Donor’s Tax FIRST DONATION OF THE YEAR

Nature of Donor’s Tax Gross Gift Pxxx

-Donation is an act of liberality whereby a person disposes gratuitously Less: Exemptions/Deductions (Xxx)
of a thing or right in favor of another, who accepts it (Art. 725 of the Pxxx
Civil Code). Less: Tax Exempt Gift (under TRAIN Law) (250,000)
-It is a tax imposed on the exercise of the donor's right during lifetime Net Taxable Gift Pxxx
to transfer Multiply: Donor’s Tax Rate 6% 6%
property to others in the form of gift. Donor’s Tax Pxxx
-Although the law used the term “act”, the law considers donation as a Less: Tax Credit (if applicable) (xxx)
“contract”, Donor’s Tax Payable Pxxx

Purposes of Donor’s Tax SUBSEQUENT DONATION(s) WITHIN THE YEAR

1. To supplement the estate tax
2. To prevent the avoidance of income taxes, Gross Gift, Current Pxxx
Less: Exemptions/Deductions, Current (xxx)
Elements of Taxable Donation Pxxx
1. Capacity of the donor to transfer property Add: Prior Gifts (within the year) XXX
2. Donative intent (not an absolute requirement; required only in Total Pxxx
direct gift) Less: Tax Exempt Gift (under TRAIN Law) (P250,000)
3. Delivery Net Taxable Gifts (cumulative) Pxxx
-The transfer of the property is completed by the delivery, either Multiply: Donor's Tax Rate 6%
actually or Donor’s Tax Due (cumulative) Pxxx
constructively, of the donated property to the done. Tax Paid — Prior Gifts (within the year) (xxx)
4. Acceptance of the gift by the donee Tax Credit (if applicable) (xxx)
-The transfer of property by gift is perfected from the moment the Donor’s Tax Payable Pxxx Pxxx
donor knows of the
acceptance by the donee,
NOTE: The computation of the donor's tax is on a cumulative basis
Formal Requisites over a period of one calendar year (regardless of the relationship of
Although the law used the term “act”, the law considers donation as a the donor and the donee).
“contract”, as shown by the fact that it requires acceptance.

DONOR’s TAX RATE

Section 99 of the Tax Code, as amended under RA 10963 (TRAIN Law),

provides:

A. In General — 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

(Php 250,000.00)

exempt gift made during the calendar year.

B. Any contribution in cash or in kind to any candidate, political party

In public document means the donation should be made in writing
of coalition of parties
through a duly executed notarized Deed of Donation signed by the
donor, the done/s, and witnesses. for campaign purposes shall be governed by the Election Code, as
amended
CLASSIFICATION OF DONORS
1. Citizen or Resident (RC/NRC/RA)
2. Non-resident Alien (NRA)
a. With reciprocity GROSS GIFT
b. Without reciprocity
Transfers subject to donor’s tax:
FORMAT OF COMPUTATION (Refer also to illustrations under RR 12-
1. Direct gift; ,
2018):
2. Gift through creation of a trust;

3. Condonation of debt;

4. Repudiation of inheritance if;

 a. Specifically and categorically done in favor of identified heirs; and

b. To the exclusion or disadvantage of other co-heirs.

5. Renunciation by the surviving spouse of his/her share in the

conjugal partnership or absolute community after the dissolution of
the marriage in favor of the heirs of the deceased spouse or any other
person/s;

6. Transfer for insufficient consideration

EXCEPTION: Real property classified as capital asset located in the

Phils.

FMV at the time of sale PXxx

Less: Selling Price (xxx)
Taxable Gift (excess of FMV over SP) Pxxx

 Gift from Common Property — the gift is taxable one-half

to each donor spouse.
 Donation between husband and wife during the
marriage
GENERAL RULE: The gift is not taxable, as it is declared void by law.
EXCEPTION: Moderate gifts between the spouses are valid.
-While spouses are separate taxpayers for donor's tax, a donation of
conjugal property signed only by the husband makes him the sole
donor, though the wife retains the right to challenge the donation's FILING and PAYMENT OF RETURN
validity under Philippine law. -The donor's tax return shall be filed within 30 days after the date the gift
is made or completed and the tax due thereon shall be paid at the same
EXEMPTIONS and/or DEDUCTIONS FROM GROSS GIFT time that the return is filed [Sec. 15(8) of RR 12-2018), Unlike in estate
Revenue Regulation No. 2-2003 provides that for purposes of the taxation, extension of the period to file and pay the donor's tax return is
donor's tax, “NET GIFT” shall mean the net economic benefit from not applicable.
the transfer that accrues to the donee.
Accordingly, the following shall be deducted from the Gross Gift: PLACE OF FILING
1. Encumbrances on the property donated assumed by the donee 1) Except in cases where the Commissioner otherwise permits, the return
2. Diminution of gift provided by the donor shall be filed and the tax paid to the following where the donor was
3. Gifts to the Government - gifts made to or for the use of the domiciled at the time of the transfer, or if there be no legal residence on
National Government or any entity created by any of its agencies the Philippines, with the Office of the Commissioner:
which is not conducted for profit. a. An authorized agent bank
4. Gifts to educational, charitable, religious corporation etc. b. Revenue District Officer
Requisites: c. Revenue Collection Officer or
a) Gifts in favor of the following entities: d. Duly authorized Treasurer of the City or municipality
i. Educational
ii. Charitable
iii. Religious
iv. Cultural
v. Social welfare
vi. Accredited non-government organization;
vii. Trust or Philanthropic organization;
viii. Research institution or organization;
b) Not more than 30% of the said gift shall be used for
administration purposes.
5. Exemption under Special / Other Laws
 1. International Rice Research Institute 2) In the case of gifts made by a nonresident, the return’' may be filed
2. Ramon Magsaysay Foundation with: Philippine Embassy or Consulate in the country where he is
3. Integrated Bar of the Philippines domiciled at the time of the transfer, or Directly with the officer of the
4. Development Academy of the Philippines
5. National Museum
6. National Library
7. Archives of the National Historical Institute
8. Museum of Philippine Costumes
9. Intramuros Administration

TAX CREDIT [Link]’S TAX PAID TO A FOREIGN COUNTRY

Donor’s Tax Credit pertains to donor's tax paid abroad which is
allowed as deduction from the donor's tax due computed under the
Tax Code, as amended. For this purpose, only resident or citizen can
claim donor's tax credit. Donor’s tax credit is computed as follows:

Commissioner.
 Estate Tax TYPES (Art. 778, Civil Code):
1. Testamentary. That which results from the designation of an heir,
TRANSFER TAXES made in a will executed in the form prescribed by law (the decedent
Transfer taxes are taxes imposed upon the gratuitous disposition of executed a last will and testament).
private properties or rights. Gratuitous transfer is one that neither 2. Legal or Intestate. That which is effected by operation of law or r
imposes burden nor requires consideration from transferee or recipient. transmission of properties where
 There is no will; or
The transfer of ownership is free because of the absence of financial
 If there is a will, the same is void or lost its validity, or nobody
consideration. Hence, gratuitous transfers are essentially donations. The succeeds in the will.
applicable taxes on gratuitous transfers are as follows: 3. Mixed. That which is effected partly by a will or by operation of
law.
 The value of obligations that may be transferred from the
decedent to his/her heir(s) should not exceed the value of the
properties and rights (inheritance) transferred.

WILL- an act whereby a person is permitted with the formalities

prescribed by law, to control to a certain degree the disposition of his
estate, to take effect after his death (Art. 783, CC) from the moment
of the death of the decedent, the rights to the succession are
transmitted, and the possession of the hereditary property is
deemed transmitted to the heir (Art. 777, CC).

Kinds of Wills:
1. Notarial or Ordinary or Attested will- is one which is executed in
accordance with the formalities prescribed by Art. 804 to 808 of the
New Civil Code. Itis a will that is created for the testator by a third
party, usually his lawyer, follows proper form, signed and dated in
Estate Tax front of the required number of witnesses (3 or more witnesses) and
Estate Tax is a tax imposed on the privilege that a person is given in acknowledged by the presence of a notary public.
controlling to a certain extent, the disposition of his property to take 2. Holographic Will- is a written will which must be entirely written,
effect upon death. As shown in the table above, Estate Tax is an excise dated and signed by the hand of the testator himself, without the
tax imposed on the act of passing the ownership of property at the time necessity of any witness. This kind of will does not need formalities
of death and not on the value of the property or right. because many people can recognize his handwriting and it can be
verified by a penmanship expert.
Accrual
Donor's tax accrues upon the decedent's death, regardless of when the Elements of Succession
beneficiary receives the estate, as the right to tax the estate's Succession takes place if the following elements are present:
transmission vests immediately upon death. a. DECEDENT - the person whose property is transmitted through
succession, whether or not he left a will (Art. 775, Civil Code of the
Filing of Estate Tax Return: Phils.).
 Decedent died before 2018: within 6 months after death b. HEIR - the person called to the succession either by the provision
 Decedent died on or after Jan. 1, 2018: within 1 year from date of a will or by operation of law (Art. 782, Civil Code of the Phils).
of death c. ESTATE (Inheritance) - refers to all the property, rights and
 Law to be applied. The law/statute in force as of the date of obligations of a person which are not extinguished by his death (Art.
death of ‘the decedent (RR 12-2018). 776, Civil. Code of the Phils).

 The accrual of the tax is distinct from the obligation to pay Decedent's Estate
the same (filing period) 1. LEGITIME is the portion of the testator’s property which could not
 Under meritorious cases (to be determined by the BIR), be disposed of freely because the law has reserved it for the
filing of estate tax return may be extended for a period of
compulsory heirs. (Art. 886, CC).
not more than 30 days. This provision is not mandatory and
a was not repealed under the TRAIN Law. Thus, whether 2. FREE PORTION is that part of the whole estate which the testator
the filing shall be extended solely depends on the BIR: could dispose of freely through written will irrespective of his
relationship to the recipient.
 Taxpayer. The “estate” of the decedent as a juridical person
 Personal obligation to file and pay the applicable taxes: Kinds of Heirs
 Primarily liable: Administrator or executor 1) Compulsory Heirs. They inherit with or. without a will.
 Secondarily liable: Any of the heirs  Primary Compulsory Heirs
a. Legitimate [Link] descendants
Succession b. Illegitimate children
it is a mode of acquisition by virtue of which the property, rights and c. Widow or widower
obligations to the extent of the value of the inheritance, of a person are  Secondary Compulsory Heirs
transmitted through his death to another or others either by will or by a. In default of legitimate children and descendants,
operation of law [Art. 774, Civil Code (CC) of the Philippines]. legitimate parents and ascendants
b. The compulsory heirs are entitled to their legitime, with or
without a will, unless validly “dis-inherited”.
2) Voluntary Heirs.
They inherit only if they are in the will.
3) Intestate Heirs
The compulsory heirs in testamentary succession are also heirs in intestate succession. They are entitled to their legitime.
However, a5 to the free portion of the estate, it shall be distributed to the following intestate heirs as follows (order of priority) in the absence of a
valid will
a. Legitimate children
b. Legitimate parents
c. Illegitimate children
d. Spouse
e. Brothers or sisters
f. Relatives by consanguinity up to 5th civil degree
g. State

Note:
 In intestate succession, the distribution of the free portion follows an order of priority, with closer relatives inheriting before more distant
ones, except when representation applies.

 An adopted child succeeds to the property if the adopting parents in the same manner as a legitimate child.

FORMAT OF COMPUTATION:
UNMARRIED DECEDENT:

Gross Estate Pxx

LESS: Ordinary Deductions (xx)
Special Deductions (xx)
Net Taxable Estate Pxx
x Estate Tax rate 6% 6%
Estate Tax Due Pxx
Less: Estate tax credit: (xx)
Estate Tax Payable Pxx

*Intangible properties including rights accruing before death,

claims against insolvent persons, RA 4917, and receivable as
proceeds from life insurance taken out by the decedent.
**Refer to certain transfers made before death but will take
effect only upon death (transfer mortis causa) as well as
transfer under general power of appointment, transfers
made to qualified charitable organizations and transfer for
public use/purpose.

ESTATE TAX RATE

The estate tax rate beginning January 1, 2018 or upon the
effectivity of RA 10963 (TRAIN Law) is 6% based on the value
of the net estate as presented in the foregoing format of
computing the estate tax due.

GROSS ESTATE (Sec. 85 a the Tax Code, as amended)

Consists of all properties and interests in properties of the
decedent at the time of his death as well as properties
transferred during lifetime (only in form), but in substance
was only transferred at the time death.

1. Components of the Gross Estate

PROPERTIES EXISTING AT THE TIME’ OF DEATH SUCH AS:
a. Real property and other tangible Personal Property
b. Decedents interests and Intangibles * Properties outside the Philippines of a non-resident alien decedent
 Decedent's Interest -Refers to the extent of equity or (Sec. 104)
ownership participation of the decedent on any property * Intangible personal property in the Philippines of a non-resident
physically existing and present in the gross estate, whether alien when the rule of Reciprocity applies (Sec. 104)
or not in his possession, control or dominion. It also refers to
the value of any interest in property owned or possessed by b. UNDER SECTION 87 of the Tax Code, as amended
the decedent at the time of his death (interest having Nelie: 1) The merger of the usufruct (right to use) in the owner of the naked
or capable of being valued, transferred) title.
Intangible Properties considered Located in the Philippines: 2) The transmission from the first heir, legatee or donee in favor of
 Franchise which must be exercised in the Philippines; * — another beneficiary in accordance with the will of the predecessor.
Shares, obligations or bonds issued by a any corporation or This type of transfer is most commonly known as “transfer under
sociedad anonima organized or constituted in the Special Power of Apponinertt (SPA)”.
Philippines; GPA vs SPA: :
 Shares obligations or bonds issued by any foreign  GPA = inclusion to the gross estate
corporation, at least 85% of the business of which is located  SPA = exclusion from the gross estate
in the Philippines; 3) The transmission or delivery of the inheritance or legacy of the
 Shares, obligations, or bonds issued by any foreign fiduciary heir or legatee to the fedeicomissary.
corporation if such shares, obligations, or bonds have  This is the same with SPA above. The only difference is, in
acquired a business situs (used in the furtherance of its fideicomissary transfer, the relationship of the donor and donee is only
business in the Philippines) in the Philippines; one degree apart (i.e., from a Parent to his/her son)
 Shares or rights in partnership, business or industry 4) All bequests, devices, legacies or transfers to social welfare; cultural
established in the Philippines. and charitable institutions, provided:
c. Properties transferred gratuitous/y during lifetime, but in substance,  No part of the net income of said institutions inure 2 t0 the
transferred benefit of any individual;
upon death:  Not more than 30% of such transfer ‘shall be used for
1. Transfer in contemplation of death — the thought of death must be administration purposes.
the
controlling motive which induces the disposition of the property. c. UNDER SPECIAL LAWS
EXCEPTION: When the transfer of property is a bona fide sale for an  Proceeds of life insurance and benefits received by members
adequate and full consideration in money or money's worth. of the GSIS (RA728).
2. Transfer with retention or reservation of certain right — allows the  Benefits received by members from the SSS by reason of
transferor to continue enjoying, possessing or controlling the property death (RA1792).
(beneficial ownership) because only the naked title has been  Amounts received from Philippine and United States
transferred. governments for war damages.
3. Revocable transfer — decedent transfers the enjoyment of his  Amounts received from United States Veterans
property .to another, subject to his right to revoke the transfer at will, Administration.
with or without notifying the transferee, any time before he dies.  Benefits received from the Philippines and US government
NOTE: Items 2 and 3 do not actually convey full ownership over the for damages suffered during World War II (RA227).
property transferred, hence, still part of the gross estate of the  Retirement benefits of officials/employees of a private firm
transferor, (RA4917).
4. Property passing under General Power of Appointment (GPA).  Payments from the Philippines of US government to the legal
5. Transfers for insufficient consideration - not a bona fide sale for an heirs of deceased of World War II Veterans and deceased
adequate and full consideration in money or money's worth [sale of civilian for supplies/services furnished to the US and
Property at substantially below its fair market value (FMV)}:  Philippine Army (RA136) :
AMOUNT INCLUDED IN GROSS ESTATE:  Proceeds of life insurance under a group insurance taken out
FMV at the time of death by employer (not taken out upon his life)
Less: Selling Price  Transfers by way of bona fide sales
Excess of FMV over SP  Transfer of [Link] the National government or to any of
(Included in Gross Estate) its political subdivisions.
6. Proceeds from Life Insurance (on insurance under policies taken out  Personal Equity and Retirement Account (PERA) assets of the
by the decedent upon his own life). The following are included in the decedent-contributor (RA No.9505).
gross estate!  Compensation paid to private and public health workers who
a. Whether designated as REVOCABLE or IRREVOCABLE when the contracted Covid-19 (in case of death) under RA 11494, also
beneficiary is the: known as BAYANIHAN ACT II.
* Estate of the deceased
* His executor; or -
* Administrator
b. When the beneficiary is a third. person (other those mentioned in
letter “a”) and the designation is REVOCABLE.

2. Exemptions and Exclusions from Gross Estate

a. UNDER SECTION 85 and 104 of the Tax Code, as amended
* Capital or exclusive property of the surviving spouse [Sec.85(H)]
THE COMPOSITION OF THE ESTATE TAX MAY BE SUMMARIZED AS 3. BY CUSTOMS OR TRADITIONS
FOLLOWS:

Decedent Gross Estate

 Citizen or 1. Property (Real or Personal) property
Resident wherever
alien Situated
2. Intangible personal property
wherever situated
 Nonresident 1. Real property situated in the
alien Philippines
2. Tangible personal property situated
in the Philippines
3. Intangible personal property with
situs in the Philippines, unless
excluded on the basis of reciprocity as
described below.

RECIPROCITY CLAUSE — No tax shall be imposed with respect to

intangible personal properties of a nonresident alien (NRA) decedent
situated in the, Philippines:
1) When the foreign country, where such NRA is a resident and citizen, ALLOWABLE DEDUCTIONS DEFINED
does not impose transfer tax with Deductions, generally presumed common, are subtracted from the
respect to intangible personal properties of Filipino citizens not gross estate to determine the net taxable estate, as allowed by the
residing in that country; or estate tax law.
2) When the foreign country imposes transfer taxes, but grants similar
exemption with respect to intangible ORDINARY DEDUCTIONS — classified as exclusive or common seek
personal properties of Filipino citizens not residing in that country. 1. LOSSESS, INDEBTEDNESS, TAXES, etc. (LITe)
Casualty Losses
VALUATION OF GROSS ESTATE (Sec. 88 of the Tax Code, as amended)  Requisites:
 In General — fair market value upon death. Incurred during the settlement of the estate. Settlement
 Personal Properties — Fair market value period is the period allowed by law to file and pay the estate
 Real Property — the higher amount between: tax as follows:
a. e Fair Market Value  Decedent died before 2018 - within six months (6)
b. e Zonal Value after death
 Shares of stock  Decedent died on or after Jan. 1, 2018 - within one
a. Traded in the Local Stock Exchange (LSE) — mean value between the (1) year after death
highest and lowest quotations nearest the date of death if none is  Arising from fires, storms; shipwreck, or other casualties, or
available on the date of death itself. from robbery, theft or embezzlement;
b. Not traded in the local stock exchange:  Not compensated by insurance;
1. Common (ordinary) shares — Book value  Not claimed as deduction for income tax purposes;
2. Preferred (preference) shares — Par Value  Incurred not later than the last day for the payment of the
 Usufruct — based on latest Basic Mortality Table to be estate tax.
approved by the Secretary of Finance, upon * Amount deductible — the amount deductible is the value of the
recommendation of the Insurance Commissioner. property lost.

PROPERTY RELATIONSHIP BETWEEN SPOUSES Indebtedness or Claim Against Estate

(Art. 74 of the Family Code) Requisites:
Article 74 of the Family Code provides that the property relationship 1) Personal debt of the decedent existing at the time of his death;
between husband and wife shall be governed in the following order: 2) Contracted in good faith;
By marriage settlements executed before the marriage; 3) Must be valid in law and enforceable in court;
By the provisions of this Code (Family Code); and » By the local 4) Must not have been condoned by the creditors;
customs 5) Must not have prescribed;
1. BASED ON AGREEMENT 6) Substantiation Requirements:
If there was an agreement entered into by the parties before marriage,
apply the type of settlement entered into by the parties such as: Unpaid Mortgage
* Absolute Community of Property (ACoP) .Requisites:
* Conjugal Partnership of Gains (CPG) a. The fair market value of the mortgaged property undiminished by
* Complete Separation the mortgage indebtedness should be included in the gross estate;
2. BY OPERATIONS OF LAW (Family Code) b. Contracted in good faith; and
In the absence of an agreement, the marriage settlement will depend c. Foran adequate and full consideration.
on the Amount Deductible — amount of unpaid mortgage.
date of marriage as provided under the law (Family Code) as follows:
Date: Before the effectivity of the NFC (Aug. 3, 1988), apply CPG
Date: On or after the effectivity of the NFC (Aug. 3, 1988), apply ACoP

Unpaid Taxes
Requisite — the tax must have accrued before the death of the decedent.
AMOUNT DEDUCTIBLE — unpaid taxes that accrued before the decedent's death but not including (Sec. 6.4.2 of RR 12-2018):
a. Any income tax upon income received after death;
b. Property taxes not accrued before death; and
c. Estate tax from the transmission of his estate.

Claims Against Insolvent Persons

® Requisites:
a. Value of the claims is included in the gross estate; and
b. The insolvency of the debtor must be established.
Amount deductible — the amount of claims/receivable that cannot be collected.

2. TRANSFER FOR PUBLIC USE (TFPU)

Requisites:
 Given to the Government of the Philippines (National or local);
 Must be testamentary in character; or
 By way of donation mortis causa executed by the decedent before his death;
 Exclusively for public purpose.
AMOUNT DEDUCTIBLE — amount of all bequests, legacies, devises, or transfers to or for the use of the Government of the Philippines, or any of its
political subdivisions.

3. VANISHING DEDUCTION (PROPERTY PREVIOUSLY TAXED)

Requisites:
 The decedent died within 5 years from receipt of the property from a prior decedent OR donor;
 The property is located in the Philippines
 The property must have formed part of the taxable estate of the prior decedent or the taxable gift of the donor and the transfer tax (estate
tax or donor's tax, as the case may be) relative thereto had been paid;
 The property on which vanishing deduction is being taken must be identified as the one received from the prior decedent, or from the donor,
or something acquired in exchange therefore;
 No vanishing deduction on the property was allowable to the estate of the prior decedent.
Discharge of Executor or Administrator from Personal Liability e. Any lawyer, notary public or any government officer who, by reason
(Section 92 of the Tax Code, as amended) of his official duties, intervenes in the preparation or acknowledgment
If the executor or administrator makes a written application to the of documents regarding partition or disposal of donations inter vivos
Commissioner for determination of the amount of the estate tax and or mortis causa, legacy or inheritance shall furnish the BIR with copies
discharge from personal liability therefore, the Commissioner (as soon of such documents and any information whatsoever which may
as possible, and in any event within one (1) year after the making of facilitate the collection of the estate tax.
such application, or if the application is made before the return is filed, f. A debtor shall not pay his debts to the heirs, legatees, executor or
then within one (1) year after the return is filed, but not after the administrator of his creditor-decedent without a certification from BIR
expiration of the period prescribed for the assessment of the tax in that the estate tax has been paid, but he may pay the executor or
Section 203 shall not notify the executor or administrator of the judicial administrator without such Certification if the credit is included
amount of the tax. The executor or administrator, upon payment of in the inventory of the estate of the decedent.
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.

Payment before Delivery by Executor or Administrator

(Section 94 of the Tax Code, as amended)
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.

Duties of Certain Officers and Persons

a. 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 (thru issuance of eCAR)
or his duly authorize representative that the taxes have been paid is
shown (Section 97 of the Tax Code, as amended).
b. 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 Bureau of Internal Revenue (BIR) that the
estate tax has been paid is shown (Section 94 of the Tax Code, as
amended).
c. Register of Deeds shall not register in the registry of property any
transfer of real property or real rights therein, or any mortgage, by way
of donation mortis causa of inheritance, without a certification from
the BIR of payment of estate tax, and they shall immediately notify the
BIR of non-payment of tax discovered by them (Section 95 of the Tax
Code, as amended).
d. IF BANK HAS KNOWLEDGE OF THE DEATH OF A PERSON WHO
MAINTAINED A JOINT ACCOUNT,
 UNDER THE TRAIN LAW:
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. In all cases, the final tax withheld shall not
be refunded, or credited on the tax due, on the net taxable
estate of the decedent (Section 97 of the Tax Code, as
amended).

In instances where the deposit accounts have been duly

included in the gross estate of the decedent and the estate
tax due thereon paid, the executor, administrator, or any of
the legal heirs shall present the eCAR issued for the
said estate prior to withdrawing from the bank deposit
account. Such withdrawal shall no longer be subject to the
6% withholding tax by the bank.