DISTINGUISHED OF ESTATE TAX

AND DONOR’S TAX

COMPARISONS BETWEEN ESTATE TAX AND DONORS TAX
(NRC AS AMENDED BY REPUBLIC ACT 10963 OTHERWISE
KNOWN AS TRAIN LAW)
 TAX RATE 6% NET ESTATE 6% NET GIFTS IN EXCESS OF
P250,000

FILING AND PAYMENTS - WITHIN ONE (1) YEAR FROM

DEATH
- WITHIN 30 DAYS FROM DONATION

- NO EXTENSION TO FILE
- EXTENSION TO FILE; NOT MORE
THAN 30 DAYS - PAY AS YOU FILE

- NO EXTENSION FOR PAYMENT

- PAY AS YOU FILE

- WITH EXTENSION TO PAY; 2

YEARS (EXTRAJUDICIAL) 5 YEARS
(IF JUDICIAL)

SCOPE RC, NRC, RA-ON THE ESTATE

WITHIN AND WITHOUT NRA- ON
RC, NRC, RA-ON THE ESTATE
WITHIN AND WITHOUT NRA- ON
ESTATE WITHIN ESTATE WITHIN
 PERSONAL PROPERTY REAL PROPERTY
 

AMOUNT OF P5,000 OR LESS MORE THAN REGARDLESS OF

DONATION P5,000 THE AMOUNT

FORM OF ORAL OR IN IN WRITING IN PUBLIC

DONATION WRITING DOCUMENT
*NOTARIZED*
CLASSIFICATION OF RESIDENT OR NON-RESIDENT ALIEN NON- RESIDENT ALIEN
PROPERTY CITIZEN (NO RECIPROCACY) (WITH RECIPROCACY)
REAL PROPERTY

WITHIN YES YES YES

WITHOUT YES NO NO

PERSONAL PROPERTY

TANGIBLE WITHIN YES YES YES

TANGIBLE WITHOUT YES NO NO

INTANGIBLE WITHIN YES YES NO

INTANGIBLE WITHOUT YES NO NO

 SAM GAVE THE FOLLOWING
PROPERTIES TO VARIOUS
DONEES ON DECEMBER 25, 2018
REQUIREMENT: COMPUTE THE GROSS GIFT IF
ARA IS:

A. RESIDENT CITIZEN/RESIDENT ALIEN/ NON-

RESIDENT CITIZEN

B. NON RESIDENT ALIEN (W/O RECIPROCITY)

C. NON-RESIDENT ALIEN (W/ RECIPROCITY)

A.

GROSS GIFT P 13,895,000

B. NON RESIDENT ALIEN (W/O RECIPROCITY)
APARTMENT HOUSE IN NAGA CITY 8,000,000
CAR IN IRIGA CITY P 520,000
SAVINGS DEPOSIT WITH BPI P 50,000
ACCOUNTS RECEIVABLE, DEBTOR P 140,000
RESIDING IN THE PHILIPPINES

FRANCHISE EXERCISED IN THE P 120,000

PHILIPPINES

INVESTMENT IN LOVERS COMPANY, P 125,000

PARTNERSHIP IN PHILIPPINES

GROSS GIFT P 8,955,000

C. NON-RESIDENT ALIEN (W/RECIPROCITY)

APARTMENT HOUSE IN NAGA P 8,000,000

CAR IN IRIGA CITY P 520,000

GROSS GIFT P 8,520,000

NOTE!
EXEMPT DONATIONS UNDER
SPECIAL LAWS
 INTERNATIONAL RICE RESEARCH INSTITUTE
PHILIPPINE-AMERICAN CULTURAL FOUNDATION
RAMON-MAGSAYSAY AWARD FOUNDATION
PHILIPPINE INVESTOR’S COMMISION
INTEGRATED BAR OF THE PHILIPPINES
DEVELOPMENT ACADEMY OF THE PHILIPPINES
AQUACULTURE DEPARTMENT OF THE SOUTHEAST ASIA FISHERIES DEVELOPMENT CENTER OF THE
PHILIPPINES
NATIONAL SOCIAL ACTION COUNCIL
INTRAMUROS ADMINISTRATION
SOUTHERN PHILIPPINES DEVELOPMENT FOUNDATION
NATIONAL MUSEUM
NATIONAL LIBRARY
NATIONAL HISTORICAL INSTITUTE
TASK FORCE ON HUMAN SETTLEMENT CONCSISTING OF EQUIPMENT, MATERIALS AND SERVICES
PUBLIC SCHOOLS IN ACCORDANCE WITH THE ADOPT-A-SCHOOL ACT OF 1998
 ON FIRST DONATION IN THE CALENDAR YEAR:

GROSS GIFT XX

LESS: DEDUCTION FROM GROSS GIFT (XX)

NET GIFT = XX

LESS: EXEMPT GIFT (250,000)

TAXABLE NET GIFTS XX

TIMES THE APPLICABLE RATE %

DONOR’S TAX DUE AND PAYABLE = XX

LESS: TAX CREDIT (XX)

DONOR’S TAX PAYABLE =XX

 ON SUBSEQUENT DONATIONS:
GROSS GIFT MADE IN THIS MONTH XX
LESS: DEDUCTIONS FROM GROSS GIFT (XX)
NET GIFTS, CURRENT = XX
ADD; ALL PRIOR NET GIFT W/IN THE YEAR XX

AGGREGIATE NET GIFTS = XX

LESS: EXEMPT GIFTS (250,000)
TAXABLE NET GIFTS XX
TIMES APPLICABLE TAX RATE %
DONOR’S TAX DUE = XX
LESS: DONOR’S TAX PAID ON PRIOR GIFTS (XX)

LESS: TAX CREDITS (XX)

DONOR’S TAX DUE AND PAYABLE = XX
 A. ONLY ONE COUNTRY IS INVOLVED

NET GIFT (PER FOREIGN COUNTRY) X PHILIPPINE DONOR’S TAX

TOTAL NET GIFT

 B. TWO OR MORE FOREIGN COUNTRY ARE
INVOLVED:

NET GIFT (PER FOREIGN COUNTRY) X PHILIPPINE DONOR’S TAX

TOTAL NET GIFT

LIMIT 2:

NET GIFT (ALL FOREIGN COUNTRIES) X PHILIPPINE DONOR’S TAX

TOTAL NET GIFT
SAMPLE PROBLEM
 ANACLETO GAVE THE FOLLOWING DONATIONS TO:

02-14-18 – AZUCENA AMOUNTING TO P 190,000

06-01-18 – BRUSCO AMOUNTING TO P 160,000

10-13-18 – CARIZOSA AMOUNTING TO P 180,000

01-15-19 NATIONAL GOVERNMENT LAND DONATED FOR PUBLIC USE

WITH FV OF
P 700,000

05-15-19 – DALMACIO, LAND WITH FMV OF P 1,000,000 BUT MORTGAGE

FOR P 100,000 WHICH WAS ASSUMED BY THE DONEE
REQUIREMENT: COMPUTE FOR THE
TAX DUE ON EACH DONATION
 02-14-18

GROSS GIFT P 190,000

LESS: EXEMPT GIFT (250,000)
TAXABLE NET GIFT (60,000)
DONOR’S TAX DUE EXEMPT
 06-01-18

GROSS GIFT P 160,000

ADD: PRIOR NET GIFT 190,000
AGGREGATE NET GIFT 350,000
LESS: EXEMPT TAX GIFTS (250,000)
TAXABLE NET GIFTS 100,000
X DONOR’S TAX RATES * 6%
DONOR’S TAX DUE 6,000
 10-13-18
GROSS GIFT P 180,000
ADD: PRIOR NET GIFT 350,000
AGGREGATE NET GIFT 530,000
LESS: EXEMPT TAX GIFTS (250,000)
TAXABLE NET GIFTS 280,000
X DONOR’S TAX RATES * 6%
DONOR’S TAX DUE 16,800
TAX DUE THEREON 16,800
LESS: TAX DUE ON 06-01-18 6,000
TAX DUE ON 10-13-18 P 10,800

*or simply, 180,000*6%= 10,800

 01-05-19

GROSS GIFT 700,000

DEDUCT: GOVT (700,000)
NET GIFT
 05-15-19
GROSS GIFT 1,000,000
LESS: DDT FROM GROSS PROFIT 100,000
NET GIFTS, CURRENT 900,000
ADD: PRIOR NET GIFT W/IN THE YEAR -
AGGREGATE NET GIFTS 900,000
LESS: EXEMPT GIFTS (250,000)
TAXABLE NET GIFTS 650,000
TIMES APPLIXATION TAX RATE 6%
DONOR’S TAX DUE 39,000
LESS: DONOR’S TAX PAID ON PRIOR -
GIFTS
LESS: TAX CREDITS -
DONOR’S TAX DUE AND PAYABLE 05-
15-19
P 39,000
MR. & MRS. K MADE THE FOLLOWING DONATIONS

1-25-19 – TO L, THEIR LEGITIMATE SON, A CAR WORTH P 800,000 WITH P200, 000 MORTGAGE,
½ WAS ASSUMED BY THE DONEE. (SILENT AS TO WHO OWNS THE CAR, CONSIDERED AS
CONJUGAL PROPERTY)

5-31-19- TO M, BROTHER OF MR.K, HIS CAPITAL PROPERTY WORTH P 500,000 ON ACCOUNT

OF MARRIAGE 6 MOS. AGO

7-15-19- TO N, DAUGHTER OF MRS. K FROM A FORMER MARRIAGE ON ACCOUNT OF HER

MARRIAGE 18 MONTHS AGO, MRS. K’S PARAPHERNAL (EXCLUSIVE PROPERTY) WORTH
P 100,000

8-20-19- TO N, ON ACCOUNT OF THE SAME MARRIAGE, CONJUGAL CAR OF THE COUPLE

WORTH P 400,000, WITH P 200,000 UNPAID MORTGAGE, ½ WAS ASSUMED BY N. AND
P 500,000 WORTH OF LAND TO THEIR FOUR SONS ON ACCOUNT OF THEIR GRADUATION, 20%
OF WHICH WAS OWNED BY THEIR KUMPADRE WHO AGREED TO DONATE HIS SHARE THRU A
PUBLIC DOCUMENT.
 1/25/2019 MR. K MRS. K

GROSS GIFT 800,000/2 400,000.00 400,000.00

LESS: DEDUCTIONS 200,000*50%/2 (50,000.00) (50,000.00)

NET GIFT 350,000.00 350,000.00

LESS: EXEMPT GIFT (250,000.00) (250,000.00)

TAXABLE NET 100,000.00 100,000.00

GIFTS
APPLICABLE RATE 6% 6%

DONOR’S TAX 1/25/2019 6,000.00 6,000.00

DUE AND
PAYABLE
 5/31/2019 MR. K
GROSS GIFT 500,000.00
ADD: PRIOR NET 350,000.00
GIFT
AGGREGATE NET 850,000.00
GIFT
LESS TAX EXEMPT (250,000.00)
TAXABLE NET GIFT 600,000.00
DONOR’S RATE 6%
DONOR’S TAX DUE 36,000.00
AND PAYABLE
TAX DUE THEREON 36,000.00
LESS: TAX DUE ON 1- (6,000.00)
25-19
TAX DUE ON 5-31- 30,000.00
19
 8-20-2019 MR.K MRS.K
GROSS GIFT
CAR 400,000/2 200,000.00 200,000.00
LAND 500,000*80%/2 200,000.00 200,000.00
TOTAL 400,000.00 400,000.00
LESS: MORTAGAGE 200,000*.5/2 (50,000.00) (50,000.00)
NET GIFT 350,000.00 350,000.00
ADD: PRIOR NET GIFT 850,000.00 450,000.00
AGGREGATE NET GIFT 1,200,000.00 800,000.00
LESS TAX EXEMPT (250,000.00) (250,000.00)
TAXABLE NET GIFT 950,000.00 550,000.00
DONOR’S RATE 6% 6%
DONOR’S TAX DUE AND 57,000.00 33,000.00
PAYABLE
LESS PRIOR TAX (36,000.00) (12,000.00)
PAYMENTS
DONOR’S TAX
PAYABLE 8-20-19
21,000.00 21,000.00
 8-20-2019 KUMPADRE
GROSS GIFT 500,000*2 100,000.00
LESS: DEDUCTIONS -
NET GIFT 100,000.00
LESS: EXEMPT GIFT (250,000.00)
TAXABLE NET GIFTS (150,000.00)
DONOR’S TAX EXEMPT
DUE AND PAYABLE