Donor's Tax 2019 PDF

DEPARTMENT OF ACCOUNTANCY HOLY ANGEL UNIVERSITY DONOR’S TAX DONOR’S TAX - is imposed on annual net gifts reckoned over a calendar year basis. For every taxable donation, the donor shall determine and report his/her net gift. The tax paid within 30 days after every...

DEPARTMENT OF ACCOUNTANCY HOLY ANGEL UNIVERSITY DONOR’S TAX DONOR’S TAX - is imposed on annual net gifts reckoned over a calendar year basis. For every taxable donation, the donor shall determine and report his/her net gift. The tax paid within 30 days after every donation. Net gift – net economic benefit transferred to the done  DONOR’S TAX MODEL Net gift xxx Less: Exempt donations (xxx) Net gifts subject to tax xxx Multiply by 6% Donor’s tax to date xxx Less: Tax due in prior donation (xxx) Donor’s tax still due xxx VALUATION OF NET GIFTS a. Valuation Rules 1. Real Property – zonal value or assessor’s value whichever is higher 2. Personal Properties i. Shares of stocks  If listed – average high and low price of the stocks at the date of donation  If unlisted – par value for preferred stocks; book value for common stocks ii. Other Properties  Newly purchased – purchase price  Old items – second hand value  Monetary Claims – amount fixed on the contract VALUATION OF NET GIFTS b. Timing of valuation of gift – gifts are valued at the date of completion or perfection of the donation. Donation is perfected upon acceptance by the done. In conditional donations, the donation is completed and perfected upon satisfaction by the done of the terms of donation or upon waiver by the donor of the conditions. VALUATION OF NET GIFTS c. Donation of common properties – husband and wife are separate and distinct taxpayers for purposes of donor’s tax. Donation of conjugal property by the spouses is deemed 1⁄2 made by the husband and the other half made. The husband and wife shall file separate donor’s tax returns for the donation. VALUATION OF NET GIFTS d. Encumbrances on the properties assumed by the done – obligations on the donated property which are assumed by the done are diminutions to the gratuity accruing to the done. These are onerous assignments of debt and are not gratuity; hence, these are deductible from the value of the donation. DONOR’S TAX RETURN Form: BIR Form 1800. Separate return is required for donations made at different dates during the year reflecting therein any previous net gift made in the same year. Only one return is required for donations made on at a single day even if made to several donees. Deadline: Within 30 days after donation is made Number of copies: Triplicate Content of Donor’s Tax return: 1. Each gift made during the calendar year which is to be included in computing net gifts 2. The deductions claimed and allowable 3. Any previous gift made during the same calendar year 4. The name of the done 5. Such further information as the CIR may require  Where to File the Donor’s Tax Return? 1. Authorized Agent Bank 2. Revenue District Office 3. Revenue Collection Officer 4. Duly Authorized Treasurer of the City or Municipality where the donor is domiciled 5. Office of the Commissioner, if the taxpayer has no legal residence in the Philippines FOREIGN TAX CREDIT A. One Foreign Country 𝐹𝑜𝑟𝑒𝑖𝑔𝑛 𝐶𝑜𝑢𝑛𝑡𝑟𝑦 𝑁𝑒𝑡 𝐺𝑖𝑓𝑡𝑠 𝑥 𝑃ℎ𝑖𝑙𝑖𝑝𝑝𝑖𝑛𝑒 𝐷𝑜𝑛𝑜𝑟 ′ 𝑠 𝑇𝑎𝑥 𝐷𝑢𝑒 𝑊𝑜𝑟𝑙𝑑 𝑁𝑒𝑡 𝐺𝑖𝑓𝑡𝑠 B. Multiple Foreign Country 𝑇𝑜𝑡𝑎𝑙 𝐹𝑜𝑟𝑒𝑖𝑔𝑛 𝐶𝑜𝑢𝑛𝑡𝑟𝑦 𝑁𝑒𝑡 𝐺𝑖𝑓𝑡𝑠 𝑥 𝑃ℎ𝑖𝑙𝑖𝑝𝑝𝑖𝑛𝑒 𝐷𝑜𝑛𝑜𝑟 ′ 𝑠 𝑇𝑎𝑥 𝐷𝑢𝑒 𝑊𝑜𝑟𝑙𝑑 𝑁𝑒𝑡 𝐺𝑖𝑓𝑡𝑠 Tax Credit is limited to residents or citizens Reference Business and Transfer Taxation 2019 edition by Rex Banggawan