CHAPTER II

DONOR'S TAX
SEC. 98. Imposition of Tax. -
(A) There shall be levied, assessed, collected and paid upon the transfer by any person,
resident or nonresident, of the property by gift, a tax, computed as provided in Section
99.
(B) The tax 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.
SEC. 99. Rates of Tax Payable by Donor. -
(A) In General. - The tax for each calendar year shall be computed on the basis of the
total net gifts made during the calendar year in accordance with the following schedule:
If the net gift is:

Over But Not Over The Tax Shall be Plus Of the Excess Over

P 100,000 Exempt

P 100,000 200,000 0 2% P100,000

200,000 500,000 2,000 4% 200,000

500,000 1,000,000 14,000 6% 500,000

1,000,000 3,000,000 44,000 8% 1,000,000

3,000,000 5,000,000 204,000 10% 3,000,000

5,000,000 10,000,000 404,000 12% 5,000,000

 10,000,000 1,004,000 15% 10,000,000

(B) Tax Payable by Donor if Donee is a Stranger. - When the donee or beneficiary is
stranger, the tax payable by the donor shall be thirty percent (30%) of the net gifts. For
the purpose of this tax, a 'stranger', is a person who is not a:
(1) Brother, sister (whether by whole or half-blood), spouse, ancestor and lineal
descendant; or
(2) Relative by consanguinity in the collateral line within the fourth degree of
relationship.
(C) 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.
SEC. 100. 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.
SEC. 101. Exemption of Certain Gifts. - The following gifts or donations shall be
exempt from the tax provided for in this Chapter:
(A) In the Case of Gifts Made by a Resident. -
(1) Dowries or gifts made on account of marriage and before its celebration or
within one year thereafter by parents to each of their legitimate, recognized natural,
or adopted children to the extent of the first Ten thousand pesos (P10,000):
(2) 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
(3) Gifts in favor of an educational and/or charitable, religious, cultural or social
welfare corporation, institution, accredited nongovernment organization, 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. 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 non-stock 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.
(B) In the Case of Gifts Made by a Nonresident not a Citizen of the Philippines. -
(1) 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.
(2) 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.
(C)Tax Credit for Donor's Taxes Paid to a Foreign Country. -
(1) In General. - The tax imposed by this Title upon a donor who was a citizen or
a resident at the time of donation shall be credited with the amount of any donor's
tax of any character and description imposed by the authority of a foreign country.
(2) Limitations on Credit. - The amount of the credit taken under this Section
shall be subject to each of the following limitations:
(a) The amount of the credit in respect to the tax paid to any country shall not
exceed the same proportion of the tax against which such credit is taken, which
 the net gifts situated within such country taxable under this Title bears to his
entire net gifts; and
(b) The total amount of the credit shall not exceed the same proportion of the
tax against which such credit is taken, which the donor's net gifts situated
outside the Philippines taxable under this title bears to his entire net gifts.
SEC. 102. Valuation of Gifts Made in Property. - If the gift is made in property, the fair
market value thereof at the time of the gift shall be considered the amount of the gift. In
case of real property, the provisions of Section 88(B) shall apply to the valuation
thereof.
SEC. 103. Filing of Return and Payment of Tax. -
(A) Requirements. - any individual who makes any transfer by gift (except those which,
under Section 101, are exempt from the tax provided for in this Chapter) shall, for the
purpose of the said tax, make a return under oath in duplicate. The return shall set forth:
(1) Each gift made during the calendar year which is to be included in computing
net gifts;
(2) The deductions claimed and allowable;
(3) Any previous net gifts made during the same calendar year;
(4) The name of the donee; and
(5) Such further information as may be required by rules and regulations made
pursuant to law.
(B) Time and Place of Filing and Payment - The return of the donor required in this
Section shall be filed within thirty (30) days after the date the gift is made and the tax
due thereon shall be paid at the time of filing. Except in cases where the Commissioner
otherwise permits, the return shall be filed and the tax paid to an authorized agent bank,
the Revenue District Officer, Revenue Collection Officer or duly authorized Treasurer of
the city or municipality where the donor was domiciled at the time of the transfer, or if
there be no legal residence in the Philippines, with the Office of the Commissioner. In
the case of gifts made by a nonresident, the return may be filed with the Philippine
Embassy or Consulate in the country where he is domiciled at the time of the transfer,
or directly with the Office of the Commissioner.
SEC. 104. Definitions. - For purposes of this Title, the terms 'gross estate' and 'gifts'
include real and personal property, whether tangible or intangible, or mixed, wherever
situated: Provided, however, That where the decedent or donor was a nonresident alien
at the time of his death or donation, as the case may be, his real and personal property
so transferred but which are situated outside the Philippines shall not be included as
part of his 'gross estate' or 'gross gift': Provided, further, That franchise which must be
exercised in the Philippines; shares, obligations or bonds issued by any corporation or
sociedad anonima organized or constituted in the Philippines in accordance with its
laws; shares, obligations or bonds by any foreign corporation eighty-five percent (85%)
of the business of which is located in the Philippines; shares, obligations or bonds
issued by any foreign corporation if such shares, obligations or bonds have acquired a
business situs in the Philippines; shares or rights in any partnership, business or
industry established in the Philippines, shall be considered as situated in the
Philippines: Provided, still further, that no tax shall be collected under this Title in
respect of intangible personal property:
(a) if the decedent at the time of his death or the donor at the time of the donation
was a citizen and resident of a foreign country which at the time of his death or
donation did not impose a transfer tax of any character, in respect of intangible
personal property of citizens of the Philippines not residing in that foreign country,
or
(b) if the laws of the foreign country of which the decedent or donor was a citizen
and resident at the time of his death or donation allows a similar exemption from
transfer or death taxes of every character or description in respect of intangible
personal property owned by citizens of the Philippines not residing in that foreign
country.
The term 'deficiency' means:
(a) the amount by which tax imposed by this Chapter exceeds the amount shown
as the tax by the donor upon his return; but the amount so shown on the return
shall first be increased by the amount previously assessed (or Collected without
assessment) as a deficiency, and decreased by the amounts previously abated,
refunded or otherwise repaid in respect of such tax, or
(b) if no amount is shown as the tax by the donor, then the amount by which the tax
exceeds the amounts previously assessed, (or collected without assessment) as a
deficiency, but such amounts previously assessed, or collected without
assessment, shall first be decreased by the amount previously abated, refunded or
otherwise repaid in respect of such tax.