Computation of net estate of non-resident alien decedent

The value of the net estate of a decedent who is a non-resident alien in the Philippines shall be determined by deducting from the value of that part of his gross estate which at the time of his death is situated in the Philippines the following items of deductions:

[1] Standard deduction. – A deduction in the amount of Five Hundred Thousand Pesos (P500,000) shall be allowed without need of substantiation. The full amount of P500,000 shall be allowed as deduction for the benefit of the decedent.

(This is different from the rule on citizens and resident aliens which prescribes a deduction of five million pesos [5,000,000].)

[2] The proportion of the total losses and indebtedness which the value of such part bears to the value of his entire gross estate wherever situated. Losses and indebtedness shall include the following:

[a] Claims against the estate.
[b] Claims of the deceased against insolvent persons where the value of the interest therein is included in the value of the gross estate.
[c] Unpaid mortgages, taxes and casualty losses.

The allowable deduction under this subsection shall be computed using the following formula:

[Philippine Gross Estate ÷ World Gross Estate] x [Item No. 2] = Allowable Deduction  

[3] Property previously taxed.

[4] Transfers for public use.

[5] Net share of the surviving spouse in the conjugal property or community property.

Unless otherwise provided in this section, the rules for the availment of deductions in the preceding section shall apply. (Computation of the net estate of a decedent who is a non-resident alien of the Philippines. Section 7, Revenue Regulation No. 12-2018. January 25, 2018)

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