Académique Documents
Professionnel Documents
Culture Documents
1.) Occupation
2.) Intellectual creation
3.) Law
4.) Donation
5.) Tradition
6.) Contract
7.) Prescription
8.) Succession
Donors Tax
Donation inter vivos
Donation = is an act of liberality
whereby a person disposes gratuitously
of a thing or right in favor of another,
who accepts it
A. ESTATE TAX
KINDS OF SUCCESSION
ELEMENTS OF SUCCESSION
1.) Decedent
Persons whose properties are transmitted through succession, whether or not he left
a will.
- Testator
= if the decedent left a will.
- Executor
= a person designated in the last will and testament to carry out the
provisions
of the decedents will.
- Administrator
= a person appointed by the court and performs the same duty, in lieu
of an executor.
2.) Inheritance
Includes all the properties, rights and obligations of a person which are not
extinguished by death and all which have accrued thereto since the opening of
PRIMARY COMPULSORY
a. legitimate children and descendants
b. Surviving spouse
c. illegitimate children and descendants
SECONDARY COMPULSORY
d. Legitimate parents and legitimate
ascendants
e. Illegitimate parents
KINDS OF WILLS
1. Notarial/Ordinary/Attested Will
o It must be in writing and executed in a language known to the testator
o It must be subscribed at the end by the testator or by someone in his presence and
by his express direction.
o It must be attested and subscribed by 3 or more credible witnesses in the presence
of the testator and one another.
2. Holographic Will
Written will which must be entirely written, dated and signed by the hand of the
testator himself. It need not to be witnessed.
GROSS ESTATE
DECEDENT/TAXPAYERS
Resident citizen
Nonresident citizen
Resident alien
Nonresident alien
INCLUSIONS IN THE
GROSS ESTATE
1. Decedents
Interest
2. Transfer in the contemplation of death
3. Transfer with retention or reservation of certain rights.
4. Revocable transfers
5. Transfers under a general power of appointment.
6. Transfer for insufficient consideration.
7. Claims against insolvent persons.
8. Proceeds of life insurance.
It must be an insurance on the life of the decedent
The beneficiary must be either of the following:
His estate
His executor or administrator
3rd persons provided that the designation is irrevocable.
PROCEEDS OF LIFE INSURANCE
BENEFICIARY
DESIGNATION
GROSS ESTATE
Estate
Revocable or Irrevocable
Included
Executor
Revocable or Irrevocable
Included
Administrator
Revocable or Irrevocable
Included
3rd party (i.e. wife)
Revocable
Included
rd
3 party
Irrevocable
Excluded
EXCLUSIONS
1. Exclusive property of the surviving spouse
2. Property outside the Philippines of a nonresident alien decedent.
3. Intangible personal property in the Philippines of a nonresident alien under the Reciprocity
Law.
EXEMPTIONS (the ff. shall not be taxed.)
1. The merger of usufruct in the owner of the naked title.
2. The transmission or delivery of the inheritance or legacy by the fiduciary heir(1 st heir) or
legatee to the fideicommisary(2nd heir).
3. The transmission from the first heir, legatee or done in favor of another beneficiary, in
accordance with the desire of the predecessor.
4. All bequests, devises, legacies or transfers to social welfare, cultural and charitable
institutions, no part of the net income of which insures to the benefit of any individual:
Provided, however, that not more than 30% of the said bequests, devises, legacies or
transfers shall be used by such institutions for administration purposes.
VALUATION OF GROSS ESTATE
In general:
Real Property:
B. DONORS TAX
REQUISITES
FORMALITIES
Donation of movable property can be made orally or in
writing.
In writing if the value of the personal property exceeds P 5,000. Otherwise, the
donation shall be VOID.
Donation of immovable property must be made in a public document. Otherwise, the
donation shall be
VOID.
CLASSIFICATION OF DONATION
As to motive or purpose:
1. Simple. The cause is pure liberality.
2. Renumeratory. Donations made due to past services rendered or future services or
charges and burdens.
3. Modal. Consideration is less than the value of the thing donated.
As to time of taking effect:
1. Inter vivos
2. Mortis causa
INCLUSION IN THE GROSS GIFTS
1. Transfer for insufficient consideration (other than real property subjected to the final
capital gains tax)
o The amount by which the FMV of the property at the time of the execution of the
Contract to Sell exceeded the consideration or selling price.
If the transfer is made in the ordinary course of business and free from donative
intent, it shall not be subject to donors tax.
2. Renunciation of inheritance
o Renunciation of the surviving spouse of his/her share in the conjugal or absolute
community after the dissolution of the marriage in favor of the heirs of the
deceased spouse or any other persons.
3. Condonation of Indebtedness.
o
VOID DONATIONS
1. Those made between persons who were guilty of adultery or concubinage at the time of
the donation.
2. Those made between persons found guilty of the same criminal offense, in consideration
thereof.
3. Those made to a public officer or his wife, descendants and ascendants, by reason of his
office.
EXEMPT GIFTS
1. Dowries
o made on account of marriage
o before celebration or within one year thereafter
o by parents to each of their legitime, recognized natural or adopted children
o to the extent of the first P 10,000
2. Gifts in favor of an educational and/or charitable, religious, cultural or social welfare
corporation: Provided, however , that not more than 30% of said gifts shall be used by
such done for administration purposes.
3. Encumbrances on the property donated if assumed by the done in the deed of donation.
4. Donations made to entities as exempted under special laws.
TAX PAYABLE BY DONOR IF DONEE IS A STRANGER
- Subject to 30% of the net gifts.
- Stranger is a person who is not:
o Brother or sister (whether by whole or half-blood), spouse, ancestors and lineal
descedants.
o Relative by consanguinity in the collateral line within the 4 th degree of relationship.
ADMINISTRATIVE PROVISIONS
Accrual Period
ESTATE TAX
On the date of death of the
decedent
Governing Law
BIR Requirements
Notice of death
- gross estate that
exceeds P20,000
- Within 2 mos. after
death
Net estate exempt from tax:
P200,000 and below
- Tax rates: 0% - 20%
Within 6 mos. from death
Extension to file: not more
than 30 days(meritorious
cases)
Pay as you file
DONORS TAX
At the time the gift or
donation is made or
perfected.
Statute in force at the time of
the perfection/completion of
donation.
No notice required
Extension to pay:
- 2 years (extrajudicial)
- 5 years (Judicial)
BUSINESS TAXES
- Are those imposed upon onerous transfers such as sale, barter, exchange and
importation.
- Where the aggregate gross sale or receipts do not exceed P 100,000 during any 12
month period shall not be subject to business taxes.
Services by agricultural contract growers and milling for others of palay into rice, corn into
grits, sugar cane into raw sugar.
Medical, dental, hospital and veterinary services except those rendered by professionals.
o VATABLE: Medicines purchased by patient from the hospitals pharmacy or outside
the hospital or
Doctors fee
o EXEMPT: only if those vatable are included in the hospital bills.
Educational services
Services of employer employee
Services of multinational corporations who act as communications and coordinating
centers.
Those exempt under special laws.
Sales by agricultural cooperatives.
Gross receipts from lending activities by credit or multi-purpose cooperatives.
Non-agricultural, non-electric and non-credit sales of coop if contribution of members does
exceed p 15,000.
Export sales by a non-VAT registered persons
Sale of real properties
o Not held for sale or held for lease
o Value @ P 1,919,500 and below
o House and lot and other residential dwellings at P 3,199,200 and below.
o Low cost housing - ceiling price do not exceed 2M
o Socialized housing - ceiling price do not exceed P 300,000.
Leases of a residential unit with monthly rental not exceeding P 12,800 during the year or
not exceeding P1,919,500 annually.
Sale or importation, printing/publication of books and any newspaper or magazine
Sale or importation of passenger or cargo vessels and aircraft (limited to those of 150 tons
and above)
Importation of fuel, goods and supplies by persons engaged in international shipping or air
transport operations.
Importation of life-saving equipment.
Importation of capital equipment, machinery and spare parts etc.
Services of banks, non-bank financial intermediaries performing quasi banking functions
and other non-bank financial intermediaries.
Sale or lease of goods or properties or the performance of services other than the
transactions mentioned in the preceding paragraphs, the gross annual sales and/or
receipts do not exceed the amount of P 1,500,000.
Vat on purchase of SPECIFIED goods and services by a senior citizen.
Registration not later than 10 days before the beginning of the calendar quarter.
3%
Percentage tax on domestic carriers and keepers of garages (by land).
Percentage tax on international carriers.
Percentage tax on franchises on radio and/or television broadcasting whose gross receipts
do not exceed 10M.
o 2% for gas and water utilities
FOR 10%
- Percentage on overseas dispatch, message, conversation originating in the Philippines.
- Percentage tax on foreign companies
FOR 2%
- Percentage tax on life insurance premiums for companies doing life insurance business in
the Philippines.
AMUSEMENT TAXES
- Racetracks and Jai-alia
30%
- Cockpits, cabarets, night or day clubs
18%
- Professional basketball games 15%
- Boxing exhibitions
10%
TAX ON WINNINGS
- Regular and owner of animal
10%
- Double, quinella and trifecta bets
4%
FILING AND PAYMENT
- Same on VAT but no monthly filing.