DONOR’S TAX Exemptions

Donation - act of liberality whereby a person disposes a) Gifts made to national government or any entity
gratuitously of a thing or a right in favor of another who created by any of its
accepts it b) agencies which is not conducted for profit or any
political subdivision
Donor’s Tax - tax on the privilege to transmit property
c) Gifts in favor of the following:
between two or more person who are living (Donation Inter
 Educational
vivos) at the time of donation. Tax shall apply whether the
 Charitable
transfer is in trust or otherwise, whether the gift is direct or
 Religious
indirect. Tax is at 6% in excess of Php 250,000.
 Cultural
Valuation  Social Welfare
The property given/donated as gross gift shall be valued at  Accredited NGO
Fair Market Value at the time of Donation.  Trust or philanthropic organization
 Research institutions
Deductions This is provided that their admin expenses do not
 Encumbrances (mortgage) of the property donated exceed 30% of their total expenses.
(if assumed by the donee) How to Compute for Donor’s Tax
 Those specified by the Donor as a diminution of the
property donated. Diminution is a reduction in the Gross Gift xxx
size and extent of something. Less: Deductions (xxx)
Net Gift xxx
Other Types of Donations Less: Exemption (250K)
Insufficient Consideration Taxable xxx
Tax Rate 6%
If a person transferred property for less than adequate and Donor’s Tax Due xxx
full consideration in money's worth, and the transfer was
effective during his life time, the amount or value that Joint Donation made by Spouses
exceeded the consideration is considered Donations. A joint donation by husband and wife shall be considered a
Example: If I have a property that is currently selling at donation by each, of one half of the donation. There shall be
P1,000,000 but I sold it to a friend for P300,000, the separate donor’s tax return.
P700,000 is considered as a donation. Example: A donation of P600,000 was made by husband
Cancellation of Debt and wife to a legitimate child. The donor’s tax was
computed, as follows:
If a creditor desires to benefit a debtor, and without any
consideration in money or its equivalent, cancels the debt, Husband Wife
(accepted by debtor) the debt is considered as Donations Gift made (600,000 x ½) 300,000 300,000
Less: Exemption (250,000) (250,000)
Two Kinds of Donors Gift subject to tax 50,000 50,000
 Residents or Citizens of the PH – taxable in their Donor’s tax P3,000 P3,000
real, tangible, and intangible properties in and out Multiple Donations in a Year
the Philippines.
 Non-resident aliens – taxable in their real and Gross Gift xxx
tangible properties in the Philippines. Those Less: Deductions (xxx)
intangible personal property is under the reciprocity Present Net Gift xxx
clause. Add: Prior Net Gifts xxx
Total Net Gifts xxx
Intangible Properties Less: Exemption (250K)
a) Franchise Taxable xxx
b) Shares, obligations or bonds issued by a Tax Rate 6%
corporation organized and constituted in the PH Donor’s Tax Due xxx
c) Shares, obligations or bonds issued by a foreign Less: Taxes Paid (xxx)
corporation where 85% of business is in PH Donor’s Tax Payable xxx
d) Shares, obligations or bonds issued by a foreign Exempted Under Special Law
corporation if such have acquired situs in PH
e) Shares, or rights in any partnership, business or  Rural farm Schools
industry established in the PH  People's Television Network, Inc.
f) Receivable and the likes  People's Survival Fund
g) Others  Aurora Pacific Economic Zone and Free port
authority
 Girl scouts of the PH
  Philippine Red Cross
 Tubbataha Reefs Natural Park
 National Commission for Culture and Arts
 Philippine Normal University
 University of the PH
 National Water Quality Management Fund
 Philippine Investors Commission
 International Rice Research Institute
 Task Force on Human Settlements
 National Social Action Council
 Aquaculture Department of the Southeast Asian
 Fisheries Development Center
 Development Academy of the PH
 Integrated Bar of the PH
Foreign Tax Credits
- These can be claimed by Donor who is a resident
or Citizen of the Philippines
- Donor pays both foreign Donor’s Taxes and
Philippine Donor’s Taxes.
- This is subject to limitation
Limitation

Filing and Payment

This is filed and paid within 30 days after the date of
donation through BIR form 1800.
Attachments
 Notarized Deed of Donation;
 TIN of Donor and Donee/s;
 Proof of claimed tax credit, if applicable;
 Duly Notarized Special Power of Attorney (SPA) for
the transacting party if the latter is not one of the
parties to the Deed of Donation;
 Official Receipt/Deposit Slip and duly validated
return as proof of payment;
 Copy of Tax Debit Memo used as payment, if
applicable