Index for Donor's Tax:

 Description
 Tax Form
 Documentary Requirements
 Tax Rates
 Procedures
 Related Revenue Issuances
 Codal Reference
 Frequently Asked Questions

Description

Donor’s Tax is a tax on a donation or gift, and is imposed on the

gratuitous transfer of property between two or more persons who are
living at the time of the transfer. It 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.

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Tax Form

BIR Form 1800 – Donor’s Tax Return

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Documentary Requirements

Mandatory Requirements [additional two (2) photocopies of each

document]:

1.    Duly Notarized Original Deed of Donation;

2.    Taxpayer Identification Number (TIN) of Donor and Donee/s;
3.    Proof of claimed tax credit, if applicable;
4.    Validated return and Original Official Receipt/Deposit Slip as
proof of payment; for no payment return, copy of Acknowledgment
Receipt of return filed thru eBlRForms;
5.    Duly Notarized Original Special Power of Attorney (SPA) for the
transacting party if the person signing is not one of the parties to the
Deed of Donation;

For Real Properties [additional two (2) photocopies of each

document]:

6.    Certified True Copy/ies of the Original/Transfer/Condominium

Certificate/s of Title (front and back pages) of the donated property, if
applicable;
7.    Certified True Copy/ies of the Tax Declaration at the time or
nearest to the date of the transaction issued by the Local Assessor’s
Office for land and improvement, if applicable;
8.    Certification of No Improvement issued by the Assessor’s
Office, if applicable;

For Personal Properties [additional two (2) photocopies of each

document]:

9.    Proof of valuation of shares of stock at the time of donation, if

applicable;

a.     For shares of stocks not listed/not traded - Latest Audited

Financial Statement of the issuing corporation with computation of the
book value per share
b.    For shares of stocks listed/traded - Price index from the
Philippine Stock Exchange (PSE)/latest Fair Market Value (FMV)
published in the newspaper at the time of transaction
c.     For club shares - Price published in newspapers on the
transaction date or nearest to the transaction date

10.     Stock certificate;
11.     Proof of valuation of other types of personal properties, if
applicable;
12.     Proof of claimed deductions, if applicable;
13.     Certificate of deposit/investment/indebtedness/stocks for
donated cash or securities;
14.     Certificate of registration of motor vehicle, if any;

Other Additional Requirements, if applicable [additional two (2)

photocopies of each document]:

·  Duly Notarized Original Special Power of Attorney (SPA), if the

person transacting/processing the transfer is not a party to the
transaction
·  Certification from the Philippine Consulate if document is executed
abroad
·  Location Plan/Vicinity map issued by the Local Assessor’s Office if
zonal value cannot be readily determined from the documents
submitted
·  Certificate of Exemption/BIR Ruling issued by the Commissioner of
Internal Revenue or his authorized representative, if tax exempt
·  Such other documents as may be required by
law/rulings/regulations/etc.

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Tax Rates

(The rate applicable shall be based on the law prevailing at the time of
donation)

·  Effective January 1, 2018 and onwards (Republic Act (RA) No.

10963/TRAIN)

Rate - The donor’s 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 (P250,000) exempt gift made during the calendar
year.

Notes:
1.  When the gifts are made during the same calendar year but on
different dates, the donor's tax shall be computed based on the total
net gifts during the year.

2.  The relationship between the donor and the donee(s) shall not be
considered. Republic Act No. 10963 (TRAIN Law) does not distinguish
donations made to relatives, or donations made to strangers.

·  Effective January 1, 1998 to December 31, 2017 (RA No. 8424)

Net Gift But not The Tax Shall Of the Excess

Plus
Over Over be Over

    
  exempt    
100,000.00

         
0 2%    100,000.00
100,000.00 200,000.00

         
P    2,000.00 4%     200,000.00
200,000.00 500,000.00

 
    
1,000,000.0      14,000.00 6%     500,000.00
500,000.00
0

   
1,000,000.0 3,000,000.0      44,000.00 8%  1,000,000.00
0 0

   
3,000,000.0 5,000,000.0    204,000.00 10%  3,000,000.00
0 0

 
10,000,000.
5,000,000.0    404,000.00 12%   5,000,000.00
00
0

10,000,000.
and over 1,004,000.00 15% 10,000,000.00
00

Notes:

1.    When the gifts are made during the same calendar year but on
different dates, the donor's tax shall be computed based on the total
net gifts during the year.
2.    Donation made to a stranger is subject to 30% of the net gift. A
stranger is a person who is not a:

·  brother, sister (whether by whole or half-blood), spouse, ancestor

and lineal descendants; or
·  relative by consanguinity in the collateral line within the fourth
degree of relationship.

·  Effective July 28, 1992 to December 31, 1997 (RA No. 7499)

Net Gift But not The Tax Shall Of the Excess

Plus
Over Over be Over

    
  exempt    
50,000.00

            
1.50%  
50,000.00 100,000.00 50,000.00

     
P     750.00 3%    100,000.00
100,000.00 200,000.00

     
    3,750.00 5%    200,000.00
200,000.00 500,000.00

   1,000,000.0
 18,750.00 8%    500,000.00
500,000.00 0

1,000,000.0 3,000,000.0
  58,750.00 10% 1,000,000.00
0 0

3,000,000.0 5,000,000.0
258,750.00 15% 3,000,000.00
0 0

5,000,000.0
and over 558,750.00 20% 5,000,000.00
0

Note:

1.    Donation made to a stranger is subject to 10% of the net gift. A

stranger is a person who is not a:

·  brother, sister (whether by whole or half-blood), spouse, ancestor

and lineal descendants; or
·  relative by consanguinity in the collateral line within the fourth
degree of relationship. 
·  Effective January 16, 1981 to July 27, 1992 (Presidential Decree No.
1773)

Net Gift But not The Tax Shall Of the Excess

Plus
Over Over be Over

     
  exempt    
1,000.00

         

                                

 
1,000.00 50,000.00 1.50% 1,000.00

          2.50

P    735.00      50,000.00
50,000.00 75,000.00 %

       
   1,360.00 3%      75,000.00
75,000.00 100,000.00

     
   2,110.00 6%    100,000.00
100,000.00 150,000.00

     
   5,110.00 9%    150,000.00
150,000.00 200,000.00

     
   9,610.00 12%    200,000.00
200,000.00 300,000.00

     
  21,610.00 15%    300,000.00
300,000.00 400,000.00

     
  36,610.00 18%    400,000.00
400,000.00 500,000.00

     
  54,610.00 21%    500,000.00
500,000.00 625,000.00

     
  80,860.00 24%    625,000.00
625,000.00 750,000.00

     
110,860.00 28%    750,000.00
750,000.00 875,000.00

   1,000,000.0
145,860.00 32%    875,000.00
875,000.00 0

1,000,000.0 2,000,000.0
185,860.00 36% 1,000,000.00
0 0

2,000,000.0 3,000,000.0
 545,860.00  38%   2,000,000.00
0 0 
3,000,000.0  
   925,860.00  40% 
0 3,000,000.00 

Note:    

1.    Donation made to a stranger shall be either the amount

computed in accordance with the preceding schedule or twenty
percent (20%) of the net gifts, whichever is higher. A stranger is a
person who is not a:

·  brother, sister (whether by whole or half-blood), spouse, ancestor

and lineal descendant; or
·  relative by consanguinity in the collateral line within the fourth
degree of relationship.

Pertinent laws:

·  Commonwealth Act. No. 466 – effective July 1, 1939 to September

14, 1950
·  Republic Act No. 579 – effective September 15, 1950 to August 3,
1969
·  Republic Act No. 6110 – effective August 4, 1969 to December 31,
1972
·  Presidential Decree No. 69 – effective January 1, 1973 to January
15, 1981
·  Presidential Decree No. 1773 – effective January 16, 1981 to July
27, 1992
·  Republic Act No. 7499 – effective July 28, 1992 to December 31,
1997
·  Republic Act No. 8424 – effective January 1, 1998 to December 31,
2017
·  Republic Act No. 10963 (TRAIN Law)– effective January 1, 2018 to
present

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Procedures
·  Who Shall File

The Donor’s Tax Return (BIR Form No. 1800) shall be filed in triplicate
by any person, natural or juridical, resident or non-resident, who
transfers or causes to transfer property by gift, whether in trust or
otherwise, whether the gift is direct or indirect and whether the
property is real or personal, tangible or intangible.

Taxpayers who are filing BIR Form no. 1800 are excluded in the
mandatory coverage from using the eBlRForms (Section 2 of RR No. 9-
2016).

·  When and Where to File and Pay

The Donor’s Tax Return (BIR Form No. 1800) shall be filed within thirty
(30) days after the date the gift (donation) is made.

The return shall be filed with any Authorized Agent Bank (AAB) of the
Revenue District Office having jurisdiction over the place of domicile
of the donor at the time of the donation, or if there is no legal
residence in the Philippines, with the Office of the Commissioner of
Internal Revenue, (Revenue District Office No. 39, South Quezon City).
In case of gifts made by a non-resident alien, the return may be filed
with RDO No. 39, or with the Philippine Embassy or Consulate in the
country where he is domiciled at the time of donation.

A separate return shall be filed by each donor for each gift (donation)
made on different dates during the year reflecting therein any previous
net gifts made in the same calendar year. Only one return shall be filed
for several gifts (donations) by a donor to the different donees on the
same date.

If the gift (donation) involves conjugal/community property, each

spouse shall file separate return corresponding to his/her respective
share in the conjugal/community property donated.  This rule shall
likewise apply in the case of co-ownership over the property being
donated.   

When the return is filed with an AAB, taxpayer must accomplish and
submit BIR-prescribed deposit slip, which the bank teller shall
machine validate as evidence that payment was received by the AAB.
The AAB receiving the tax return shall stamp mark the word
“Received” on the return and also machine validate the return as proof
of filing the return and payment of the tax by the taxpayer,
respectively. The machine validation shall reflect the date of payment,
amount paid and transactions code, the name of the bank, branch
code, teller’s code and teller’s initial. Bank debit memo number and
date should be indicated in the return for taxpayers paying under the
bank debit system.

Payments may also be made thru the epayment channels of AABs thru
either their online facility, credit/debit/prepaid cards, and mobile
payments.

For transactions covered by one (1) Deed of Sale/Exchange/Donation

involving one (1) to three (3) properties, the taxpayer can avail of the
fast lane pursuant to Revenue Memorandum Circular (RMC) No. 43-
2018, as amended by RMC No. 107-2018. Payments amounting to
twenty thousand pesos (P 20,000.00) and below shall be paid in cash
while payments above twenty thousand pesos (P 20,000.00) shall be
made through Manager’s Check or Cashier’s Check to the Revenue
Collection Officer of the RDO concerned.

The time of filing and payment vary depending on the law applicable at
the time of donation. 

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Related Revenue Issuances

Revenue Regulations (RR) Nos. 2-2003, 6-2013, 6-2014

Revenue Memorandum Circular (RMC) Nos. 63-2009, 53-2013, 43-
2018, 107-2018
Revenue Memorandum Order (RMO) No. 35-2018
OPM-AS-APMD 2017-06-06
OPM-AS-APMD 2017-06-01
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Codal Reference

·  Sections 28, 29 and 30 of the Tax Reform Acceleration and Inclusion

(TRAIN) Law), amending Sections 99, 100 and 101 of National Internal
Revenue Code (NIRC) of 1997, respectively
·  Sections 98 to 104 of the NIRC of 1997

Related Laws

·  Republic Act Nos. 579, 3062, 3676, 3850, 6110, 7499, 8424, 9159,
9275, 9500, 9647, 10066, 10072, 10073, 10083, 10174, 10390, 10618,
10963 (TRAIN Law)
·  Presidential Decree Nos. 69, 181, 205, 292, 294, 1773
·  Executive Order No. 419
·  Commonwealth Act No. 466

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Frequently Asked Questions

1. What donations are tax exempt?

A.  “In the Case of Gifts made by a Resident

·  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

·  Gifts in favor of an educational and/or charitable, religious, cultural

or social welfare corporation, institution, accredited non-government
organization, trust or philanthropic organization or research institution
or organization: Provided, however, not more than 30% of said gifts
will 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.” (Sec. 17 of RR No. 12-
2018)

B.  In the Case of Gifts Made by a Nonresident not a Citizen of the

Philippines

·  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.

·  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.   (Sec.
101 (B) of NIRC, as amended)

2. What are the bases in the valuation of property?  

The properties comprising the gift/donation shall be valued based on

their fair market value as of the time of donation.

If the property is a real property, the fair market value thereof as of the
time of donation shall be, whichever is the 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.

In the case of shares of stocks, the fair market value shall depend on
whether the shares are listed or unlisted in the stock exchanges.
Unlisted common shares are valued based on their book value while
unlisted preferred shares are valued at par value. In determining the
book value of common shares, appraisal surplus shall not be
considered as well as the value assigned to preferred shares, if there
are any. On this note, the valuation of unlisted shares shall be exempt
from the provisions of RR No. 6-2013, as amended.

For shares which are listed in the stock exchanges, the fair market
value shall be the arithmetic mean between the highest and lowest
quotation at a date nearest the date of donation, if none is available on
the date of donation.

The fair market value of units of participation in any association,

recreation or amusement club (such as golf, polo, or similar clubs),
shall be the bid price nearest the date of donation published in any
newspaper or publication of general circulation.

To determine the value of the right to 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. (Sec. 2, RR No. 17-
2018 and Sec. 5 of RR No. 12-2018) 

3. For purposes of Donor’s Tax, what does the term “Net Gift” mean?

For purposes of the donor’s tax, “net gift” shall mean the net economic
benefit from the transfer that accrues to the donee. Accordingly, if a
mortgaged property is transferred as a gift, but imposing upon the
donee the obligation to pay the mortgage liability, then the net gift is
measured by deducting from the fair market value of the property the
amount of mortgage assumed. (Sec. 12 of RR No. 12-2018)

4. Under R.A. No.10963 (TRAIN Law), is any contribution in cash or in

kind to any candidate or political party or coalition of parties for
campaign purposes subject to the payment of donor’s tax?

Sec. 28 (B) of RA No. 10963 (TRAIN Law) states that 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.”
5. For purposes of Donor’s Tax, is a legally adopted child considered
stranger?

A legally adopted child is entitled to all the rights and obligations

provided by law to legitimate children, and therefore, donation to him
shall not be considered as donation made to stranger. (Sec. 10, RR No.
2-2003). However, with the passage of RA No. 10963 (TRAIN Law),
effective on January 1, 2018, the relationship between the donor and
donee(s) is no longer considered in the computation of donor’s tax.

6. For purposes of Donor’s Tax, are donations between businesses

considered donations made between strangers?

Donation made between business organizations and those made

between an individual and a business organization shall be considered
as donation made to a stranger.  (sec. 10, RR No. 2-2003). However,
with the passage of RA No. 10963 (TRAIN Law), effective on January
1, 2018, the relationship between the donor and donee(s) is no longer
considered in in the computation of donor’s tax.

7. Are gratuitous donations to Homeowners’ Associations subject to

Donor’s Tax?

Gifts, donations, and other contributions received by the Homeowners’

Associations (Associations) are subject to the payment of donor’s tax
pursuant to Section 98, and 99 of the NIRC, as amended by Sec. 28 of
RA 10963 (TRAIN Law). Endowment or gifts received by such
associations are not exempt from donor’s tax considering that gifts to
Associations are not qualified for exemption under Section 101(A)(2) of
the TRAIN Law. (Section II, RMC No. 53-2013)

8. Is an onerous donation or donation in exchange for goods, services

or use or lease of properties to Homeowners’ Association subject to
Donor’s Tax?

Pursuant to RMC No. 9-2013, associations are subject to the

corresponding internal revenue taxes imposed under the Tax Code of
1997 on their income of whatever kind and character. In this regard,
contributions to associations in exchange for goods, services and use
of properties constitute as other assessments/charges from activity in
exchange for the performance of a service, use of properties or
delivery of an object. As such, these fees are income on the part of the
associations that are subject to income tax under Section 27 of the
Tax Code, as amended. (Section III, RMC No. 53-2013)

9. What is the proper treatment for transactions involving transfer of

property other than real property referred to in Section 24 (D) for less
than adequate and full consideration?

Where property, other than real property referred to in Section 24(D) of

the NIRC, as amended, 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
(Donor’s Tax), 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. (Sec. 16,
RR No. 12-2018)

10. What entities are considered exempted from Donor’s Tax under
special laws?

The list below consists of entities considered Donor’s Tax exempt

under special laws including, but not limited to the following:

·  Rural Farm School (Sec. 14, R.A. No. 10618)

·  People’s Television Network, Incorporated (Sec. 15, R.A. No. 10390)
·  People’s Survival Fund (Sec. 13, R.A. No. 10174)
·  Aurora Pacific Economic Zone and Freeport Authority (Sec. 7, R.A.
No. 10083)
·  Girl Scouts of the Philippines (Sec. 11, R.A. No. 10073)
·  Philippine Red Cross (Sec. 5, R.A. No. 10072)
·  Tubbataha Reefs Natural Park (Sec. 17, R.A. No. 10067)
·  National Commission for Culture and the Arts (Sec. 35, R.A. No.
10066)
·  Philippine Normal University (Sec. 7, R.A. No. 9647)
·  University of the Philippines (Sec. 25, R.A. No. 9500)
·  National Water Quality Management Fund (Sec. 9, R.A. No. 9275)
·  Philippine Investors Commission (Sec. 9, R.A. No. 3850)
·  Ramon Magsaysay Award Foundation (Sec. 2, R.A. 3676)
·  Philippine-American Cultural Foundation (Sec. 4, P.D. 3062)
·  International Rice Research Institute (Art. 5(2), PD 1620)
·  Task Force on Human Settlements (Sec. 3(b)(8), E.O. 419)
·  National Social Action Council (Sec. 4, P.D. 294)
·  Aquaculture Department of the Southeast Asian Fisheries
Development Center (Sec. 2, P.D. 292)
·  Development Academy of the Philippines (Sec. 12, PD 205)
·  Integrated Bar of the Philippines (Sec. 3, PD 181)