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DONOR’S TAXATION said gifts shall be used for

administration purposes;
Definition–DONATION is an act of liberality 2. The non-profit institutions must be
whereby a person disposes gratuitously of a accredited by the Philippine Council for
thing or a right in favor of another who NGO Certification (PCNC).
accepts it.
A non-profit institution is one which is:
Donor’s tax is a tax on the privilege to a. organized as a non-stock entity;
transmit property between two or more b. paying no dividends;
persons who are living at the time of the c. governed by trustees who receive no
donation; tax shall apply whether the compensation; and
transfer is in trust or otherwise, whether the d. devoting all income whether students’
gift is direct or indirect. fees or gifts, donation subsidies or
Formula in computing Donor’s Tax: other forms of philanthropy, to the
accomplishment of the purposes
First donation during the year: enumerated in its Articles of
Incorporation.
Gross Gift Pxx
Less: Deduction xx 3. P250,000 per year
Net gift xx
Less: Exemption 250,000 Exempt under special law – Donation to
1. Rural Farm School
Taxable xx
2. People’s Television Network, Inc.
x Tax rate 6%
3. People’s Survival Fund
Donor’s tax due xx
4. Aurora Pacific Economic Zone and Freeport
Succeeding donations during same year: Authority
5. Girl Scouts of the Philippines
Gross Gift Pxx
6. Philippine Red Cross
Less: Deduction xx
7. Tubbataha Reefs Natural Park
Present net gift xx
8. National Commission for Culture and the
Add: Prior net gifts during the xx
Arts
year
9. Philippine Normal University
Total net gifts xx
10. University of the Philippines
Less: Exemption 250,000
11. National Water Quality Management Fund
Taxable amount xx
12. Philippine Investors Commission
x Tax rate 6%
13. Ramon Magsaysay Award Foundation
Donor’s tax due xx
14. Philippine-American Cultural Foundation
Less: Tax/es paid during the xx
15. International Rice Research Institute
year
16. Task Force on Human Settlements
Donor’s tax payable xx
17. National Social Action Council
Composition of gross gifts (same with 18. Aquaculture Department of the Southeast
estate taxation) Asian Fisheries Development Center
19. Development Academy of the Philippines
Properties classified as intangibles 20. Integrated Bar of the Philippines
within (same with estate taxation)
RATE OF TAX: 6% computed on the basis
Deductions from gross gifts of total gifts in excess of P250,000 exempt
1. Mortgage on the property donated gift made during the calendar year.
assumed by the donee.
2. Amount specifically provided by the donor Donations made by spouses
as diminution on the property donated. In case of donation made by husband and
wife out of conjugal or community funds:
Exemptions from gross gifts
1. Gifts made to the national government or 1. Each is donor to the extent of 1/2 of the
any entity created by any of its agencies value of the donation.
which is not conducted for profit, or any 2. If only one spouse signed the deed of
political subdivision. donation, there is only one donor for
donor’s tax purposes, without prejudice to
2. Gifts in favor of the following non-profit the right of the other spouse to question
institutions: the validity of the donation.
a. Educational
b. Charitable Donation to several donees
c. Religious If the donor had made several donations to
d. Cultural different persons on the same date, the total
e. Social welfare net gift shall be computed together and
f. Accredited NGO contained in one donor’s tax return only.
g. Trust or philanthropic organization
Transfer for less than adequate
h. Research institution
consideration
Requisites:
Where property, other than real property
1. Provided, that not more than 30% of
(capital asset) is transferred for less than

adequate consideration in money or money’s
worth, the amount by which the fair market
value exceeded the value of consideration
shall be deemed a gift subject to donor’s tax.
A sale, exchange, or other transfer of
property made in the ordinary course of
business (a transaction which is 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).
Valuation of property – at fair market
value at the time of gift (see estate tax).
OTHER MATTERS:
1. Renunciation of inheritance - A
renunciation of inheritance by surviving
spouse or an heir in favor of:
a. Co-heir - not a donation
b. Not a co-heir – there is donation
subject to donor’s tax
c. Renunciation by surviving spouse of
his/her share in the conjugal
partnership or absolute community
after the dissolution of the marriage in
favor of the heirs of the deceased
spouse or any other person/s – subject
to donor’s tax
2. Donations between spouses - Every
donation or grant of gratuitous
advantage, direct or indirect, between the
spouses during the marriage shall be
void, except moderate gifts which the
spouses may give each other on the
occasion of any family rejoicing.
The prohibition shall also apply to
persons living together as husband and
wife without a valid marriage.
3. Other persons who cannot donate
property to each other (Void
donations)
a. Those made between persons who
were guilty of adultery or concubinage
at the time of donation.
b. Those made between persons found
guilty of the same criminal offense in
consideration thereof; and
c. Those made to a public officer or his
wife, descendants and ascendants, by
reason of his office.
Tax credit for donor’s tax paid to a
foreign country.
1. Who can claim? Only citizen or resident
alien donor.
2. Limitations on tax credit:
1st limitation
Net gift per foreign country x Phil tax
Total net gift
2nd limitation
Net gift all foreign countries x Phil tax
Total net gift
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Filing and payment
1. Filing and payment – within 30 days from
date of gift, either manually or
electronically.
Except in cases where the Commissioner
otherwise permits, the return shall be filed
and the tax paid, either electronically or
manually, with any authorized agent bank,
Revenue District Office through Revenue
Collection Officer or authorized tax
software provider.
Surcharges (ad valorem penalty)
50% False or fraudulent return is willfully
filed.
Willful neglect to file the return on
time.
25% Failure to file any return and pay the
tax due thereon.
If the return is not filed with the
proper internal revenue officer.
Failure to pay on time the deficiency
tax shown in the notice of
assessment.
Interest for failure to pay tax per return
on time
RATE – 12% per annum, or such higher rate
as may be prescribed by rules and
regulations, computed from the date
prescribed for payment until the amount is
fully paid.
Attachments
1. Proof of claimed tax credit, if applicable
2. Certified true copies of OCT/TCT/CCT
(front and back pages) of the donated
property, if applicable.
3. Certified true copies of the latest tax
declaration of lot and/or improvement, if
applicable.
4. “Certificate of No Improvement” issued by
the Assessor’s Office where the donated
real property/ies have no declared
improvements, if applicable.
5. Proof of valuation of shares of stocks at
the time of donation, if applicable.
6. Proof of valuation of other types of
personal properties, if applicable.
7. Proof of claimed deductions, if applicable.
8. Copy of tax debit memo used as payment,
if applicable.