In the Philippines, generosity has tax consequences. Whether you're gifting cash to a family member, donating property to a friend, or supporting a charitable cause, you may be subject to Donor’s Tax—a government levy on the value of donations or gifts.
To help you stay compliant and avoid unexpected tax bills, this guide covers what Donor’s Tax is, when it applies, who’s exempt, and how to file it properly.
What is Donor’s Tax?
Donor’s Tax is a tax imposed on the gratuitous transfer of property or money from one person to another, without receiving anything of equal value in return. The tax is paid by the donor (the giver), not the recipient.
This applies to both:
Gifts made during the donor’s lifetime
Transfers in kind or in cash, whether direct or indirect
When is Donor’s Tax Applicable?
You are subject to Donor’s Tax if:
You give property or money to another person
The donation is voluntary and without compensation
The value exceeds ₱250,000 per calendar year
This includes:
Giving a car or real estate to your child
Donating cash to a friend
Transferring shares of stock as a gift
Current Donor’s Tax Rate (TRAIN Law)
As of 2018 under the TRAIN Law (RA 10963):
Rate: 6% on donations exceeding ₱250,000 per year
Exemption: The first ₱250,000 of total donations per calendar year is exempt
Applies to both relatives and strangers (same rate)
Example:
Total gifts given in 2025: ₱1,000,000
Less ₱250,000 exemption
Taxable amount: ₱750,000
Donor’s Tax = ₱750,000 × 6% = ₱45,000
What is Considered a Donation?
The following can be subject to Donor’s Tax:
Cash gifts
Transfer of real estate or vehicles without payment
Shares of stock or business interests
Jewelry, artwork, or other valuable personal property
Even forgiveness of debt, if not in the course of business, may be treated as a donation.
Who is Exempt from Donor’s Tax?
Some donations are exempt, even if they exceed ₱250,000:
Donations to:
Government agencies (for public purposes)
Charitable, religious, educational, cultural, or social welfare institutions, provided:
The organization is accredited by the BIR
No more than 30% of the donation is used for administrative expenses
Other Exemptions:
Gifts within the ₱250,000 annual threshold
Gifts between spouses (as part of conjugal or community property)
Support given to legitimate, illegitimate, or adopted children (as required by law)
Donor’s Tax Filing Requirements
Form to Use:
BIR Form 1800 – Donor’s Tax Return
Required Documents:
Deed of Donation or notarized agreement
Proof of ownership or title (if donating real or personal property)
Tax Identification Numbers (TIN) of both donor and donee
Sworn statements on the value of the property
Filing Deadline:
Within 30 days after the date of donation
File at the BIR Revenue District Office (RDO) where the donor is registered
Penalties for Non-Compliance
Late or non-filing may result in:
25% surcharge on the tax due
12% annual interest on unpaid tax
Compromise penalties (BIR-assessed fines)
In serious cases, it can result in legal disputes over property ownership or delays in estate settlement later on.
Tips for Donating Legally and Wisely
Keep all donation-related documents notarized and well-documented
Make sure your donee (recipient) also has a TIN
Consult with a tax expert before donating high-value assets
When donating real property, secure a Certificate Authorizing Registration (CAR) from the BIR before transferring titles
Final Thoughts
Giving gifts is a generous act—but in the eyes of the BIR, it’s also a taxable transaction. Whether you’re planning to pass down property, help a loved one financially, or support a charitable cause, knowing the rules about Donor’s Tax helps you give legally and confidently.
Need help preparing the forms or computing your Donor’s Tax? Talk to a BIR-accredited tax consultant or message us for tools and templates to simplify the process.
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