NATURE OF DONORS TAX ESSENTIALS OF A TAXABLE GIFT

It is a tax on the privilege of the donor to give; KEY: CF DAD

it is not a tax on property as such because the 1. C apacity of the donor
imposition does not rest upon general ownership. 2. F ormal Requisites
Donors tax 3. D onative intent (not required in indirect gift)
4. A cceptance of the gift by the donee.
5. D elivery

FORMAL REQUISITES FORMAT OF COMPUTATION

CLASSIFICATION OF DONORS FIRST DONATION OF THE YEAR
PERSONAL PROPERTY REAL
PROPERTY 1) Citizen or Resident Gross Gift PXXX
Amount of P5,000 or less More than Regardless a. RC Less: Exemptions/Deductions (XXX)
donation P5,000 of amount b. NRC Net Gift PXXX
Form of Donation Oral or in In writing, In public c. RA Multiply: Rate XX%
writing otherwise instrument, 2) Non-resident Alien (NRA)
VOID otherwise Donors Tax PXXX
a. With reciprocity
VOID Less: Tax Credit (XXX)
b. Without reciprocity
Additional Oral donation None None
Donors Tax Due/Payable PXXX
Requirement requires
simultaneous
delivery
FORMAT OF COMPUTATION
SECOND AND SUBSEQUENT DONATION WITHIN THE YEAR GROSS GIFT REPUDIATION OF INHERITANCE

Gross Gift, Current PXXX The following are the transfers subject to donors tax: REQUISITES:
Less: Exemptions/Deductions, Current (XXX) 1. Specifically and categorically done in favor of
Net Gift, Current PXXX 1. Direct gift; identified heirs; and
Add: Prior Net Gift XXX 2. Gift through creation of a trust; 2. To the exclusion or disadvantage of other co-
Aggregate Net Gift PXXX 3. Condonation of debt; heirs.
Multiply: Rate XX% 4. Repudiation of inheritance in certain cases;
Donors Tax PXXX
5. Transfers for insufficient consideration.
Tax Paid Prior Gift (XXX)
Tax Credit (XXX)
Donors Tax Due/Payable PXXX

TRANSFER FOR INSUFFICIENT CONSIDERATION TRANSFER FOR INSUFFICIENT CONSIDERATION GIFT OF COMMON PROPERTY

REQUISITES: Amount Taxable: In case of donation of common property of the

1. Fair market value (FMV) of the property sold is FMV at the time of transfer PXXX spouses, they will be considered as separate donors.
higher than the selling price; Selling Price (XXX) Each will declare of the said property.
2. Transfer happened during lifetime, in form and in Taxable Gift PXXX
substance;
3. The property sold is NOT a real property classified as
capital asset.
 GIFT BETWEEN HUSBAND AND WIFE COMPONENTS OF GROSS GIFT EXEMPTIONS OR DEDUCTIONS

GENERAL RULE - The donation is VOID. 1. Dowry;

RP TPP IPP 2. Gifts to the Government;
Donor w/in w/o w/in w/o w/in w/o 3. Gifts to educational, charitable, religious
EXCEPTION - Moderate donations on account of family RC/NRC/RA corporation etc.;
celebration or rejoicing. 4. Encumbrances on the property donated
NRA w/o R X X X
assumed by the donee;
NRA w/ R X X X X 5. Diminution of gift provided by the donor;
6. Exemption under Special Laws.

DOWRY GIFTS TO EDUCATIONAL, CHARITABLE, RELIGIOUS CORP, GIFTS TO EDUCATIONAL, CHARITABLE, RELIGIOUS CORP,
REQUISITES: ETC. ETC.
1. Gift made on account of marriage; REQUISITES:
2. Given before its celebration or within 1 year 1) Gifts in favor of the following entities: (CARTERS) REQUISITES:
thereafter; a. Charitable 2) Not more than 30% of the gift shall be used for
3. Given to legitimate, recognized natural or adopted b. Cultural administration purposes;
children; c. Accredited non-government organization; 3) Incorporated as non-stock entity;
4. Amount of exemption is P10,000 per donor per child. d. Religious 4) Paying no dividends;
e. Trust or Philanthropic organization; 5) Governed by trustees who receive no
f. Educational compensation;
g. Research institution or organization; 6) Devoting all its income to the accomplishment
h. Social welfare of its purposes enumerated in its AOI.

RULE ON DEDUCTIBILITY BASED ON CITIZENSHIP AND

RESIDENCY RATE STRANGER DEFINED
Exemption or deduction RC/NRC NRA
/RA A stranger is a person who is NOT:
1. Brother or Sister (whether whole or half blood)
Dowry X RELATIVE
2. Spouse;
GRADUATED RATE 3. Ancestor;
Gifts to the Government 4. Lineal descendant;
5. Relative by consanguinity in the collateral line
Gifts to educational, charitable, religious
within 4th civil degree of relationship.
etc.

Encumbrances on gift assumed by donee STRANGER

30%
Diminution of gift provided by donor

DONORS TAX RETURN

DEADLINE?
- Within 30 days from the date of donation;
IS THERE AN ALLOWED EXTENSION? THE END
- There is no extension allowed; T H A N K Y O U ! ! !
WHEN SHOULD THE TAX BE PAID?
- Upon filing of the return (pay as you file)