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 DONOR’S TAX

NIRC VS. TRAIN LAW

 LEARNING OBJECTIVES:
▫ After the discussion, the learners will be able to:
1. Define Donation and Donor’s Tax and
2. Differentiate TRAIN LAW from NIRC regarding
Donor’s Tax.
WHAT IS DONATION?

An act of transferring ownership

from the donor to donee with no
compensation.
WHAT IS DONOR’S TAX?

A tax imposed by the state on the act

of donating.
REQUISITES OF TAXABLE
GIFT:
• Capacity
• Intent
• Delivery
• Acceptance
 
PROPERTIES WHICH FORM PART OF
GROSS GIFT

• Gross gift includes real and personal

property, whether tangible or
intangible or mixed, wherever
situated.
DONORS’ TAX

NATIONAL INTERNAL REVENUE

CODE ( NIRC)
 Gifts made by a Resident or
a Citizen
  ▫ Dowries or gifts made on account of marriage and

What
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 Php. 10, 000.

donations are ▫ Gifts made or for the use of Government or any

entity created by any of its agencies which is not

tax exempt?
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, or organization. Provided, however,
that not more than 30% of said gifts shall be used
by such done for administration purposes.
 Gifts made by a Nonresident
Alien
 

What ▫ Gifts made or for the use of Government or any entity

created by any of its agencies which is not conducted

donations are
for profit, or to any political subdivision of the said
Government, and
▫ Gifts in favor of an educational and/ or charitable,

tax exempt?
religious, cultural, or social welfare corporation,
institution, or organization. Provided, however, that
not more than 30% of said gifts shall be used by such
done for administration purposes.
 

  ▫
▫
Ramon Magsaysay Foundation
International Rice Research Institute

EXEMPT ▫
▫
Philippine Inventors Commission
Integrated Bar of the Philippines

DONATIONS
▫ Development Academy of the Philippines
▫ National Museum
▫ National Library

UNDER ▫
▫
Intramuros Administration
Museum of Philippine Costumes

SPECIAL LAW
▫ Philippine- American Cultural Foundation.
 RATES OF TAX PAYABLE BY DONOR UNDER
NIRC/ National Internal Revenue Code

Tax Table for donation to relatives.

 
Donation to stranger:

30% of the net gift

DONORS’ TAX
 CHANGES IN DONORS TAX UNDER TRAIN LAW

▫No more 10,000 exemption on dowry.

▫No more distinction between a relative and a stranger.
▫Exemption of 250,000 on gift.
▫Flat tax rate of 6% based on net gift, regardless of donee.
EXAMPLE:
▫ Mr. AND Mrs. Amigo, citizens and residents of Zamboanga City,
made the following donations of their properties as husband and
wife:

May 20, 2017:

▫ To daughter, Helena, on account of marriage on April 30, 2017,
cash amounting to Php. 500,000.
▫ To Gaspar, brother of Mrs. Amigo, a car amounting to Php.
200,000.
▫ *** Compute the donor’s tax due.
 EXAMPLE:
• Mr. AND Mrs. Amigo, citizens and • QUESTION?
residents of Zamboanga City, made the
following donations of their properties • 1. WHAT IS THE DATE OF
as husband and wife: DONATION ?
• 2. WHAT TAX CODE SHALL
May 20, 2017: BE USED?
• To daughter, Helena, on account of marriage • 3.WHO ARE THE DONORS?
on April 30, 2017, cash amounting to Php. • 4.WHO ARE THE DONEES?
500,000.
• 5. WHAT IS THE
• To Gaspar, brother of Mrs. Amigo, a car
RELATIONSHIP OF THE
amounting to Php. 200,000.
DONOR TO THE DONEES?
• *** Compute the donor’s tax due.
SOLUTION:
▫ MAY 20, 2017 DONATION

    MR. Amigo   Mrs. Amigo

To HELENA(DAUGHTER)- [500,000 / 2 ]   250,000   250,000

To GASPAR – [ 200,000 /2]       100,000

GROSS GIFT   250,000   350,000

LESS: EXEMPTION   (10,000)   (10,000)
NET GIFT   240,000   340,000
         
TAX ON 200,000   2,000    
40,000 X 4%   1,600 3,600  
         
TO GASPAR( STRANGER)- [ 100,000 X 30%]     30,000  

TAX DUE     33,600  

         
TAX ON 200,000       2,000
140,000 X 4%       5,600
TAX DUE       7,600
Mr. AND Mrs. Amigo, citizens and residents of
Zamboanga City, made the following donations of their
properties as husband and wife:

May 20, 2018:

To daughter, Helena, on account of marriage on April

30, 2018, cash amounting to Php. 500,000.
To Gaspar, brother of Mrs. Amigo, a car amounting to
Php. 200,000.

*** Compute the donor’s tax due.

 EXAMPLE:
• Mr. AND Mrs. Amigo, citizens and
residents of Zamboanga City, made the • QUESTION?
following donations of their properties
as husband and wife: • 1. WHAT IS THE DATE OF
THE DONATION?
May 20, 2018: • 2. WHO ARE THE DONORS?
• To daughter, Helena, on account of marriage • 3.WHO ARE THE DONEES?
on April 30, 2018, cash amounting to Php. • 4. WHAT IS THE
500,000. RELATIONSHIP OF THE
• To Gaspar, brother of Mrs. Amigo, a car DONOR TO THE DONEES?
amounting to Php. 200,000.

• *** Compute the donor’s tax due.

SOLUTION:
▫ MAY 20, 2018 DONATION

    MR. Amigo   Mrs. Amigo

To HELENA(DAUGHTER)- [500,000 /   250,000   250,000

2]

To GASPAR – [ 200,000 /2]   100,000   100,000

GROSS GIFT   350,000   350,000

LESS: EXEMPTION   250,000   250,000

NET GIFT   100,000   100,000

X RATE OF DONORS TAX   6%   6%

TAX DUE   6,000   6,000

 
TIME AND PLACE OF FILING

• 30 days after the date the gift is

made
• Donor’s residence at the time of the
transfer.
 THANKS!
Any questions?