CHAPTER II - DONOR'S TAX

SEC. 98. Imposition of Tax. - 

 
(A)  There shall be levied, assessed,
collected and paid upon the transfer by
any person, resident or nonresident, of
the property by gift, a tax, computed as
provided in Section 99.
(B)  The tax 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. 
 
SEC. 99. Rates of Tax Payable by
Donor. - 
 
(A)  In General. - The tax for each
calendar year shall be computed on the
basis of the total net gifts made during the
calendar year in accordance with the
following schedule:
If the net gift is:
 
Over But Not The Tax Plu Of the
  Over Shall be s Excess
  Over
 
  P Exempt    
100,000
P 200,000 0 2% P100,00
100,000 0
200,000 500,000 2,000 4% 200,000
500,000 1,000,00 14,000 6% 500,000
0
1,000,00 3,000,00 44,000 8% 1,000,00
0 0 0
3,000,00 5,000,00 204,00 10 3,000,00
0 0 0 % 0
5,000,00 10,000,0 404,00 12 5,000,00
0 00 0 % 0
10,000,0   1,004,0 15 10,000,0
00 00 % 00
  
  
(B)  Tax Payable by Donor if Donee is a
Stranger. - When the donee or beneficiary
is stranger, the tax payable by the donor
shall be thirty percent (30%) of the net
gifts. For the purpose of this tax, a
'stranger,' is a person who is not a:
(1)  Brother, sister (whether by whole
or half-blood), spouse, ancestor and
lineal descendant; or
(2)  Relative by consanguinity in the
collateral line within the fourth degree of
relationship.
  
(C)  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. 
 
 
 
SEC. 100. Transfer for Less Than
Adequate and full Consideration. -
Where property, other than real property
referred to in Section 24(D), 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, be
deemed a gift, and shall be included in
computing the amount of gifts made during
the calendar year.
 
SEC. 101. Exemption of Certain Gifts. -
The following gifts or donations shall be
exempt from the tax provided for in this
Chapter: 
 
(A)  In the Case of Gifts Made by a
Resident. -
(1)  Dowries or gifts made on
account of marriage and 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 Ten thousand pesos (P10,000):
(2)  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; and 
  
(3)  Gifts in favor of an educational
and/or charitable, religious, cultural
or social welfare corporation,
institution, accredited
nongovernment organization, trust
or philanthrophic organization or
research institution or organization:
Provided, however, That not more
than thirty percent (30%) of said
gifts shall be used by such donee for
administration purposes. For the
purpose of the exemption, a 'non-
profit educational and/or charitable
corporation, institution, accredited
nongovernment organization, trust
or philanthrophic organization and/or
research institution or organization'
is a school, college or university
and/or charitable corporation,
accredited nongovernment
organization, trust or philanthrophic
organization and/or research
institution or organization,
incorporated as a nonstock entity,
paying no dividends, governed by
trustees who receive no
compensation, and devoting all its
income, whether students' fees or
gifts, donation, subsidies or other
forms of philanthrophy, to the
accomplishment and promotion of
the purposes enumerated in its
Articles of Incorporation. 
 
 (B)  In the Case of Gifts Made by a
Nonresident not a Citizen of the
Philippines. -
(1)  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.
(2)  Gifts in favor of an educational
and/or charitable, religious, cultural
or social welfare corporation,
institution, foundation, trust or
philanthrophic organization or
research institution or organization:
Provided, however, That not more
than thirty percent (30% of said gifts
shall be used by such donee for
administration purposes.
 
(C)  Tax Credit for Donor's Taxes
Paid to a Foreign Country. -
(1)  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.
  
(2)  Limitations on Credit. - The
amount of the credit taken under
this Section shall be subject to each
of the following limitations: 
 
(a)  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
(b)  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.
 
SEC. 102. Valuation of Gifts Made in
Property. - If the gift is made in property,
the fair market value thereof at the time of
the gift shall be considered the amount of
the gift. In case of real property, the
provisions of Section 88(B) shall apply to
the valuation thereof.
 
SEC. 103. Filing of Return and Payment
of Tax. - 
 
(A)  Requirements. - any individual
who makes any transfer by gift (except
those which, under Section 101, are
exempt from the tax provided for in this
Chapter) shall, for the purpose of the
said tax, make a return under oath in
duplicate. The return shall se forth:
(1)  Each gift made during the
calendar year which is to be included
in computing net gifts;
(2)  The deductions claimed and
allowable;
(3)  Any previous net gifts made
during the same calendar year;
(4)  The name of the donee; and
(5)  Such further information as may
be required by rules and regulations
made pursuant to law. 
 
(B)  Time and Place of Filing and
Payment. - The return of the donor
required in this Section shall be filed
within thirty (30) days after the date the
gift is made and the tax due thereon
shall be paid at the time of filing. Except
in cases where the Commissioner
otherwise permits, the return shall be
 filed and the tax paid to an authorized
agent bank, the Revenue District
Officer, Revenue Collection Officer or
duly authorized Treasurer of the city or
municipality where the donor was
domiciled at the time of the transfer, or
if there be no legal residence in the
Philippines, with the Office of the
Commissioner. In the case of gifts made
by a nonresident, 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.
 
SEC. 104. Definitions. - For purposes of
this Title, the terms 'gross estate' and 'gifts'
include real and personal property, whether
tangible or intangible, or mixed, wherever
situated: Provided, however, That where
the decedent or donor was a nonresident
alien at the time of his death or donation,
as the case may be, his real and personal
property so transferred but which are
situated outside the Philippines shall not be
included as part of his'gross
estate' or 'gross gift': Provided, further,
That franchise which must be exercised in
the Philippines; shares, obligations or
bonds issued by any corporation or
sociedad anonima organized or constituted
in the Philippines in accordance with its
laws; shares, obligations or bonds by any
foreign corporation eighty-five percent
(85%) of the business of which is located in
the Philippines; shares, obligations or
bonds issued by any foreign corporation if
such shares, obligations or bonds have
acquired a business situs in the Philippines;
shares or rights in any partnership,
business or industry established in the
Philippines, shall be considered as situated
in the Philippines: Provided, still further,
that no tax shall be collected under this
Title in respect of intangible personal
property: (a) if the decedent at the time of
his death or the donor at the time of the
donation was a citizen and resident of a
foreign country which at the time of his
death or donation did not impose a transfer
tax of any character, in respect of
intangible personal property of citizens of
the Philippines not residing in that foreign
country, or (b) if the laws of the foreign
country of which the decedent or donor was
a citizen and resident at the time of his
death or donation allows a similar
exemption from transfer or death taxes of
every character or description in respect of
intangible personal property owned by
citizens of the Philippines not residing in
that foreign country.
The term 'deficiency' means: (a) the
amount by which tax imposed by this
Chapter exceeds the amount shown as the
tax by the donor upon his return; but the
amount so shown on the return shall first
be increased by the amount previously
assessed (or Collected without assessment)
as a deficiency, and decreased by the
amounts previously abated, refunded or
otherwise repaid in respect of such tax, or
(b) if no amount is shown as the tax by the
donor, then the amount by which the tax
exceeds the amounts previously assessed,
(or collected without assessment) as a
deficiency, but such amounts previously
assessed, or collected without assessment,
shall first be decreased by the amount
previously abated, refunded or otherwise
repaid in respect of such tax.