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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Under the National Internal Revenue Code (NIRC) of the Philippines, any person – natural or juridical, and resident or non-resident – who transfers or causes to transfer property by gift must pay the donor’s tax. The donor’s tax is paid upon filing of the Donor’s Tafx Return, which must be made within 30 days after the date when the gift was made or completed.
What is Donor’s Tax?
Under the National Internal Revenue Code (NIRC) of the Philippines, a tax is imposed upon the transfer by any person of any property by way of gift or donation during the life of the donor. (Sec. 98(A), NIRC)
When does Donor’s Tax apply?
Donor’s Tax does not apply unless and until there is a completed gift.
In other words, donor’s tax applies when the donor knows that the donee has accepted his or her gift. As clarified by Revenue Regulation (RR) No. 12-2018, donation or the transfer by way of gift is completed by delivery, either actually or constructively, of the donated property, to the donee.
Note, that the law in force at the time of the perfection or completion of the donation will govern the imposition of the donor’s tax
(Sec. 12, RR No. 12-2018)
Who pays Donor’s Tax?
Generally, any person who transfers or causes to transfer property by gift must pay the donor’s tax.
Under the law, “person” may mean a natural person or a juridical person, and may be a resident or non-resident of the Philippines.
(Sec. 98, NIRC)
How does one pay Donor’s Tax?
Under the National Internal Revenue Code (NIRC), the donor’s tax is paid upon filing of the Donor’s Tax Return (BIR Form No. 1800) – or upon a “pay-as-you-file” mode.
(Sec. 103(B), NIRC)
When is the Donor’s Tax Return filed?
The donor’s tax return must be filed within 30 days after the date when the gift was made or completed. The tax due thereon shall be paid at the same time that the return is filed (pay-as-you-file).
(Sec. 103(B), NIRC)
Where is the Donor’s Tax Return filed?
Guide for Residents
Unless the Commission on Internal Revenue (CIR) permits otherwise, the return shall be filed, and the tax paid to:
- Authorized Agent Banks;
- Revenue District Office through Revenue Collection Officer;
- Duly authorized city or municipal treasurer where the donor was domiciled at the time of the transfer;
- Authorized tax software provider.
(Sec. 103(B), NIRC; Sec. 15, R.A. No. 11976)
Guide for Non-Residents
The return shall be filed, and the tax paid to:
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 (i.e., Revenue District Office No. 39 – South QC)
(Sec. 103(B), NIRC; Sec. 15(B), RR No. 12- 2018)
Electronic of Manual Payment
Under the Ease of Paying Taxes (EOPT) Act (R.A. No. 11976), which amended Section 103 (B) of the NIRC effective January 22, 2024, except in cases where the Commissioner otherwise permits:
The return shall be filed and the tax paid, either electronically or manually, to any authorized agent bank, Revenue District Office through Revenue Collection Officer, or authorized tax software provider.
(Sec. 15, R.A. No. 11976)
RELATED ARTICLES:
- What donations are taxable? | Alburo Law Offices
- Tax Deficiency vs. Tax Delinquency – ALBURO ALBURO AND ASSOCIATES LAW OFFICES
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
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