Bank debit memo number and date should be indicated in the return for taxpayers paying under

DONOR’S TAX (w/ train law) the bank debit system.

Procedures
Payments may also be made thru the epayment channels of AABs thru either their online facility,
credit/debit/prepaid cards, and mobile payments.
·  Who Shall File

For transactions covered by one (1) Deed of Sale/Exchange/Donation involving one (1) to three (3)
The Donor’s Tax Return (BIR Form No. 1800) shall be filed in triplicate by any person, natural or
properties, the taxpayer can avail of the fast lane pursuant to Revenue Memorandum Circular
juridical, resident or non-resident, who transfers or causes to transfer property by gift, whether
(RMC) No. 43-2018, as amended by RMC No. 107-2018. Payments amounting to twenty thousand
in trust or otherwise, whether the gift is direct or indirect and whether the property is real or
pesos (P 20,000.00) and below shall be paid in cash while payments above twenty thousand pesos
personal, tangible or intangible.
(P 20,000.00) shall be made through Manager’s Check or Cashier’s Check to the Revenue Collection
Officer of the RDO concerned.
Taxpayers who are filing BIR Form no. 1800 are excluded in the mandatory coverage from using
the eBlRForms (Section 2 of RR No. 9-2016).
The time of filing and payment vary depending on the law applicable at the time of donation. 

·  When and Where to File and Pay

Documentary Requirements

The Donor’s Tax Return (BIR Form No. 1800) shall be filed within thirty (30) days after the date
Mandatory Requirements [additional two (2) photocopies of each document]:
the gift (donation) is made.

1. Duly Notarized Original Deed of Donation;

The return shall be filed with any Authorized Agent Bank (AAB) of the Revenue District Office
2. Taxpayer Identification Number (TIN) of Donor and Donee/s;
having jurisdiction over the place of domicile of the donor at the time of the donation, or if there
3. Proof of claimed tax credit, if applicable;
is no legal residence in the Philippines, with the Office of the Commissioner of Internal Revenue,
4. Validated return and Original Official Receipt/Deposit Slip as proof of payment; for no
(Revenue District Office No. 39, South Quezon City). In case of gifts made by a non-resident
payment return, copy of Acknowledgment Receipt of return filed thru eBlRForms;
alien, the return may be filed with RDO No. 39, or with the Philippine Embassy or Consulate in the
5. Duly Notarized Original Special Power of Attorney (SPA) for the transacting party if
country where he is domiciled at the time of donation.
the person signing is not one of the parties to the Deed of Donation;

A separate return shall be filed by each donor for each gift (donation) made on different dates
For Real Properties [additional two (2) photocopies of each document]:
during the year reflecting therein any previous net gifts made in the same calendar year. Only one
return shall be filed for several gifts (donations) by a donor to the different donees on the same
6. Certified True Copy/ies of the Original/Transfer/Condominium Certificate/s of Title
date.
(front and back pages) of the donated property, if applicable;
7. Certified True Copy/ies of the Tax Declaration at the time or nearest to the date of the
If the gift (donation) involves conjugal/community property, each spouse shall file separate return
transaction issued by the Local Assessor’s Office for land and improvement, if
corresponding to his/her respective share in the conjugal/community property donated.  This rule
applicable;
shall likewise apply in the case of co-ownership over the property being donated.   
8. Certification of No Improvement issued by the Assessor’s Office, if applicable;

When the return is filed with an AAB, taxpayer must accomplish and submit BIR-prescribed
For Personal Properties [additional two (2) photocopies of each document]:
deposit slip, which the bank teller shall machine validate as evidence that payment was received
by the AAB. The AAB receiving the tax return shall stamp mark the word “Received” on the
9. Proof of valuation of shares of stock at the time of donation, if applicable;
return and also machine validate the return as proof of filing the return and payment of the tax
by the taxpayer, respectively. The machine validation shall reflect the date of payment, amount
paid and transactions code, the name of the bank, branch code, teller’s code and teller’s initial.
 a. For shares of stocks not listed/not traded - Latest Audited Financial Statement of ·  Effective January 1, 1998 to December 31, 2017 (RA No. 8424)
the issuing corporation with computation of the book value per share
b. For shares of stocks listed/traded - Price index from the Philippine Stock Exchange Net Gift Over But not Over The Tax Shall be Plus Of the Excess Over
(PSE)/latest Fair Market Value (FMV) published in the newspaper at the time of        100,000.00 exempt    
transaction
     100,000.00      200,000.00 0 2%    100,000.00
c. For club shares - Price published in newspapers on the transaction date or nearest to
     200,000.00      500,000.00 P    2,000.00 4%     200,000.00
the transaction date
     500,000.00   1,000,000.00      14,000.00 6%     500,000.00
10. Stock certificate;   1,000,000.00   3,000,000.00      44,000.00 8%  1,000,000.00
11. Proof of valuation of other types of personal properties, if applicable;   3,000,000.00   5,000,000.00    204,000.00 10%  3,000,000.00
12. Proof of claimed deductions, if applicable;   5,000,000.00 10,000,000.00    404,000.00 12%   5,000,000.00
13. Certificate of deposit/investment/indebtedness/stocks for donated cash or securities; 10,000,000.00 and over 1,004,000.00 15% 10,000,000.00
14. Certificate of registration of motor vehicle, if any; Notes:
1.    When the gifts are made during the same calendar year but on different dates, the
Other Additional Requirements, if applicable [additional two (2) photocopies of each document]: donor's tax shall be computed based on the total net gifts during the year.
2.    Donation made to a stranger is subject to 30% of the net gift. A stranger is a person who
· Duly Notarized Original Special Power of Attorney (SPA), if the person is not a:
transacting/processing the transfer is not a party to the transaction ·  brother, sister (whether by whole or half-blood), spouse, ancestor and lineal descendants; or
· Certification from the Philippine Consulate if document is executed abroad ·  relative by consanguinity in the collateral line within the fourth degree of relationship.
i. Location Plan/Vicinity map issued by the Local Assessor’s Office if zonal
value cannot be readily determined from the documents submitted ·  Effective July 28, 1992 to December 31, 1997 (RA No. 7499)
· Certificate of Exemption/BIR Ruling issued by the Commissioner of Internal Revenue or
his authorized representative, if tax exempt Net Gift Over But not Over The Tax Shall be Plus Of the Excess Over
· Such other documents as may be required by law/rulings/regulations/etc.
       50,000.00 exempt    
     50,000.00    100,000.00 1.50%        50,000.00
TAX RATES
   100,000.00    200,000.00 P     750.00 3%    100,000.00
   200,000.00    500,000.00     3,750.00 5%    200,000.00
(The rate applicable shall be based on the law prevailing at the time of donation)
   500,000.00 1,000,000.00  18,750.00 8%    500,000.00
1,000,000.00 3,000,000.00   58,750.00 10% 1,000,000.00
·  Effective January 1, 2018 and onwards (Republic Act (RA) No. 10963/TRAIN)
3,000,000.00 5,000,000.00 258,750.00 15% 3,000,000.00
Rate - The donor’s tax for each calendar year shall be six percent (6%) computed on the basis of 5,000,000.00 and over 558,750.00 20% 5,000,000.00
the total gifts in excess of Two Hundred Fifty Thousand Pesos (P250,000) exempt gift made Note:
during the calendar year. 1.    Donation made to a stranger is subject to 10% of the net gift. A stranger is a person who is
Notes: not a:
1.  When the gifts are made during the same calendar year but on different dates, the donor's ·  brother, sister (whether by whole or half-blood), spouse, ancestor and lineal descendants; or
tax shall be computed based on the total net gifts during the year. ·  relative by consanguinity in the collateral line within the fourth degree of relationship. 
2.  The relationship between the donor and the donee(s) shall not be considered. Republic Act
No. 10963 (TRAIN Law) does not distinguish donations made to relatives, or donations made to ·  Effective January 16, 1981 to July 27, 1992 (Presidential Decree No. 1773)
strangers.
Net Gift Over But not Over The Tax Shall be Plus Of the Excess Over
         1,000.00 exempt     A.  “In the Case of Gifts made by a Resident
         
       1,000.00      50,000.00              1.50%          1,000.00 ·  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;
     50,000.00      75,000.00 P    735.00 2.50%      50,000.00
and
     75,000.00    100,000.00    1,360.00 3%      75,000.00
   100,000.00    150,000.00    2,110.00 6%    100,000.00
·  Gifts in favor of an educational and/or charitable, religious, cultural or social welfare
   150,000.00    200,000.00    5,110.00 9%    150,000.00
corporation, institution, accredited non-government organization, trust or philanthropic
   200,000.00    300,000.00    9,610.00 12%    200,000.00 organization or research institution or organization: Provided, however, not more than 30% of said
   300,000.00    400,000.00   21,610.00 15%    300,000.00 gifts will be used by such donee for administration purposes. For the purpose of this exemption, a
   400,000.00    500,000.00   36,610.00 18%    400,000.00 ‘non-profit educational and/or charitable corporation, institution, accredited nongovernment
   500,000.00    625,000.00   54,610.00 21%    500,000.00 organization, trust or philanthropic organization and/or research institution or organization’ is a
   625,000.00    750,000.00   80,860.00 24%    625,000.00 school, college or university and/or charitable corporation, accredited nongovernment
organization, trust or philanthropic organization and/ or research institution or organization,
   750,000.00    875,000.00 110,860.00 28%    750,000.00
incorporated as a nonstock entity, paying no dividends, governed by trustees  who receive no
   875,000.00 1,000,000.00 145,860.00 32%    875,000.00
compensation, and devoting all its income, whether students’ fees or gifts, donation, subsidies or
1,000,000.00 2,000,000.00 185,860.00 36% 1,000,000.00
other forms of philanthropy, to the accomplishment and promotion of the purposes enumerated in
2,000,000.00 3,000,000.00   545,860.00  38%   2,000,000.00 its Articles of Incorporation.” (Sec. 17 of RR No. 12-2018)
3,000,000.00    925,860.00  40%    3,000,000.00 
B.  In the Case of Gifts Made by a Nonresident not a Citizen of the Philippines
Note:    
·  Gifts made to or for the use of the National Government or any entity created by any of its
1.    Donation made to a stranger shall be either the amount computed in accordance with the agencies which is not conducted for profit, or to any political subdivision of the said Government.
preceding schedule or twenty percent (20%) of the net gifts, whichever is higher. A stranger is a
person who is not a: ·  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
·  brother, sister (whether by whole or half-blood), spouse, ancestor and lineal descendant; or organization: Provided, however, that not more than thirty percent (30%) of said gifts shall be
·  relative by consanguinity in the collateral line within the fourth degree of relationship. used by such donee for administration purposes.   (Sec. 101 (B) of NIRC, as amended)

Pertinent laws: 2. What are the bases in the valuation of property?  

·  Commonwealth Act. No. 466 – effective July 1, 1939 to September 14, 1950
·  Republic Act No. 579 – effective September 15, 1950 to August 3, 1969
·  Republic Act No. 6110 – effective August 4, 1969 to December 31, 1972 The properties comprising the gift/donation shall be valued based on their fair market value as of
·  Presidential Decree No. 69 – effective January 1, 1973 to January 15, 1981 the time of donation.
·  Presidential Decree No. 1773 – effective January 16, 1981 to July 27, 1992
·  Republic Act No. 7499 – effective July 28, 1992 to December 31, 1997
·  Republic Act No. 8424 – effective January 1, 1998 to December 31, 2017 If the property is a real property, the fair market value thereof as of the time of donation shall
·  Republic Act No. 10963 (TRAIN Law)– effective January 1, 2018 to present be, whichever is the higher of –

Frequently Asked Questions 1. The fair market value as determined by the Commissioner, or

1. What donations are tax exempt? 2. The fair market value as shown in the schedule of values fixed by the provincial and city
assessors.
In the case of shares of stocks, the fair market value shall depend on whether the shares are
listed or unlisted in the stock exchanges. Unlisted common shares are valued based on their book
value while unlisted preferred shares are valued at par value. In determining the book value of
common shares, appraisal surplus shall not be considered as well as the value assigned to
preferred shares, if there are any. On this note, the valuation of unlisted shares shall be exempt
from the provisions of RR No. 6-2013, as amended.
For shares which are listed in the stock exchanges, the fair market value shall be the arithmetic
mean between the highest and lowest quotation at a date nearest the date of donation, if none is
available on the date of donation.
The fair market value of units of participation in any association, recreation or amusement club
(such as golf, polo, or similar clubs), shall be the bid price nearest the date of donation published
in any newspaper or publication of general circulation.
To determine the value of the right to usufruct, use or habitation, as well as that of annuity,
there shall be taken into account the probable life of the beneficiary in accordance with the
latest basic standard mortality table, to be approved by the Secretary of Finance, upon
recommendation of the Insurance Commissioner. (Sec. 2, RR No. 17-2018 and Sec. 5 of RR No. 12-
2018)  exemption under Section 101(A)(2) of the TRAIN Law. (Section II, RMC No. 53-2013)
3. For purposes of Donor’s Tax, what does the term “Net Gift” mean?
For purposes of the donor’s tax, “net gift” shall mean the net economic benefit from the transfer
that accrues to the donee. Accordingly, if a mortgaged property is transferred as a gift, but
imposing upon the donee the obligation to pay the mortgage liability, then the net gift is measured
by deducting from the fair market value of the property the amount of mortgage assumed. (Sec.
12 of RR No. 12-2018)
4. Under R.A. No.10963 (TRAIN Law), is any contribution in cash or in kind to any
candidate or political party or coalition of parties for campaign purposes subject to the
payment of donor’s tax?
Sec. 28 (B) of RA No. 10963 (TRAIN Law) states that 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.”
5. For purposes of Donor’s Tax, is a legally adopted child considered stranger?
A legally adopted child is entitled to all the rights and obligations provided by law to legitimate
children, and therefore, donation to him shall not be considered as donation made to stranger.
(Sec. 10, RR No. 2-2003). However, with the passage of RA No. 10963 (TRAIN Law), effective on
January 1, 2018, the relationship between the donor and donee(s) is no longer considered in the
computation of donor’s tax.
6. For purposes of Donor’s Tax, are donations between businesses considered donations made
between strangers?
Donation made between business organizations and those made between an individual and a
business organization shall be considered as donation made to a stranger.  (sec. 10, RR No. 2-
2003). However, with the passage of RA No. 10963 (TRAIN Law), effective on January 1, 2018,
the relationship between the donor and donee(s) is no longer considered in in the computation of
donor’s tax.
7. Are gratuitous donations to Homeowners’ Associations subject to Donor’s Tax?
Gifts, donations, and other contributions received by the Homeowners’ Associations (Associations)
are subject to the payment of donor’s tax pursuant to Section 98, and 99 of the NIRC, as
amended by Sec. 28 of RA 10963 (TRAIN Law). Endowment or gifts received by such associations
are not exempt from donor’s tax considering that gifts to Associations are not qualified for
8. Is an onerous donation or donation in exchange for goods, services or use or lease of
properties to Homeowners’ Association subject to Donor’s Tax?
Pursuant to RMC No. 9-2013, associations are subject to the corresponding internal revenue taxes
imposed under the Tax Code of 1997 on their income of whatever kind and character. In this
regard, contributions to associations in exchange for goods, services and use of properties
constitute as other assessments/charges from activity in exchange for the performance of a
service, use of properties or delivery of an object. As such, these fees are income on the part of
the associations that are subject to income tax under Section 27 of the Tax Code, as amended.
(Section III, RMC No. 53-2013)
9. What is the proper treatment for transactions involving transfer of property other than
real property referred to in Section 24 (D) for less than adequate and full consideration?
Where property, other than real property referred to in Section 24(D) of the NIRC, as amended,
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 (Donor’s Tax), 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 (a 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 No. 12-2018)

10. What entities are considered exempted from Donor’s Tax under special laws?

The list below consists of entities considered Donor’s Tax exempt under special laws including, but
not limited to the following:
·  Rural Farm School (Sec. 14, R.A. No. 10618)
·  People’s Television Network, Incorporated (Sec. 15, R.A. No. 10390)
·  People’s Survival Fund (Sec. 13, R.A. No. 10174)
·  Aurora Pacific Economic Zone and Freeport Authority (Sec. 7, R.A. No. 10083)
·  Girl Scouts of the Philippines (Sec. 11, R.A. No. 10073)
·  Philippine Red Cross (Sec. 5, R.A. No. 10072)
·  Tubbataha Reefs Natural Park (Sec. 17, R.A. No. 10067)
·  National Commission for Culture and the Arts (Sec. 35, R.A. No. 10066)
·  Philippine Normal University (Sec. 7, R.A. No. 9647)
·  University of the Philippines (Sec. 25, R.A. No. 9500)
·  National Water Quality Management Fund (Sec. 9, R.A. No. 9275)
·  Philippine Investors Commission (Sec. 9, R.A. No. 3850)
·  Ramon Magsaysay Award Foundation (Sec. 2, R.A. 3676)
·  Philippine-American Cultural Foundation (Sec. 4, P.D. 3062)
·  International Rice Research Institute (Art. 5(2), PD 1620)
·  Task Force on Human Settlements (Sec. 3(b)(8), E.O. 419)
·  National Social Action Council (Sec. 4, P.D. 294)
·  Aquaculture Department of the Southeast Asian Fisheries Development Center (Sec. 2, P.D. 292)
·  Development Academy of the Philippines (Sec. 12, PD 205)
·  Integrated Bar of the Philippines (Sec. 3, PD 181)