Donor’s Tax Train Tax Law 2019 in the Philippines

donor's tax train law

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.

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. Learn more about real properties in the Philippines.

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.


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.

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19 Replies to “Donor’s Tax Train Tax Law 2019 in the Philippines”

  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?

  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

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