Donor's tax in the Philippines

Donor’s tax is a tax on gifts made while you are alive. Since the TRAIN law (from 1 January 2018), it is 6% of the total gifts you make in a calendar year above PHP 250,000 (NIRC Sec. 99, as amended by RA 10963). The donor files BIR Form 1800 within 30 days of the gift and pays at the same time (Sec. 103, as amended by RA 11976). The same rate applies whether you give to family or to anyone else.

What counts as a gift

• A transfer of property for nothing, “whether the transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal” (Sec. 98).
• A sale for less than it is worth. The difference between the fair market value and the price is treated as a gift (Sec. 100). A genuine sale “made in the ordinary course of business”, at arm’s length and with no intent to give, is not. Land or buildings that are capital assets follow the capital gains tax rules instead.
• Spouses file separately. If you give conjugal or community property, each spouse files for their own share (BIR Form 1800 guidelines).

Exempt gifts (Sec. 101): gifts to the national government or its non-profit entities and political subdivisions; and gifts to accredited non-profit educational, charitable, religious, cultural or social welfare organisations, if no more than 30% of the gift goes to administration. The old exemption for gifts on account of marriage was removed by TRAIN.

Money sent home

This page does not decide whether the money you send your family each month is a taxable gift. The Family Code makes some family members responsible for supporting each other: spouses, parents and children, and brothers and sisters, among others (Arts. 195 and 199). It defines support as what is “indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation” (Art. 194). Whether a particular transfer is support or a gift depends on the facts, so ask the BIR or a tax professional about your own case.

For gifts that are only cash, BIR RMC 10-2026 says the return is filed electronically and no eCAR is needed, because cash is not property registered in anyone’s name.

Giving land or a house to a child

1. A deed of donation. A gift of land or a building must be made in a public document (a notarised deed) that names the property, and the child must accept it, in the same deed or a separate one, while you are alive. If the acceptance is in a separate document, you must be notified of it in an authentic form, noted in both documents (Civil Code Art. 749).
2. Donor’s tax. File BIR Form 1800 and pay within 30 days. For land or a house, the gift’s value is the higher of the BIR zonal value and the assessor’s market value (BIR Form 1800 guidelines).
3. The eCAR. The BIR asks for, among other things: the TINs of donor and child, the notarised deed of donation, certified true copies of the title and tax declaration, a certificate of no improvement where it applies, a special power of attorney if someone signs for you, and, if the deed or power of attorney was signed abroad, “Certification from the Philippine Consulate, or Apostille” (BIR donor’s tax page).
4. Transfer tax and the new title. The local transfer tax is due within 60 days of the deed (RA 7160 Sec. 135); then the Register of Deeds issues the new title. See extrajudicial settlement of estate for those steps.

A gift cannot cut into other heirs’ shares. “No person may give or receive, by way of donation, more than he may give or receive by will” (Civil Code Art. 752). A gift that eats into what the law reserves for your other children or your spouse can be reduced later. See the legitime table in making a last will.

Giving now or leaving it in a will

We do not recommend one over the other. The process differs:

Scroll the table sideways for more

See estate tax in the Philippines and making a last will.