Donor’s Tax Train Tax Law 2019 in the Philippines

Are you familiar with the donor’s tax train law in the Philippines? If not, then you need to read on and find out what it is all about. This new tax law has been causing quite a stir among business owners and employees alike, so it is important to understand how it works and what its implications are. Keep reading to learn more!

Donor tax is the tax on the transfer of gifts without consideration. These gifts might come from your parents, friends, loved ones, or from your employer.  But how does the government make sure that these transactions are taxed? To regulate some malpractices and other forms of tax evasions in the Philippines, the government imposed a tax called “Donor’s tax”. Let’s start to discuss what’s new on our “donor’s tax train law”.

What is the Donor’s Tax Train Law?

When a person transfers property to anyone without consideration during his lifetime, the act of transfer is subject to a tax called the donor’s tax. Donor’s tax is not a tax on properties, but on the action of transmission or by way of a gift. For more updates visit the BIR homepage!

Have you given any gifts or donations to someone? Have you experienced difficulties in filing the donor’s tax in the Philippines before? Interestingly, the new rulings in the Philippines made it simpler and more comfortable to compute. Do you know why? Before you give gifts or transfer properties, you should know these facts about the new donor’s tax in the Philippines under this train tax law.

What are the Requisites of Valid Donations?

This shall not take effect if the donation is not completed. The transfer of property is completed/perfected if the following elements are met:

  1. Acceptance of the donee or recipient
  2. There is actual or constructive delivery of properties

If the property donated is immovable, it must be in public document specifying therein the property given. Deed of Donation or in a separate public record could be enough, but it shall not take effect after the completion during the lifetime of the donor.

What is the Donor’s Tax Rate?

Under the old regulation of the donor’s tax, the transfer of properties is taxed based on the donor. Under the TRAIN law, it makes the computation simpler and easier to understand and to remember. All transfer of properties during the lifetime of the donor will be subject to six percent (6%) more than two hundred fifty pesos (250,000) during the calendar year.

The new tax rate is 6% for any donations which is more than 250,000 regardless the relationship of the giver and the recipient.

However, any contributions/gifts in cash or kind to any political party or coalition of parties, candidate for campaign purposes shall be governed by the Election Code, as amended.

What are the Exempted Donations

In general, all donations in the amount of 250, 000 or less within the calendar year will not subject to donor’s tax.

There are some gifts or transfers of properties that are exempted by nature or by law. Here are some of those donations:

Transfer for less Than Adequate Consideration

Any property transferred other than real estates for a less than an adequate amount and full consideration in money by which the fair market value of the said property exceeded the value received; then any excess will be considered as part of the total gifts to be subjected to donor’s tax.

However, any property transfer made in the ordinary course of business or arm’s length transaction and there is no donative intent will be considered as sale and be exempted from transfer tax but rather a business tax.

Transfer for Public Use (TPU)

Gifts made to the government for public purposes and to any entity created any of its agencies which non-profit organization is not subject to tax.

Gifts made to educational, charitable, religious, cultural or social welfare corporation, trust or philanthropic organization or research institutions be exempted provided that more than thirty percent (30%) said donations should be for administrative purposes.

Donations Made to Your Spouse

Donations or gifts given between marriage are is not subject to donor’s tax. Therefore, any transactions between spouses are considered marital properties. So it means that you can’t transfer properties without ownership.

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How to Claim Exemptions?

If the donor is engaged in business donated at least fifty thousand (50,000) and wanted to be exempted from donor’s tax and to claim a full deduction of the gifts given, a notice of donation by a donor should be given to the Revenue District Office (RDO) within 30 days after the receipt of the donee’s duly issued Certificate of Donation.

This certificate should be attached to the Notice of Donation and should state that not more than thirty percent (30%) of the donations will be used for administrative purposes.

What are the Valuations of Donations?

General rule: Every property of the decedent is appraised according to their fair market value at the time of his death.

Real Property

Any real property is to be valued at the fair market value as determined by the Commissioner or the fair market value (appraise value) by an assessor whichever is higher.

Shares of Stocks

The market value of the stocks will depend on whether listed or non-listed in the stock exchanges. If the shares are listed, the fair market value is equal to the mean between the highest and lowest cost at the date of death, unless otherwise market value at the time of his death.

Those stocks that are unlisted are based on their book value while preferred stocks are valued at par value. In computing the book value of the ordinary shares, the surplus shall not be included the same as to proffered stocks, if there is.

Annuity, Habitation, or Right to Usufruct

In determining the values, the probable life of the beneficiary with the latest basic standard mortality table must be considered.

For computing the NET GIFT, if there is a mortgaged property transferred as a gift and transfer also the obligation to pay, then the mortgage payable should be deducted to compute the net gifts.

If the donation is complete because of reserved powers. This transfer can be done if the donor renounces the power or his right to exercise the reserved power stops because of the fulfillment of some conditions other than death.

Related: De minimis Benefits and a 90,000 Tax Exemption Philippines


What can we learn about the donor’s tax train law in the Philippines? Not all donations are subject to a 6% donor’s tax under train tax law. Only those donations that are more than thresholds of 250,000. If you have anything to give comments on this article, please feel free to drop your thoughts below. Let us know your thoughts because we value every thought.

Recommended: Five Effective Ways in Solving Estate Tax


  1. Hi,

    Just want to ask about transferring of property from a parent to their children using Deed of Donation.

    Aside from donor’s tax of 6% and Docs Stamps of 1.5%, will it be subject to VAT if the property is commercial (as indicated in the Tax Declaration?

    If it only involves 6% donor’s tax, will this mode of transfer be used by others just to escape the capital gains tax + vat?

    Kindly enlighten. Thank you very much

  2. I was casually speaking with a notary public regarding the Deed of Donation. She mentioned that a donor can only donate (under the law) a maximum of two real estate properties per year, is this true? I am not aware of this restriction. My mother intends to donate 4 real estate properties in 2021.
    Kindly enlighten. Many thanks!

  3. Hi, I was wondering how to compute the donors tax if the donors are more than one? Like for example the heirs of the land owner is 4 including the wife then the owner is deceased. Just to clarify things on our side. Thank you ☺️

  4. Help pretty please. I’m confused. If a relative gifted me with 300,000, then what is the donor’s tax for that? Is it 6% of 300,000 or 6% of 50,000? Hoping for your kind help.

      1. Thank you so much!! One last thing, if my father gifted me with, let’s say, 100,000, and my grandfather gifted me with 200,000, is this subjected to donor’s tax? Do I need to combine the total gifts to me and subject it to donor’s tax or is it based on the amount from each donor? Hoping for kind clarification and thank you so much again!!

      2. Who should be the one responsible for taking care of the donor’s tax (filing, submitting, paying, etc.), the giver or the receiver?

    1. how about allowances given to children ( ex. kisses delavin her monthly allowance is 30k )? is the 110k excess of 250k taxable? if I want to give my father an allowance of 50k/month is it taxable?

  5. My grandfather gifted me with P500K via online bank transfer. He was sick and bedridden. He died shortly after and before he could file/pay for donor’s tax. What will happen? Am I obligated to file donor’s tax on his behalf? We can’t even find his TIN. The current TIN inquiry setup via app requires the person themselves to inquire. What should I do? I’m kindly hoping for your kind advice. I would extremely appreciate your help.

  6. I’m hoping you could pretty please kindly clarify some things for me…

    I’m reading through BIR’s guide about donor’s tax while looking at the form (1800).

    The guide states that “only one return shall be filed for several gifts (donations) by a donor to the different donees on the same date.”

    For cash gifts and if there are multiple donees, how does one go about computing the exempted 250K gift?

    Hypothetically speaking, if Donor gave 300K to Donee A and 300K to Donee B on the same day, is 500K (250K x 2) the amount exempted from tax (with a tax of 6% of 100K)? Or is it just 250K (with a tax of 6% of 350K)? If it’s the latter, is P250K the exempted amount regardless of how many Donees there are?

    What if Donor gave 300K to Donee A yesterday, and then 300K to Donee B today? Can donor file them separately and exempt a total of 500K (250K x 2)?

    Can you clarify this for me pretty please? I’d highly appreciate your assistance. Thank you!

  7. Hi yung 250k exemption is for within calendar year. It means you can reduced the gifts of 250k within one year.

    Regardless as to the dates of filing the same parin ang ruling. But it would be better if you could file the donor’s tax not a separate day.

  8. Hi Good Day po.
    our company donated 30,000 worth of tree, and to my understanding po exempt po sya since di sya nagexcess sa threshold. do we still need to file for donor’s tax?. Thank you. God bless.

  9. Hello Mam/Sir, regarding the donor obligation if a private person earning purely compensation for example donated worth P1million can he later claim that as a deduction? if given to:
    a) to a relative;
    b) government
    c) non stock non profit organization

    what is the rule however, on donation during election time? will that be subject of tax or can the same be deducted from gross income?
    Thank you for your time. God Bless

  10. Hi, Our company donates to a Foundation. Is there a maximum amount of donation to a Foundation that can be exempted from donor’s tax?

    Thank you.

  11. Hi po, pinamanahan kami ng kapatid ko ng mother ko ng properties. 2 sa akin and 1 sa kanya (ung isa kasi na transfer na sa knya before our mother died, kaya we have equal shares). Sabi ng BIR magkakaron ng Donor’s Tax dahil hindi equal ang sharing. Pano po ang magiging computation nun and pwede ba magrequest for exemption ? Thank you, and stay safe.

  12. good evening po, my mom who was widowed last year by my dad intends to donate her piece of land ( which was transferred to her by deed of sale by her parents, year 1989 ) only to me and does not include my brothers. does she still need to execute an extrajudicial settlement indicating that she is the existing heir and my brothers are waiving their right to the land being donated.?

  13. Hello po
    If less than 250,000 yung cash donation to an individual, need pa rin po magfile donor’s tax return and claim po as expense ng association?
    Thank you po

  14. Hello po….my father died last nov 2019 and left us a property. Is there a way po ba na ma exempt sa donors tax since mag waive ng rights ang mother ko? Nagpunta kami sa BIR at sa amount na compute hindi po namin kayang bayaran ang donors tax…Salamat po in advance.

  15. Hi po, asking about donors tax from spouses. Grand parents donating a property to their grandchildren. Donors tax was computed separately for the grand parents. One property, 2 donors tax using the same amount of the property.
    Eg. Property is 1m to be donated.
    Lolo donors tax computed at 1m less 259k
    Lola donors tax computed at 1m less 259k

    Is this right po? Only one conjugal property donated taxed 2x.

    Please enlighten. Thank you.

  16. hello po good afternoon. Ask ko lang po namatay kasi father ko last year. nagpagawa kami ng extrajudicial settlement then indicated there is as per law 50% sa mom ko dahil property nila ni dad and nakapangalan sa kanilang dalawa. Then sa 50% hati kami lahat na heirs, me, my brother and my mother. kapag ganyan paano po computation ng tax? since technically 1/3 ng value is sa akin based sa extra judicial settlement?

  17. The lot is still under our Lola’s maiden name. She has 2 sons; an Uncle and our father. Both our father and mother are dead, and we are 8 children, all living. Our Uncle agreed that it was his brother who owns this lot, our ancestral home being located in the same lot. In the preparation of EJS, he completely waived his rights over the property, in favor of us heirs of our father on equal shares. My question – is his waived share still subject to Donor’s Tax?

  18. Good day!

    if an individual Stock holder of Company A donates share to another Company B, is it subject to Donor’s Tax? and how to compute the value of donation?

  19. ask ko lang po how to transfer the property owned by the company to its stockholders? the company is already closed. If the stockholders agree to sell the property, the company cannot anymore issue invoice or OR. The best way daw po is to transfer the property to its stockholders. is it only thru deed of donation that the property can be transferred to its stockholders or is there any other legal procedure to do?

  20. Hello, I just received a donations of 500 shares of stock with a fare market value of 225,000. The Donor is an ordinary employee, so in other words he doesn’t need to claim any expenses from filing the donors tax. My question as a Donee is, since the donation is less than 250,000 and it is exempted from Donor’s tax, do we still need to file the Donor’s tax return?.. if so, can we file it manually thru Ebir facility and submit it online? Thank you in advance.

  21. Hi po. Regarding sale naman po, if buyer po is a minor, possible ba masubject sa donor’s tax ang transaction considering na walang fund or not capable ang minor na bumili ng property? If you know po any regulation covering this specific concern please indicate po. Thank you

  22. Hello Po, nagpagawa ng deed of donation yong father and mother ko dated 2021. May penalty naba if mag process ako sa BIR, halimbawa below 250000 lang ang value sa lupa at bahay kasi old na yon. Thank you

  23. Hi, Is Deed of Donation subject to vat (12%)? Tried verifying the TIN ni Donor and he’s registered as Single Proprietorship (Real Estate: Buying and Selling).

  24. Hello po,

    Our great grand father died in 1923. He died without any last will testament. His 5 great grandchildren solely inherited his property which is a parcel of land less than 200sqm. Later on, 3 siblings (grandchildren) decided to waive their rights in favor of the 2 siblings and executed an extrajudicial estate with waiver of share. It was done in 1986. The property is still untitled until now. May I ask po if the property is still subject to donor’s tax even when the 3 siblings generally waived their rights? If yes, how will the donor’s tax be computed? Thank you..

  25. Are there any tax strategies regarding estate and donor’s tax, within legal and ethical bounds, para mamanage yung tax liabilities more efficiently? like reduction/minimization of tax liabilities, or pagiwas talaga dun sa mismong transfer tax? thanks for answering!

  26. Our company is donating fully depreciated cars to their Managers. The book value at the time of donation is only P 1.00. Is the donors’ tax be based on the book value or market value at the time of donation? And if it is already exempt from donors’ tax., do we need to go to BIR for what kind of documentation if it is already exempted from donors’ tax? Thank you and hoping to hear from you soon.

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