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Donor S Tax Reviewer PDF
Donor S Tax Reviewer PDF
MARIVIC B. DE GRACIA
TAXATION 2
MARIVIC DE GRACIA
DONOR’S TAX transferee before the death of the transferor the donor is still alive
DONATION- is an act of liberality whereby a person (donor) disposes gratuitously Transferor retains the ownership, full or naked, of
of a thing or right in favour of another (done) who accepts it. (Art. 725 NCC) the property conveyed
-A person gives to another a thing or right on account of the latter’s merits or of
the services rendered by him to the donor provided do not constitute a Donor’s death determines the acquisition of the
demandable debt or when the gift imposes upon the done a burden which is less right to the property
than the value of the thing given. (Art. 726 NCC) The transfer is revocable before the transferor’s The transfer is irrevocable
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-only the difference between the FMV of the property and the value of CHARACTERISTICS OF DONATION MORTIS CAUSA
the consideration which is deemed as donation.
1. It conveys no title or ownership to the transferee before the death of the
2. Condonation or remission of the debt, not due to rendition of service. transferor; or what amounts to the same thing, that the transferor should retain the
3. Renunciation of inheritance in favour of identified heir/s to the exclusion of other ownership (full or naked) and control of the property while alive;
co-heirs. (Sec. 11[4] RR-2-03)
2. That before his death, the transfer should be revocable by the transferor at will
KINDS OF DONATION ad nutum; but revocability may be provided in the donor to dispose of the
properties conveyed; and
DONATION MORTIS CAUSA DONATION INTER VIVOS
Estate tax (5%-20%) Donor’s tax (2%-15%) 3. That the transfer should be void if the transferor should survive the transferee.
Made in consideration of death without the donor’s Is made without such
intention to lose the thing conveyed or its free consideration but out of the
disposal in case of survival donor’s generosity
Testamentary in nature, should be embodied in a
last will and testament (Art. 728 NCC)
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COMPILED NOTES: SABABAN, MAMALATEO & CHAVEZ
MARIVIC B. DE GRACIA
TAXATION 2
MARIVIC DE GRACIA
DONOR’S TAX/ GIFT TAX FORMULA IN CASE OF SECOND DONATION WITHIN THE SAME CALENDAR
YEAR:
-not a property tax but an excise tax imposed on the privilege of the owner to
give. GROSS GIFT
-imposed upon the transfer by any person, resident or non-resident, of any Less: ALLOWED DEDUCTION/ EXEMPTION
property by gift. (Sec. 99 NIRC) NET GIFT
Add: PRIOR NET GIFTS WITHIN THE SAME CALENDAR YEAR
-apply whether the transfer is in trust or otherwise, whether the gift is direct or
TOTAL TAXABLE NET GIFTS
indirect, and whether the property is real or personal, tangible or intangible. (Sec. Multiply: RATE___________________________________
98 NIRC) DONOR’S TAX DUE ON TOTAL NET GIFTS
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Less: DONOR’S TAX DUE ON PRIOR GIFTS W/IN THE SAME CY
FORMULA: DONOR’S TAX PAYABLE
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COMPILED NOTES: SABABAN, MAMALATEO & CHAVEZ
MARIVIC B. DE GRACIA
TAXATION 2
MARIVIC DE GRACIA
CLASSIFICATION OF DONOR ALLOWED DEDUCTIONS OR EXEMPTIONS FROM THE GROSS ESTATE
-tax for each calendar year shall be computed on the basis of the total net gifts
IMMOVABLE AND made during the year.
INTANGIBLE PERSONAL
TANGIBLE PERSONAL
PROPERTY
PROPERTY 1. Donor’s tax due is computed on a cumulative basis;
WITHIN WITHOUT WITHIN WITHOUT 2. The donor’s tax due is based on the net gifts
RCD
RAD
NRCD
NRAD - -
NRAD WITH - - -
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RECIPROCITY
VALUATION OF DONATION
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If there is a reciprocity clause such intangible personal property located within
the Philippines is NOT subject to donor’s tax, therefore not included in the gross
gift.
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COMPILED NOTES: SABABAN, MAMALATEO & CHAVEZ
MARIVIC B. DE GRACIA
TAXATION 2
MARIVIC DE GRACIA
RCD, RAD, NRAD
EXEMPTION OF CERTAIN GIFTS
NRCD
DOWRIES -
Requisites:
i. made on account of marriage and before its celebration or within 1 year thereafter
ii. by parents to each of their legitimate, recognized natural, or adopted children
iii. to the extent of first P10,000.
GIFTS TO NATIONAL GOVERNMENT -not conducted for profit
Requisites:
i. the entity or institution must either or any of those mentioned
ii. not more than 30% of said gifts shall be used by such done for administration
iii. incorporated as a nonstock entity, paying no dividends, governed by trustees who receive no compensation, and devoting all its
income, whether students’ fee or gifts, donation, subsidies or other forms of philanthropy, to the accomplishment and promotion of the
purposes enumerated in its Articles of incorporation.
rd
Note: in case of NRA 3 requisite does not apply
If a mortgaged property is transferred as gift, BUT imposing upon the done the obligation to pay the mortgage liability,
-then the net gift is measured by deducting from the FMV of the property the amount of mortgage assumed. (Sec. 11, RR 2-03)
DIMINUTIONS
Eg. If A donated P500,000 to B with instruction that B shall give P100,000 to SSC-R, the taxable net gift would only be P400,000.
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COMPILED NOTES: SABABAN, MAMALATEO & CHAVEZ
MARIVIC B. DE GRACIA
TAXATION 2
MARIVIC DE GRACIA
EXEMPTION UNDER SPACIAL LAWS: TAX PAYABLE BY THE DONOR IF DONEE IS A STRANGER
1. donations to Philippine government for scientific, engineering and technological -30% of the net gifts
research, invention and development (RA 1606)
2. Donations to social welfare, cultural, and charitable organizations (PD 507; RA STRANGER:
1916) a. Brother, sister (whether by whole or half-blood), legally adopted child
3. Donations to the International Rice Research Institute (RA 2707) spouse, ancestor, and lineal descendant; or
th
4. Donations to Ramon Magsaysay Award Foundation (RA 3076) b. Relative by consanguinity in the collateral line within the 4 degree of
5. Donations to Southern Philippines Development Administration (PD 690) relationship
7. Donations to the Intramuros Administration (PD 1616) c. donation made between business organizations and those made
between an individual and a business organization
PROCEDURE FOR COMPUTING NET GIFTS
DONATIONS TO POLITICAL PARTY OR COALITION OF PARTIES FOR
NET GIFT- the net economic benefit from the transfer that accrues to the donee. ELECTION CAMPAIGN
-governed by the Election Code
The tax for each calendar year shall be computed on the basis of the total net gifts -Political/electoral contributions, duly reported to the COMELEC, are not subject
made during the calendar year in accordance with the schedule of tax rates to the payment of any gift tax.
prescribed in the law.
FILING OF RETURNS AND PAYMENTS OF DONOR’S TAX (Sec. 103)
The tax is imposed on the cumulative basis during the calendar year; i.e., the
rates are applied on the aggregate net gifts during the calendar year, but donor’s Requirements:
taxes paid during the calendar year are credited against the donor’s tax due on -any person making a donation unless donation is specifically exempt is required,
the latest donation during the same calendar year. for every donation, to accomplish under oath a donor’s tax return in duplicate.
SCHEDULAR RATES OF DONOR’S TAX IMPOSABLE ON DONATION MADE TIME AND PLACE OF FILING AND PAYMENT
TO A DONEE WHO IS NOT A STRANGER.
Donor’s tax return: filed within 30 days after the date the gift is made or
BUT NOT OVER THE TAX PLUS OF THE completed, no extension allowed
OVER SHALL BE EXCESS OVER
- P 100,000 EXEMPT Tax due: paid at the same time that the return is filed/ pay as you file
P100,000 200,000 0 2% P100,000
200,000 500,000 2,000 4% 200,000 Place of filing:
500,000 1,000,000 14,000 6% 500,000 a. authorized agent bank
1,000,000 3,000,000 44,000 8% 1,000,000 b. revenue district officer
3,000,000 5,000,000 204,000 10% 3,000,000 c. revenue collection officer
5,000,000 10,000,000 404,000 12% 5,000,000 d. duly authorized treasurer of the city or municipality where the donor was
domiciled at the time of the transfer
10,000,000 1,004,000 15% 10,000,000 7
e. if there be no legal residence in the Philippines: Office of the Commissioner
f. the case of gifts made by a non-resident, 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
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Office of the commissioner shall refer to the revenue District Office having
jurisdiction over the BIR-National Office Building which houses the Office of the
Commissioner or presently, to the revenue District Office (Sec. 13, RR 2-03)
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COMPILED NOTES: SABABAN, MAMALATEO & CHAVEZ
MARIVIC B. DE GRACIA
TAXATION 2
MARIVIC DE GRACIA
-In order to be exempt from donor’s tax and to claim full deduction of the donation
the following must concur: