Donors Tax 3.

Gifts in favor of an educational and/or charitable or religious, cultural, or social welfare

Donors tax tax imposed on the transfer gratuitously of property between two or more living persons at the time of
transfer.
Kinds of donation
Inter vivos one made between living persons which is perfected from the moment the donor knows
of the acceptance. Subject to donors tax.
Mortis causa one that takes effect upon the death of the donor partakes the nature of testamentary
disposition. Subject to estate tax and governed by laws on succession.
Purposes
To supplement the estate taxes by preventing their avoidance through the taxation of gifts inter vivos,
without which, the property would be subject to said taxes.
To prevent avoidance of income taxes through the device of splitting income among numerous donees
thereby escaping the effect of progressive rate taxation.
corporation, institution subject to the condition that not more than 30% of said gifts shall be
used by the done for administration purposes.
Gifts made by NRA (only 1& 2)
Specific exemption of P100K. imposed DT on net gifts exceeding P100K. exmpt P100K or less.
Other deductions
Encumbrance on the property donated if assumed by the donee.
Those specifically provided by the done as a diminution from the property donated.
Political contribution exempted provided that there must be a report to be submitted to the COMELEC.
- Unutilized/ excess campaign funds are subject to income tax.
Donation to stranger 30 % of the net gifts.
Stranger/s not:

Donors Tax vs Estate Tax - Brother or sister, spouse, ancestor and lineal descendant.
- Relative by consanguinity in the collateral line within 4th civil degree.
Donors Estate
Imposed on donations inter vivos Transfer in the nature of testamentary disposition Valuation
Lower rates Higher rates
100K exemption 200K Real property current fair market value as determined by a provincial or city assessor or CIR, whichever is higher.

Personal property FMV at the time of the gift is considered the amount of the gift.
Nature
Filing: within 30 days after the date the gift is made or completed.
Privilege tax imposed on donor to give, done to receive.
Imposition does not rest upon general ownership. The tax due thereon shall be paid at the time of filing.

Requisites of taxable gift (donors tax)

Capacity of the donor;

Donative intent of the donor to make gift;
Delivery of the subject matter of the gift;
Acceptance of the gift by donee.

Classification

Resident/ citizen (RC, NRC, RA) WITHIN / WITHOUT

1. Real property
2. Tangible personal property
3. Intangible personal property
Non-resident alien WITHIN
1. Real property
2. Tangible personal property
3. Intangible personal property ( Ee: Reciprocity)

Governing law: Law at the time the donation was made.

Exemptions:

Gifts made by resident:

1. Dowries or gifts made on account of marriage and before its celebration or within one (1)
year thereafter by parents to each of their legitimate, recognized natural or adopted children
to the extent of first P10K.
2. Gifts made to or for the use of the National Government or of its entities.