Donor's Tax Calculation Principles

Donor's Tax

• Imposed on annual net gifts, calculated on a calendar-year basis.
• Tax paid within 30 days of each donation.
• Net gift represents the net economic benefit transferred to the donee.

Donor's Tax Calculation Model

• Net gift value
• Less: Exempt donations
• Net gifts subject to tax (multiplied by 6%) = Donor's tax to date
• Less: Tax due from prior donations = Donor's tax still due

Valuation of Net Gifts: Valuation Rules

• Real Property: Higher of zonal value or assessor's value.
• Personal Property:
  • Shares of Stocks: Listed – average of high and low prices on donation date; Unlisted – par value (preferred), book value (common).
  • Other Properties: Newly purchased – purchase price; Old items – secondhand value; Monetary claims – contract amount.

Valuation of Net Gifts: Timing

• Gifts valued at the date of donation completion/perfection (acceptance by donee).
• Conditional donations: Perfected upon donee fulfilling conditions or donor waiving them.

Valuation of Net Gifts: Common Properties

• Husband and wife are separate taxpayers for donor's tax.
• Donation of conjugal property: Each spouse is considered to have donated half.
• Separate returns required for each spouse.

Valuation of Net Gifts: Encumbrances

• Encumbrances assumed by the donee reduce the gift's value.
• These are deductible as they're not considered gratuitous.

Donor's Tax Return (BIR Form 1800)

• Separate return for each donation date within the year.
• Single return for donations on the same day, even to multiple donees.
• Deadline: 30 days after donation.
• Triplicate copies required.
• Includes: Each gift, deductions, prior gifts, donee name, additional CIR-required info.

Filing Donor's Tax Return

• Authorized Agent Bank
• Revenue District Office
• Revenue Collection Officer
• City/Municipality Treasurer (donor's domicile)
• Commissioner's Office (if donor has no Philippine residence)

Foreign Tax Credit

• One Foreign Country: (Foreign Country Net Gifts / World Net Gifts) * Philippine Donor's Tax Due
• Multiple Foreign Countries: (Total Foreign Country Net Gifts / World Net Gifts) * Philippine Donor's Tax Due
• Credit limited to residents or citizens.