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BA 128 2 Donor's Tax
BA 128 2 Donor's Tax
2. Kinds of donation
1. Donation inter-vivos: one made by a living donor (donor’s tax)
2. Donation mortis-causa: one made by a deceased donor (estate tax)
b. Donative intent
Donation must be intentional or voluntary.
c. Delivery
Donation is a real contract, completed by delivery.
4. Formal requirements
a. Personal property – Art. 748, NCC
The donation of a movable may be made orally or in writing.
An oral donation requires the simultaneous delivery of the thing or of the document representing the right
donated.
If the value of the personal property donated exceeds five thousand pesos, the donation and the acceptance
shall be made in writing. Otherwise, the donation shall be void.
The acceptance may be made in the same deed of donation or in a separate public document, but it shall not
take effect unless it is done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and
this step shall be noted in both instruments.
b. Condonation/remission of debt
1. Classification of donor
a. Citizen and resident – RC, NRC and RA: taxable on world donations
b. NRA: taxable on Philippine donations with intangible personal property subject to the rule of reciprocity
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.
a) Condition: Not more than 30% of the gift will be used by donee for administration purposes
4. Valuation of gifts made in property – Sec. 102, NIRC; Sec. 13, RR 12-18, as amended by RR 17-18
RR 08-09
e. Tax credit for donor’s taxes paid to a foreign country – Sec. 101(C), NIRC
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.
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.
7. Returns/payment
Sec. 103, NIRC
Sec. 15, RR 12-18
a. Requirements
Any person making a donation (whether direct or indirect), unless the donation is specifically exempt under the
NIRC or other special laws, is required, for every donation, to accomplish under oath a donor's tax return in
duplicate. The return shall set forth:
1. Each gift made during the calendar year which is to be included in 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 the Commissioner may require.