of the property.
✅ Example:
 Ben left behind two properties: one worth ₱8 million and another worth ₱5
million. The estate tax due is ₱1.3 million. The heirs decide to sell the ₱8 million
property to cover the tax. They submit a request to the BIR for partial disposition.
After selling, they pay the proportionate tax and receive an eCAR, allowing the
transfer of ownership.
✅ If the sale is not enough to cover the estate tax:
 The remaining balance is immediately due with penalties and interest.
 The BIR may withhold eCARs for other properties until the full tax is paid.
✅ Example:
 Rosa’s family sells a car worth ₱1 million to pay part of the ₱2 million estate tax.
After the payment, an eCAR is issued for the car. However, they must still pay the
remaining ₱1 million tax to get eCARs for the other properties in the estate.

🔹 Possible Recitation Questions & Answers

1. What is the maximum extension period for paying estate tax in a judicial
settlement?
→ 5 years if settled through court.
2. What is the maximum extension period for paying estate tax in an
extrajudicial settlement?
→ 2 years if settled without court intervention.
3. Who approves the request for an extension of time to pay estate tax?
→ The Commissioner of Internal Revenue (CIR) or an authorized Revenue
Officer.
4. Under what circumstances will an extension NOT be granted?
→ If there is negligence, intentional disregard of tax laws, or fraud.
 5. What is required if an extension is granted?
→ The Commissioner may require a bond up to double the tax amount as
security for payment.
6. What are the two payment options if the estate does not have enough cash to
pay immediately?
→ (1) Cash Installment – Pay in 2 years in approved installments.
→ (2) Partial Disposition of Estate – Sell part of the estate to pay tax.
7. What happens if an installment plan is not fully paid within 2 years?
→ The remaining balance becomes due with penalties and interest.
8. What is an eCAR, and when is it issued?
→ An Electronic Certificate Authorizing Registration (eCAR) is issued by the
BIR upon proof of tax payment. It is required for selling estate properties.
🔹 REQUEST FOR EXTENSION OF TIME, INSTALLMENT PAYMENT &
PARTIAL DISPOSITION OF ESTATE
✅ 1. Who Approves the Requests?
 The Commissioner of Internal Revenue (CIR) or an authorized
representative approves requests for:
1. Extension to file the estate tax return
2. Extension to pay the estate tax
3. Payment by installment
 The request must be filed with the Revenue District Office (RDO) where the
estate secures its TIN and files the estate tax return.
✅ Example:
 Maria, the administrator of her father’s estate, requests a 6-month extension to
file the estate tax return. She submits the request to the RDO where her father was
domiciled. The Commissioner or an authorized officer must approve it before it
takes effect.

🔹 PLACE OF FILING THE ESTATE TAX RETURN & PAYMENT

✅ 2. Where Should the Estate Tax Return Be Filed?
🔹 For Resident Decedent:
 The executor/administrator must register the estate and secure a new TIN
from the RDO where the decedent was domiciled at the time of death.
 The estate tax return is filed and paid at:
o Accredited Agent Bank (AAB)
o Revenue District Office (RDO)
o Revenue Collection Officer (if no AAB is available)
✅ Example:
 Juan, a resident of Manila, passes away. His executor registers the estate with the
RDO in Manila, secures a new TIN, and files the estate tax return there.
🔹 For Non-Resident Decedent:
1. If there is an executor/administrator in the Philippines:
o The estate tax return is filed at the RDO where the executor or
administrator is registered.
o If the executor is not registered, the return is filed at the RDO where the
executor legally resides.
2. If there is NO executor/administrator in the Philippines:
o The return is filed with the Office of the Commissioner through RDO
No. 39 - South Quezon City.
✅ Example:
 John, a non-resident Filipino citizen, dies abroad. His executor in the Philippines
is registered in Cebu. The estate tax return is filed in the RDO where the executor
is registered (Cebu). If no executor is available, it must be filed through RDO No.
39 - South Quezon City.
🔹 Commissioner’s Power:
 The CIR has the power to allow a different filing venue if necessary.

🔹 LIABILITY FOR THE PAYMENT OF ESTATE TAX

✅ 3. Who is Responsible for Paying Estate Tax?
1. Primary Obligation:
o The executor or administrator of the estate has the primary responsibility
to pay the estate tax.
2. Subsidiary Liability of Heirs/Beneficiaries:
o The heirs or beneficiaries are secondarily liable for the portion of the
estate tax corresponding to their share.
o However, their liability cannot exceed the value of their inheritance.
✅ Example:
 A father leaves an estate worth ₱10 million, with an estate tax of ₱1 million. His
two children inherit ₱5 million each. If the administrator fails to pay the estate
tax, each heir is liable for up to their share of the tax (₱500,000 each), but no
more than their inheritance.
✅ 4. What if There is No Executor or Administrator?
  If no executor/administrator is appointed, qualified, or acting in the
Philippines, then:
o Any person in actual or constructive possession of the decedent’s
property must file the return.
✅ Example:
 Carlos dies, leaving no executor. His eldest son, who is managing the family
house, must file the estate tax return.
✅ 5. When Should the Estate Tax Be Paid?
 The estate tax must be paid before distributing the inheritance to the heirs or
beneficiaries.
✅ Example:
 A decedent leaves an estate with property and cash. Before distributing any shares
to the heirs, the estate tax must be settled first.
✅ 6. What Happens If There Are Multiple Executors/Administrators?
 If there are two or more executors/administrators, they are all severally liable
for paying the estate tax.
✅ Example:
 Three siblings act as co-administrators of their father’s estate. If one fails to pay
the tax, the BIR can collect from any of them.
✅ 7. Estate Tax Clearance Requirement
 The estate tax clearance from the Commissioner or RDO serves as proof that
the tax has been paid and allows the distribution of properties to the heirs.
✅ Example:
 Pedro’s estate cannot be distributed to his children until they obtain an estate tax
clearance from the BIR.

🔹 POSSIBLE RECITATION QUESTIONS & ANSWERS

🔸 General Questions
1. Who approves the request for an extension of time to file the estate tax
return?
→ The Commissioner of Internal Revenue (CIR) or an authorized
representative.
2. Where must the estate tax return be filed for a resident decedent?
→ With the RDO where the decedent was domiciled at the time of death.
3. Who must file the estate tax return if no executor or administrator is
appointed?
→ Any person in actual or constructive possession of the decedent’s property.
🔸 Liability & Payment
4. Who has the primary obligation to pay estate tax?
→ The executor or administrator of the estate.
5. What is the liability of an heir for unpaid estate tax?
→ The heir is subsidiarily liable, but only up to the value of their inheritance.
6. What happens if multiple executors or administrators exist?
→ All of them are severally liable for the estate tax.
🔸 Filing for Non-Resident Decedents
7. Where should the estate tax return be filed for a non-resident decedent with
an executor in the Philippines?
→ With the RDO where the executor or administrator is registered.
8. Where should the estate tax return be filed for a non-resident decedent with
NO executor in the Philippines?
→ Office of the Commissioner through RDO No. 39 - South Quezon City.
🔸 Extensions & Installments
9. What are the three types of requests related to estate tax payment?
→ (1) Extension to file the estate tax return
→ (2) Extension to pay the estate tax
→ (3) Payment by installment
10. Who has the authority to change the place of filing estate tax returns?
→ The Commissioner of Internal Revenue (CIR).
🔹 PAYMENT BY INSTALLMENT (Sec. 91(C), as amended)
✅ 1. Payment by Installment (Prior to 2018 - RR 2-2003)
 If the available cash in the estate is insufficient to pay the total estate tax, the
estate may pay in installments.
 The BIR will issue clearances per property as taxes are paid.
 The estate tax computation is always based on the cumulative net taxable estate.
 Late payments will incur penalties and interest, except if an extension is
approved by the Commissioner.
✅ Example:
 A decedent’s estate owes ₱2M in estate taxes, but only has ₱1M in liquid cash.
The estate pays ₱1M now and the rest in installments. The BIR issues clearances
only for the properties covered by the payments made.

✅ 2. TRAIN Law (RA 10963) - Installment Payments (2018 Onward)

 If the estate lacks sufficient cash, installment payment is allowed within two (2)
years from the statutory due date.
  NO civil penalties and NO interest apply if paid within this period.
✅ Example:
 An estate has ₱5M in taxes but only ₱3M in cash. The administrator applies for
installment payment and is given two years to complete the remaining ₱2M
without penalties or interest.

🔹 CIVIL PENALTIES AND INTEREST (RR 2-2003)

✅ 1. Interest and Penalty Rules
 If estate tax is paid after the statutory due date but within the extension
period, it will incur interest but NO surcharge.
 Penalties for late payment:
o 25% penalty if there is no fraudulent intent.
o 50% penalty if the taxpayer acted with fraud, malice, or false intent.
o 20% interest per year on the unpaid tax amount until fully paid.
✅ Example:
 An estate owes ₱1M in taxes and does not pay on time. If there’s no fraud, the
penalty is ₱250K (25%). If fraud is involved, the penalty is ₱500K (50%).
Additionally, 20% annual interest applies.

🔹 PAYMENT OF TAX BEFORE TRANSFER OF SHARES, BONDS, OR RIGHTS

(Sec. 97, as amended)
✅ 1. Restriction on Transfer of Shares, Bonds, or Rights
 Before transferring any shares, bonds, or rights in a corporation, partnership, or
business through inheritance or gift, the BIR must certify that all applicable
taxes have been paid.
 No registration of new ownership without tax clearance from the BIR
Commissioner.
✅ Example:
 A father dies, leaving stocks in a corporation to his son. Before the son can have
them registered under his name, the estate tax must be paid, and the BIR must
issue a tax clearance.

✅ 2. Tax on Bank Withdrawals Upon Death of Account Holder

 If a bank knows that a depositor has died, any withdrawal from their account is
subject to a final withholding tax of 6%.
  Withdrawal slips must contain a sworn statement confirming that all joint
depositors (if any) are still alive at the time of withdrawal.
✅ Example:
 A father and son have a joint bank account. If the father dies, the bank will
withhold 6% on any withdrawal, unless the son declares under oath that the father
is still alive.

🔹 POSSIBLE RECITATION QUESTIONS & ANSWERS

🔸 Installment Payment & Penalties
1. What are the conditions for paying estate tax by installment under RR 2-2003?
→ The estate must lack sufficient cash, and installment payments are allowed with
penalties and interest for late payments.
2. What change did the TRAIN Law (RA 10963) introduce for installment payments?
→ It allows installment payments within 2 years without civil penalties or interest.
3. What penalties apply if estate tax is paid late?
o 25% penalty (if no fraud).
o 50% penalty (if fraudulent intent is proven).
o 20% annual interest on the unpaid tax.
🔸 Transfer of Shares, Bonds, or Rights
4. Can an heir transfer inherited shares in a corporation before paying estate tax?
→ No. The BIR must first certify that the estate tax has been paid before ownership can
be transferred.
5. What is the tax rule for withdrawing money from a deceased person's bank
account?
→ The bank must withhold 6% tax on withdrawals if they are aware of the depositor’s
death.
6. What must be written on withdrawal slips for joint accounts?
→ A sworn statement that all joint account holders are still alive at the time of
withdrawal.