Problem no.

I. Mr.P, a Filipino citizen, died in Cebu City on March 2009, leaving the following
properties:

1. Household furnitures and appliances P 150,000

2. Cash in BPI (Savings Account) 75,000

3. Proceeds of life insurance wherein Mrs.X

designated her brother as her revocable

beneficiary 250,000

4. Claims against insolvent persons 30,000

5. Benefits received from her heirs from

GSIS by reason of Mrs. Xs death 100,000

6. Van, being used by Mrs. Xs brother but

Registered under her name 200,000

7. Proceeds of GSIS life insurance 100,000

==========

TOTAL P 905,000

Deductions claimed

1. Funeral Expenses P 100,000

2. Medical expenses 150,000

3. Judicial expenses 20,000

4. Claims against insolvent persons 30,000

==========

TOTAL P 300,000

Compute the net estate and the estate tax due and payable.

ANSWER:

Item no. 5 and item no 7 is not included as they are exemptions under special laws.

Gross Estate:
1. Household furnitures and appliances P 150,000

2. Cash in BPI (Savings Account) 75,000

3. Proceeds of life insurance wherein Mrs.X

designated her brother as her revocable

beneficiary 250,000

4. Claims against insolvent persons 30,000

5. Van, being used by Mrs. Xs brother but

Registered under her name 200,000

==========

TOTAL P 705,000

Deductions

1. Funeral Expenses P 35,250

2. Medical expenses 150,000

3. Judicial expenses 20,000

4. Claims against insolvent persons 30,000

==========

TOTAL P 235,250

Funeral Expenses:

P 705,000 X 5%= P35,250

Gross Estate: 705,000

Less Deductions 235,250

======

Net Estate 469,750

ESTATE TAX COMPUTATION: (SEC. 84. NIRC)

TAXABLE ESTATE: 469,750

200,000 0
269,750 X 5% 13,487.50

=========

ESTATE TAX DUE: 13,487.50

POSTED BY AESSEDAI AT 6:03 PM NO COMMENTS:

PROBLEM NO.1

I. Mr. P, a Filipino citizen, a widower with 2 children, died while having a vacation on
May 2008 in New York City, leaving the following properties:

1. Apartment in New York P 1,500,000

2. House and Lot in San Francisco 2,000,000

3. House and Lot in Dumaguete City 2,000,000

4. Cash in BDO (current account) 500,000

5. Claims against insolvent person 100,000

6. Retirement benefits received by his heirs

From Mr. Ps employer under RA. 4917 700,000

7. ABS-CBN Shares of stocks 500,000

8. Car in Dumaguete City 200,000

9. Proceeds of Life Insurance where Mr. P

Named his friend Mario, as an irrevocable

Beneficiary 300,000

10. Benefits received from SSS by reason of

Mr. Ps death 500,000

=======

TOTAL 8,300,000

Deductions claimed

1. Funeral expenses P 300,000

2. Medical Expenses 650,000

3. Judicial Expenses 100,000

4. Claims against Estate 300,000

5. Claims against insolvent persons 100,000

6. Family Home 1,000,000

7. Benefits received from Mr.Ps employer 700,000

8. Losses from fire that occurred in the house

In Dumaguete City 150,000

=======

TOTAL P 3,300,000

Compute the Net Estate and the estate tax due and payable.

ANSWER :

TAKE NOTE ITEM NO. 9 IS NOT INCLUDED AS IT IS AN EXCLUSION AND ITEM NO. 10,
IS AN EXEMPTION THEREFORE NOT INCLUDIBLE IN THE GROSS ESTATE OF THE
DECEDENT.

1. Apartment in New York P 1,500,000

2. House and Lot in San Francisco 2,000,000

3. House and Lot in Dumaguete City 2,000,000

4. Cash in BDO (current account) 500,000

5. Claims against insolvent person 100,000

6. Retirement benefits received by his heirs

From Mr. Ps employer under RA. 4917 700,000

7. ABS-CBN Shares of stocks 500,000

8. Car in Dumaguete City 200,000

=======

TOTAL 7,500,000
Deductions claimed

1. Funeral expenses P 200,000

2. Medical Expenses 500,000

3. Judicial Expenses 100,000

4. Claims against Estate 300,000

5. Claims against insolvent persons 100,000

6. Family Home 1,000,000

7. Benefits received from Mr.Ps employer 700,000

8. Losses from fire that occurred in the house

In Dumaguete City 150,000

=======

TOTAL P 3,050,000

GROSS ESTATE 7,500,000

LESS DEDUCTIONS 3,050,000

=============

NET ESTATE 4,450,000

ESTATE TAX COMPUTATION: (SEC. 84. NIRC)

TAXABLE ESTATE: 4,450,000

2,000,000 135,000

2,450,000 X 11% 269,500

=========

ESTATE TAX DUE 404,500

 Skip to ContentSkip to FooterSkip to Accessibility InstructionsSkip to HomeSkip to ContentSkip
to ContactSkip to Site Map

Site Map
Accessibility
Contact Us
o BIR Trunkline
o Directory
National Office
Regional Offices
Revenue District Offices
Revenue Data Centers

Search ...

Home
Transparency
o Transparency Seal
BIR Mandate, Vision and Mission
BIR Officials
Annual Financial Reports
Approved Budgets with Targets
Status of Major Projects and Programs
Program/Project Beneficiaries
BIR Annual Procurement Plan & Contracts Awarded
System of Ranking Delivery Units & Individuals
Report Cards
o BIR Organizational Structure
o BIR Annual Reports
o BIR Collection Statistics
o BIR History
o BIR Chronicles

 Donor's Tax

Revenue Issuances
o Revenue Regulations
2017 Revenue Regulations
2016 Revenue Regulations
2015 Revenue Regulations
2014 Revenue Regulations
2013 Revenue Regulations
Previous Years
o Revenue Memorandum Orders
2017 Revenue Memorandum Orders
2016 Revenue Memorandum Orders
2015 Revenue Memorandum Orders
2014 Revenue Memorandum Orders
2013 Revenue Memorandum Orders
Previous Years
o Revenue Memorandum Circulars
2017 Revenue Memorandum Circulars
2016 Revenue Memorandum Circulars
2015 Revenue Memorandum Circulars
2014 Revenue Memorandum Circulars
2013 Revenue Memorandum Circulars
Previous Years
o Revenue Delegation Authority Orders
2017 Revenue Delegation of Authority Orders
2016 Revenue Delegation of Authority Orders
2015 Revenue Delegation Authority Orders
2014 Revenue Delegation Authority Orders
2013 Revenue Delegation Authority Orders
Previous Years
o Revenue Administrative Orders
2017 Revenue Administrative Orders
 2016 Revenue Administrative Orders
2015 Revenue Administrative Orders
2014 Revenue Administrative Orders
2013 Revenue Administrative Order
Previous Years
Registration Requirements
o Primary Registration
Application for TIN
Application for Registration Update
o Secondary Registration
Registration of Book of Accounts
Application for Authority to Print Receipts & Invoices
Application for Authority to Use Computerized Accounting Systems
Application for Permit to Use CRM and/or POS
Tax Information
o Capital Gains Tax
o Documentary Stamp Tax
o Donor's Tax
o Estate Tax
o Income Tax
o Percentage Tax
o Value-Added Tax
o Withholding Tax
o Excise Tax
Rulings and Legal Matters
o Rulings
2017 BIR Rulings
2016 BIR Rulings
2015 BIR Rulings
2014 BIR Rulings
2013 BIR Rulings
Previous Years
o Community Mortgage Program (CMP)
o DOF Review of CIR's Adverse Rulings
o Tax Free Exchanges
o Guide to Philippines Tax Law Research
o Tax Guide on Philippine Taxation
International Tax Matters
o Taxation of Non-Residents
o Taxation of Foreign Source Income
o Taxation of Foreign Governments, Embassies and International Organizations
o Exchange of Information Program
o FATCA
o Transfer Pricing
o Double Tax Agreements
o International Cooperation

o
You are here:
Home
Tax Information
Donor's Tax

Open Data Philippines

Data.Gov.PH
Customs ng Bayan
Full Disclosure Policy
Portal (LGUs)
eServices

Quick Links

Tax Code

BIR Forms

Zonal Values
 List of
Authorized
Agent Banks

Industrial/Occup
ational Code

Penalties

Taxpayer Bill of
Rights

Anti-Corruption
Law

Withholding Tax
Calculator

Archive

Downloadables

BIR Employees Portal

For BIR Employees Use Only

Username

Password

Log in
Index for Donor's Tax:

Description
Tax Form
Documentary Requirements
Tax Rates
Procedures
Deadlines
Related Revenue Issuances
Codal Reference
 Frequently Asked Questions

Description

Donors Tax is a tax on a donation or gift, and is imposed on the gratuitous

transfer of property between two or more persons who are living at the time
of the transfer. It 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.

[return to index]

Tax Form

BIR Form 1800 Donors Tax Return

[return to index]

Documentary Requirements

The following requirements must be submitted upon field or office audit of

the tax case before the Tax Clearance Certificate/Certificate Authorizing
Registration can be released:

1. Deed of Donation

2. Sworn Statement of the relationship of the donor to the donee

3. Proof of tax credit, if applicable

4. Certified true copy(ies) of the Original/Transfer/Condominium Certificate of

Title (front and back) of lot and/or improvement donated, if applicable

5. Certified true copy(ies) of the latest Tax Declaration (front and back pages)
of lot and/or improvement, if applicable

6. Certificate of No Improvement issued by the Assessors office where the

properties have no declared improvement, if applicable
7. Proof of valuation of shares of stocks at the time of donation, if applicable

For listed stocks - newspaper clippings or certification issued by the Stock Exchange as
to the par value per share
For unlisted stocks - Audited Financial Statements duly certified by an independent
certified public accountant with computation of fair market value per share at the time
of donation.
8. Proof of valuation of other types of personal properties, if applicable

9. Proof of claimed deductions, if applicable

10. Copy of Tax Debit Memo used as payment, if applicable

Additional requirements may be requested for presentation during audit of the tax case depending
upon existing audit procedures.

[return to index]

Tax Rates

Effective January 1, 1998 to present (Republic Act No. 8424)

The Tax Shall Of the Excess

Net Gift Over But not Over Plus
be Over

100,000.00 exempt

100,000.00 200,000.00 0 2% 100,000.00

200,000.00 500,000.00 P 2,000.00 4% 200,000.00

500,000.00 1,000,000.00 14,000.00 6% 500,000.00

1,000,000.00 3,000,000.00 44,000.00 8% 1,000,000.00

3,000,000.00 5,000,000.00 204,000.00 10% 3,000,000.00

5,000,000.00 10,000,000.00 404,000.00 12% 5,000,000.00

10,000,000.00 and over 1,004,000.00 15% 10,000,000.00

Notes:
1. Rate applicable shall be based on the law prevailing at the time of
donation.

2. 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.

Donation made to a stranger is subject to 30% of the net gift. A stranger is a

person who is not a:

brother, sister (whether by whole or half blood), spouse, ancestor
and lineal descendants; or
relative by consanguinity in the collateral line within the fourth
degree of relationship.

Effective July 28, 1992 to December 31, 1997 (Republic Act No.
7499)

The Tax Shall Of the Excess

Net Gift Over But not Over Plus
be Over

50,000.00 exempt

50,000.00 100,000.00 1.5% 50,000.00

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

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

3,000,000.00 5,000,000.00 258,750.00 15% 3,000,000.00

5,000,000.00 and over 558,750.00 20% 5,000,000.00

Donation made to a stranger is subject to 10% of the net gift. A stranger is a

person who is not a:

 brother, sister (whether by whole or half blood), spouse, ancestor and
lineal descendants; or
relative by consanguinity in the collateral line within the fourth degree
of relationship.

Effective January 16, 1981 to July 27, 1992 (Presidential Decree No.
1773)

The Tax Shall Of the Excess

Net Gift Over But not Over Plus
be Over

1,000.00 exempt

1,000.00 50,000.00 1.5% 1,000.00

50,000.00 75,000.00 P 735.00 2.5% 50,000.00

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

150,000.00 200,000.00 5,110.00 9% 150,000.00

200,000.00 300,000.00 9,610.00 12% 200,000.00

300,000.00 400,000.00 21,610.00 15% 300,000.00

400,000.00 500,000.00 36,610.00 18% 400,000.00

500,000.00 625,000.00 54,610.00 21% 500,000.00

625,000.00 750,000.00 80,860.00 24% 625,000.00

750,000.00 875,000.00 110,860.00 28% 750,000.00

875,000.00 1,000,000.00 145,860.00 32% 875,000.00

1,000,000.00 2,000,000.00 185,860.00 36% 1,000,000.00

2,000,000.00 3,000,000.00 545,860.00 38% 2,000,000.00

3,000,000.00 925,860.00 40% 3,000,000.00

Donation made to a stranger shall be either the amount computed in
accordance with the preceding schedule or twenty percent (20%) of the net
gifts, whichever is higher. A stranger is a person who is not a:

brother, sister (whether by whole or half blood), spouse, ancestor and
lineal descendant; or
relative by consanguinity in the collateral line within the fourth degree
of relationship.

Please note that the donors tax rates will vary depending on the law
applicable at the time of the gift. The pertinent laws are as follow:

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
Presidential Decree No. 69 effective January 1, 1973 to January 15,
1981
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 present
[return to index]

Procedures

File the return in triplicate (two copies for the BIR and one copy for the
taxpayer) with any Authorized Agent Bank (AAB) of the RDO having
jurisdiction over the place of the domicile of the donor at the time of the
transfer. In places where there are no AAB, the return will be filed directly
with the Revenue Collection Officer or duly Authorized City or Municipal
Treasurer where the donor was domiciled at the time of the transfer, or if
there is no legal residence in the Philippines, with Revenue District No. 39 -
South Quezon City.

In the case of gifts made by a non-resident alien, the return may be filed with
Revenue District No. 39 - South Quezon City, or with the Philippine Embassy
or Consulate in the country where donor is domiciled at the time of the
transfer.

Submit all documentary requirements and proof of payment to the Revenue

District Office having jurisdiction over the place of residence of the donor.

One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of their tax
returns. They may opt to submit their tax returns manually using the eBIRForms Offline Package in
the RDO having jurisdiction over the place of the domicile of the donor at the time of the transfer or
electronically through the use of the Online eBIRForms System. (Sec. 3(2) RR No. 6-2014)

Please note that the time of filing and payment will vary depending on the
law applicable at the time of gift.

[return to index]

Deadlines

Within thirty days (30) after the date the gift (donation) is made. A separate
return will be filed for each gift (donation) made on the different dates during
the year reflecting therein any previous net gifts made during the same
calendar year.

If the gift (donation) involves conjugal/community/property, each spouse will

file separate returns corresponding to his/ her respective share in the
conjugal/community property. This rule will also apply in the case of co-
ownership over the property.

[return to index]

Related Revenue Issuances

Revenue Regulations Nos. 2-2003, 6-2013, 6-2014

Revenue Memorandum Circular Nos. 63-2009 and 53-2013

[return to index]
Codal Reference

Sec. 98 to Sec. 104 of the National Internal Revenue Code

Related Laws

Republic Act Nos. 579, 3062, 3676, 3850, 6110, 7499, 8424, 9159, 9275,
9500, 9647, 10066, 10072, 10073, 10083, 10174, 10390, 10618

Presidential Decree Nos. 69, 181, 205, 292, 294, 1773

Executive Order No. 419

Commonwealth Act No. 466

[return to index]

Frequently Asked Questions

1. Who are required to file the Donors Tax Return?

Every person, whether 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.

2. What donations are tax exempt?

A. In the Case of Gifts made by a Resident (Sec. 101 (A), NIRC as amended)

Dowries or donations made on account of marriage 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 P10,000
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
Gifts in favor of an educational and/or charitable, religious, cultural or
social welfare corporation, institution, accredited non-government
organization, trust or philantrophic organization or research institution
 or organization, provided not more than 30% of said gifts will be used
by such donee for administration purposes
B. In the Case of Gifts Made by a Nonresident not a Citizen of the
Philippines (Sec. 101 (B), NIRC as amended)

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
Gifts in favor of an educational and/or charitable, religious, cultural or
social welfare corporation, institution, accredited non-government
organization, trust or philantrophic organization or research institution
or organization, provided not more than 30% of said gifts will be used
by such donee for administration purposes
C. Tax Credit for Donor's Taxes Paid to a Foreign Country (Sec. 101 (C), NIRC
as amended)

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.
Limitations on Credit. - The amount of the credit taken under this
Section shall be subject to each of the following limitations:
- 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
- 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.

3. What are the bases in the valuation of property?

If the gift is made in property, the fair market value at that time will be
considered the amount of gift.

In case of real property, the taxable base is the fair market value as
determined by the Commissioner of Internal Revenue (Zonal Value) or fair
market value as shown in the latest schedule of values fixed by the provincial
and city assessor (MV per Tax Declaration), whichever is higher. (Sec. 88 and
102, NIRC as amended)
If there is no zonal value, the taxable base is the fair market value that
appears in the tax declaration at the time of the gift

4. For purposes of Donors Tax, what does the term Net Gift mean?

For purposes of the donors 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. 11, RR No. 2-2003)

5. Under R.A. No. 7166, any contribution in cash or in kind to any candidate
or political party or coalition of parties for campaign purposes shall not be
subject to the payment of any gift tax. What instance will it be subject to
Donors Tax?

Those contributions in cash or in kind NOT duly reported to the Commission

on Elections (COMELEC) shall not be subject to donors tax.

Section 99 (C) of the Tax Code, as amended, provides that any contribution
in cash or in kind for campaign purposes shall be governed by R.A. No. 7166
or the Election Code.

Section 13 of the R.A. No. 7166 specifically states that any provision of law to
the contrary notwithstanding any contribution in cash or kind to any
candidate or political party or coalition of parties for campaign purposes,
duly reported to the Commission shall not be subject to the payment of any
gift tax (donors tax). Accordingly, the BIR can impose donors tax on
contributions of this nature. (Q-14, RMC No. 63-2009)

6. For purposes of Donors 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)

7. For purposes of Donors 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)

8. Are gratuitous donations to Homeowners Associations subject to Donors

Tax?

Gifts, donations, and other contributions received by the Homeowners

Associations (Associations) are subject to the payment of donors tax
pursuant to Section 98 and 99 of the Tax Code, as amended. Endowment or
gifts received by such associations are not exempt from donors tax
considering that gifts to Associations are not qualified for exemption under
Section 101(A)(3) of the Tax Code. (II, RMC No. 53-2013)

9. Is an onerous donation or donation in exchange for goods, services or use

or lease of properties to Homeowners Association subject to Donors 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. (III, RMC No. 53-2013)

10. 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 adequate and full
consideration in money or moneys worth, then the amount by which the fair
market value of the property exceeded the value of the consideration shall,
for the purpose of Donors Tax, be deemed a gift, and shall be included in
computing the amount of gifts made during the calendar year. (Sec. 100,
NIRC, as amended)

11. What entities are considered exempted from Donors Tax under special
laws?
The list below consists of entities considered Donors Tax exempt under
special laws including, but not limited to the following:

Rural Farm School (Sec. 14, R.A. No. 10618)
Peoples Television Network, Incorporated (Sec. 15, R.A. No. 10390)
Peoples 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)
12. How do we determine the fair market value of the unlisted stocks?

In determining the value of the shares, the Adjusted Net Asset Method shall
be used whereby all assets and liabilities are adjusted to fair market values.
The net of adjusted asset minus the adjusted liability value is the indicated
value of the equity.

For purposes of this item, the appraised value of real property at the time of
sale shall be the highest among the following:

(a) The fair market value as determined by the Commissioner, or

(b) The fair market value as shown in the schedule of values fixed by
the Provincial and City Assessors, or

(c) The fair market value as determined by Independent Appraiser. (RR NO.
6-2013) (Annex U)