CHAPTER II - DONOR'S TAX

·Effective January 1, 2018 and onwards (Republic Act (RA) No. 10963/TRAIN)

Rate - The donor’s tax for each calendar year shall be six percent (6%) computed on the basis of the total gifts
in excess of Two Hundred Fifty Thousand Pesos (P250,000) exempt gift made during the calendar year.

Notes:

1. When the gifts are made during the same calendar year but on different dates, the donor's tax shall be
computed based on the total net gifts during the year.

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 strangers.

Procedures
Who Shall File

The Donor’s Tax Return (BIR Form No. 1800) shall be filed in triplicate by any person, natural or juridical,
resident or non-resident, who transfers or causes to transfer property by gift, whether in trust or otherwise,
whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible.

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).

When and Where to File and Pay

The Donor’s Tax Return (BIR Form No. 1800) shall be filed within thirty (30) days after the date the gift
(donation) is made.

The return shall be filed with any Authorized Agent Bank (AAB) of the Revenue District Office having
jurisdiction over the place of domicile of the donor at the time of the donation, or if there is no legal residence
in the Philippines, with the Office of the Commissioner of Internal Revenue, (Revenue District Office No. 39,
South Quezon City). In case of gifts made by a non-resident alien, the return may be filed with RDO No. 39, or
with the Philippine Embassy or Consulate in the country where he is domiciled at the time of donation.

A separate return shall be filed by each donor for each gift (donation) made on different dates 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 date.

If the gift (donation) involves conjugal/community property, each spouse shall file separate return
corresponding to his/her respective share in the conjugal/community property donated. This rule shall likewise
apply in the case of co-ownership over the property being donated.

When the return is filed with an AAB, taxpayer must accomplish and submit BIR-prescribed 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 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

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teller’s initial. Bank debit memo number and date should be indicated in the return for taxpayers paying under
the bank debit system.

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

For transactions covered by one (1) Deed of Sale/Exchange/Donation involving one (1) to three (3) properties,
the taxpayer can avail of the fast lane pursuant to Revenue Memorandum Circular (RMC) No. 43-2018, as
amended by RMC No. 107-2018. Payments amounting to twenty thousand pesos (P 20,000.00) and below shall
be paid in cash while payments above twenty thousand pesos (P 20,000.00) shall be made through Manager’s
Check or Cashier’s Check to the Revenue Collection Officer of the RDO concerned.

The time of filing and payment vary depending on the law applicable at the time of donation.

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)

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?

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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 exemption under Section 101(A)(2) of the TRAIN Law. (Section
II, RMC No. 53-2013)