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.

TAX FORM
BIR FORM 1800 – Donor’s Tax Return

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.

TAX RATES ON A DIFFERENT FILE

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. 

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

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)