Donor’s Tax

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 Donor’s Tax : Nature and Concept

 Donation is an act of liberality whereby a person (donor) disposes of,

gratuitously, a thing or right in favor of another (donee) who accepts it. It
is a voluntary transfer of property from one person to another without
any compensation or consideration thereof.
 Donor’s tax or gift tax is a tax imposed on the right or privilege of the donor
to make a gift. It is a tax on a donation or gift, hence an excise tax.

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 Requisites of a Valid Donation

 Capacity of the Donor

 Donative intent (except gifts under Sec. 100 NIRC)
 Acceptance by the Donee
 Delivery of the gift to the donee either actually or constructively

 A donor subject to tax may be a natural or juridical person.

 Properties, whether real or personal, tangible or intangible, including
alienable rights, may be the object of donation. The discussion on estate
taxation regarding the valuation of estates are also applicable to donor’s
taxation.

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 Classification of Donors

a. Citizen or resident alien

b. Non-resident alien

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 Composition of Gross Gift
A. Citizens/resident Donor
1. Real Property - wherever located
2. Tangible Personal Property - wherever located
Intangible Personal Property - wherever located

B. Non-resident alien Donor

1. Real Property - located in the Philippines
2. Tangible Personal Property - located in the Philippines
3. Intangible Personal Property - located in the Philippines unless exempted
under the principle of reciprocity.

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 Valuation of Gross Gift

If a donation is made in property, the Fair Market Value

thereof at the time of the donation shall be considered the
amount of the gift. In case of real property, the FMV as
determined by the CIR or the FMV as shown in the schedule of
values fixed by the Provincial/City Assessors, whichever is
higher, shall be considered the amount of the gift.

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 Deductions from Gross Gift
(including tax-exempt donations)

 Gifts to the National Government or of its agencies.

 Gifts made in favor of an educational and/or charitable,

religious, cultural or social welfare, corporation, foundation,
thrust or philanthropic organization or research institution or
organization, provided that not more than thirty percent (30%)
of said gifts shall be used for administration purposes.

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 Deductions from Gross Gift
(including tax-exempt donations)

 Encumbrance on the property donated if assumed by the donee

in the deed of donation.

 Those specifically provided by the donor as a condition of the

donation that will diminish the value of the property received
by the donee.

 Exempt donation under special laws.

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 Basis and Rate of Tax

 There shall be imposed a tax rate of six percent (6%) on the

basis of the total gifts in excess of Two Hundred Fifty Thousand
Pesos (P250,000) exempt gift made during the calendar year.

 If there is only one (1) gift given during the calendar year, the
tax due shall be based on the value of the gift donated less
allowable deductions. However, if there are several gifts made,
the tax due shall be computed based on the total net gifts made
during the calendar year.

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 The Law that Governs the Imposition of Donor’s Tax

 The donor’s tax is not a property tax, but is a tax imposed on the
transfer of property by way of gift inter vivos. (Lladoc vs.
Commissioner of Internal Revenue, L-19201, June 16, 1965; 14
SCRA, 292)
 The donor’s tax shall not apply unless and until there is a
completed gift. The transfer of property by gift is perfected from
the moment the donor knows of the acceptance by the donee; it is
completed by the delivery, either actually or constructively, of the
donated property to the donee.
 Thus, the law in force at the time of the perfection/completion of
the donation shall govern the imposition of the donor’s tax.
[Sec. 12 of RR 12-2018]

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 Donor’s Tax Credit

For foreign donor’s tax paid on a donation/s, a

credit against the Philippine donor’s tax may be
taken subject to limitations.

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 Administrative Requirements
on Donor’s Tax
The Donor’s Tax Return (BIR Form 1800) is filed by the
person who transfers gift “intervivos” unless the transfer is exempt
from donor’s tax under Sec. 101 of the NIRC.

A separate return shall be filed for each gift made on

different dates during the year. However , only one return shall be
filed for several gifts made by the donor to different donees
on the same date. If the gift involves conjugal / community
property, each spouse shall file separate return corresponding
to his or her respective share in the conjugal / community
property.

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 Transfer for Less Than Adequate
and Full Consideration
Where property, other than real property referred to in Section 24 (D), 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, 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 (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 12-2018

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 Donor’s Tax Return [Sec. 90 of NIRC]

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 Documentary Requirements
The list of documentary requirements
for the filing of donor’s tax return is
provided for under RMO 35-2018.

This portion shows the mandatory

documents as well as those required for
real properties.

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 Procedures

Additional requirements are

provided for in the same
CDR.

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 Procedures

RMO 49-2018 – amending policies pertaining to ONETTs payment in line with the
passage of RA 11032, otherwise known as the “Ease of Doing Business & Efficient
Government Service Delivery Act of 2018,” such as:

 RCOs assigned in each RDOs who are already authorized to accept tax payments
during tax deadlines shall, in addition to such, be allowed to accept tax payments,
relative to ONETTs such as payment of capital gains tax, stamp tax, donor’s tax,
estate tax and other ONETT-related taxes. Provided, however, that for ONETT-
related taxes above twenty-thousand pesos (P20,000), the RCO shall only accept
“Manager’s or Cashier’s Check” as payment.

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 Procedures

 Concerned RCO shall on a daily basis, have the collection

deposited with the concerned Authorized Government Depository
bank (AGB), by separating the cash and check deposit slips for all
ONETTs from the other tax types.

 Once deposited, the concerned RCO shall provide the ONETT-

processing officer with the photocopies of the eROR and deposit
slip duly stamped “Received” by the AGDB with the corresponding
details of ONETTs.

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 Procedures

 File the return in triplicate (two copies for the BIR and one copy for the taxpayer)
with any AAB of the RDO having jurisdiction over the place of the domicile of the
donor at the time of the transfer. In places where there are no AABs, the return will
be filed directly with the Revenue Collection Officer, or if there is no legal residence
in the Philippines, with Revenue District No. 39 - South Quezon City.
 In the case of gifts made by a non-resident alien, the return may be filed with
Revenue District No. 39 - South Quezon City, or with the Philippine Embassy or
Consulate in the country where donor is domiciled at the time of the transfer.
 Submit all documentary requirements and proof of payment to the RDO having
jurisdiction over the place of residence of the donor.

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 Deadline

Within thirty (30) days after the date the gift (donation) is made. A
separate return shall be filed for each gift (donation) made on the
different dates during the year reflecting therein any previous net gifts
made during the same calendar year.

If the gift (donation) involves conjugal/community property, each

spouse will file separate returns corresponding to his/ her respective
shares in the conjugal/community property. This rule will also apply in
the case of co-ownership over the property.

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 Exemptions from Donor’s Tax under Special Laws
 Donation to the International Rice Research Institute;
 Donation to the Philippine-American Cultural Foundation;
 Donation to the Ramon Magsaysay Foundation;
 Donation to the Philippine Inventor’s Commission;
 Donation to the Integrated Bar of the Philippines;
 Donation to the Development Academy of the Philippines;
 Donation to the Aquaculture Department of the Southeast Asian Fisheries
Development Center of the Philippines;
 Donation to the National Social Action Council ; and
 Donation of equipment, materials and services to the Task Force on
Human Settlement.

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 Exemption of Certain Gifts

Gifts Made by a Resident or by a Non-resident, 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; 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.

Sec. 17, RR 12-2018

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 Illustration

Ms. MRU made the following donation on:

January 30, 2018 – P2,000,000

March 30, 2018 – 1,000,000
August 15, 2018 – 500,000

Compute the donor’s tax due

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 Solution
Date of donation Amount Donor’s Tax

January 30, 2018 P2,000,000

January 30, 2018 donation 2,000,000

Less: Exempt Gift (250,000)
Net Gift 1,750,000
Rate 6%

Tax Due / Payable on January Donation P105,000

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 Solution
Date of donation Amount Donor’s Tax
March 30, 2018 P1,000,000

March 30, 2018 donation 1,000,000

Add: January 2018 donation 2,000,000
Total donation as of March 30, 2018 3,000,000
Less: Exempt Gift (250,000)
Total 2,750,000
Tax Rate 6%

Tax Due Thereon 165,000

Less: Tax due/paid on January donation 105,000
Tax Due/Payable on the March donation P60,000

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 Solution
Date of donation Amount Donor’s Tax
August 15,2018 P500,000

August 15, 2018 donation 500,000

Add: January 2018 donation 2,000,000
March 2018 donation 1,000,000
Less: Exempt Gift (250,000)
Total 3,250,000
Tax Rate 6%

Tax Due Thereon 195,000

Less: Tax due/paid on Jan/March donation 165,000
Tax Due/Payable on the August donation P30,000

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 eCAR for Donor’s Tax

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 eCAR for Donor’s Tax

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 eCAR for Donor’s Tax

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 ONETT Routing Slip
RMO 35-2018 Annex A provides for an
ONETT routing slip which aims to
effectively monitor the processing of all
ONETT transactions and identify proper
accountability. Furthermore, revised CDRs
for ONETT are provided under the same
RMO to facilitate the efficient processing of
eCARs.

Full Text | Annex A

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 Guidelines and Procedures in the Processing and
Monitoring of ONETT
A. Officer of the Day

1. Checks and accomplishes the Checklist of Documentary

Requirements
2. Computes the tax due using Computation Sheet
3. Verifies TIN of TP
4. Assists TP in filling up the tax returns and instructs TP to pay to AAB

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 Guidelines and Procedures in the Processing and
Monitoring of ONETT
B. CSS Staff

Issues TIN in case the transacting parties have no TINs

C. Officer of the Day

1. Checks completeness of documents and stamps “Received
Complete Documents” on the OCS
2. Issues claim slip
3. Records in logbook after payment of applicable taxes

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 Guidelines and Procedures in the Processing and
Monitoring of ONETT
D. RDO or ARDO

1. Reviews and signs OCS and CDR (based on threshold under

RMO No. 55-2016)

E. Chief, Collection Section

1. Verifies correctness of payment
2. Signs OCS

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 Guidelines and Procedures in the Processing and
Monitoring of ONETT
F. ONETT Encoder

1. Prepares eCAR

G. RDO or ARDO
1. Signs eCAR (based on threshold under RMO No. 55-2016)

H. ONETT Staff
1. Records to logbook and releases to TP

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