Law,
as
amended,
was
not
subject
to
donors
tax.
[BIR
Ruling
No.
109-2011,
7
Apr.
2011.]
Q:
What
is
the
law
that
governs
the
imposition
of
donors
tax?
*
The
gift
is
perfected
from
the
moment
of
acceptance
by
the
donee,
and
it
is
completed
at
the
time
of
delivery.
The
delivery
can
either
be
constructive
or
actual.
Hence,
it
is
the
law
at
the
time
of
the
perfection
and/or
completion
that
will
govern
the
imposition
of
the
donors
tax.
**
A
gift
that
is
incomplete
because
of
reserved
powers
becomes
complete
when
either:
(i) The
donor
renounces
the
power;
or
(ii)
His
right
to
exercise
ceased
because
of
the
happening
of
some
event
or
contingency
or
the
fulfillment
of
some
condition,
other
than
the
death
of
the
donor.
[RR
No.
02-03]
Q:
What
transfer
may
be
considered
as
donations?
*
The
following
transfers
may
be
treated
as
donations:
(a)
debt
condoned
or
remitted
(in
which
case
the
amount
of
the
debt
is
a
gift
from
the
creditor
to
the
debtor
and
need
not
be
included
in
the
latters
gross
income)
[Sec.
50,
RR
No.
02-
40];
(b)
transfers
made
in
trust
for
another
person;
and
(c)
renunciation
by
the
surviving
spouse
of
his/her
share
in
the
conjugal
partnership
or
absolute
community
after
the
dissolution
of
the
marriage
in
favor
of
the
heirs
of
the
deceases
spouse
or
any
other
person.
Sec.
98,
Imposition
of
Tax
(A)
There
shall
be
levied,
assessed,
collected
and
paid
upon
the
transfer
by
any
person,
resident
or
nonresident,
of
the
property
by
gift,
a
tax,
computed
as
provided
in
Section
99.
(B)
The
tax
shall
apply
whether
the
transfer
is
in
trust
or
otherwise,
whether
the
gift
is
direct
or
indirect,
and
whether
the
property
is
real
or
personal,
tangible
or
intangible.
Sec.
99,
Rates
of
Tax
Payable
by
Donor
99(A)
In
General
-
The
tax
for
each
calendar
year
shall
be
computed
on
the
basis
of
the
total
net
gifts
made
during
the
calendar
year
in
accordance
with
the
following
schedule:
If
the
net
gift
is:
Over
P
100,000
200,000
500,000
1,000,000
3,000,000
5,000,000
10,000,000
Plus
2%
4%
6%
8%
10%
12%
15%
P100,000
200,000
500,000
1,000,000
3,000,000
5,000,000
10,000,000
(4)
If
the
same
property
acquired
by
donation
is
subsequently
conveyed
by
way
of
sale
or
exchange,
the
sale
will
be
subject
to
corporate
income
tax
on
the
gain
realized
which
is
determined
by
deducting
from
the
gross
selling
price
the
historical
cost
or
the
adjusted
basis
thereof,
as
it
would
be
in
the
hands
of
the
donor,
pursuant
to
Sections
27
and
101
of
the
1997
Tax
Code,
and
consequently
to
creditable
expanded
withholding
tax
under
Section
2-98,
as
amended.
If
the
donee-institution
donates
the
subject
property
to
a
non-
exempt
done,
it
shall
be
liable
for
donors
tax
pursuant
to
Section
98
of
the
1997
Tax
Code.
[BIR
Ruling
No.
128-2013,
4
Apr.
2013.]
Q:
What
is
the
benefit
derived
by
a
donor
in
case
the
donee
is
accredited
by
the
Philippine
Council
for
NGO
Certification
(PCNC)?
*
Gifts,
donations,
and
other
contributions
made
by
residents
to
an
educational
institution
or
a
foundation
are
exempt
from
donor's
tax,
subject
to
the
condition
that
not
more
than
30%
of
said
gift
shall
be
used
for
administration
purposes.
[Sec.
101(A)(3),
1997
Tax
Code.]
Moreover,
for
income
tax
purposes,
an
accreditation
of
the
educational
institution
or
foundation
by
accrediting
entities,
such
as
the
PCNC,
allows
a
donor
to
deduct
the
charitable
contribution
as
a
business
expense.
[RR
No.
13-98
dated
8
Dec.
1998;
BIR
Ruling
No.
029-10,
12
Aug.
2010;
BIR
Ruling
No.
[NSNP-
(S30H-010)061-10],
5
July
2010;
BIR
Ruling
No.
017-10,
1
July
2010]
(b)
The
total
amount
of
the
credit
shall
not
exceed
the
same
proportion
of
the
tax
against
which
such
credit
is
taken,
which
the
donor's
net
gifts
situated
outside
the
Philippines
taxable
under
this
title
bears
to
his
entire
net
gifts.
*
The
case
of
CIR
v.
Central
Luzon
Drug
Corporation
dealt
with
the
20%
discount
required
by
law
to
be
given
to
senior
citizens.
The
Supreme
Court
held
that
the
20%
discount
is
a
tax
credit
for
the
establishment
concerned.
[NOTE:
This
was
the
old
doctrine.
Today,
the
20%
discount
is
a
tax
deduction
from
the
gross
income
or
gross
sales
of
the
establishment
concerned.
However,
the
discussion
on
tax
credit
for
donors
taxes
paid
to
a
foreign
country
remains
instructive.]
It
stated:
While
a
tax
liability
is
essential
to
the
availment
or
use
of
any
tax
credit,
prior
tax
payments
are
not.
On
the
contrary,
for
the
existence
or
grant
solely
of
such
credit,
neither
a
tax
liability
nor
a
prior
tax
payment
is
needed.
The
Tax
Code
is
in
fact
replete
with
provisions
granting
or
allowing
tax
credits,
even
though
no
taxes
have
been
previously
paid.
For
example,
in
computing
the
estate
tax
due,
Section
86(E)
allows
a
tax
credit
--
subject
to
certain
limitations
--
for
estate
taxes
paid
to
a
foreign
country.
Also
found
in
Section
101(C)
is
a
similar
provision
for
donors
taxes
--
again
when
paid
to
a
foreign
country
--
in
computing
for
the
donors
tax
due.
The
tax
credits
in
both
instances
allude
to
the
prior
payment
of
taxes,
even
if
not
made
to
our
government.
[CIR
v.
Central
Luzon
Drug
Corporation,
GR
No.
159647,
15
Apr.
2005.]
property:
(a)
if
the
decedent
at
the
time
of
his
death
or
the
donor
at
the
time
of
the
donation
was
a
citizen
and
resident
of
a
foreign
country
which
at
the
time
of
his
death
or
donation
did
not
impose
a
transfer
tax
of
any
character,
in
respect
of
intangible
personal
property
of
citizens
of
the
Philippines
not
residing
in
that
foreign
country,
or
(b)
if
the
laws
of
the
foreign
country
of
which
the
decedent
or
donor
was
a
citizen
and
resident
at
the
time
of
his
death
or
donation
allows
a
similar
exemption
from
transfer
or
death
taxes
of
every
character
or
description
in
respect
of
intangible
personal
property
owned
by
citizens
of
the
Philippines
not
residing
in
that
foreign
country.
The
term
'deficiency'
means:
(a)
the
amount
by
which
tax
imposed
by
this
Chapter
exceeds
the
amount
shown
as
the
tax
by
the
donor
upon
his
return;
but
the
amount
so
shown
on
the
return
shall
first
be
increased
by
the
amount
previously
assessed
(or
Collected
without
assessment)
as
a
deficiency,
and
decreased
by
the
amounts
previously
abated,
refunded
or
otherwise
repaid
in
respect
of
such
tax,
or
(b)
if
no
amount
is
shown
as
the
tax
by
the
donor,
then
the
amount
by
which
the
tax
exceeds
the
amounts
previously
assessed,
(or
collected
without
assessment)
as
a
deficiency,
but
such
amounts
previously
assessed,
or
collected
without
assessment,
shall
first
be
decreased
by
the
amount
previously
abated,
refunded
or
otherwise
repaid
in
respect
of
such
tax.
10