AN ACT AMENDING
THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED,
AND FOR OTHER
PURPOSES
TITLE III
ESTATE AND
DONOR'S TAX
CHAPTER II
DONOR'S TAX
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. -
(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
BUT
NOT OVER
THE
TAX SHALL BE
PLUS
OF
THE EXCESS OVER
P
100,000
Exempt
P
100,000
200,000
0
2%
P100,000
200,000
500,000
2,000
4%
200,000
500,000
1,000,000
14,000
6%
500,000
1,000,000
3,000,000
44,000
8%
1,000,000
3,000,000
5,000,000
204,000
10%
3,000,000
5,000,000
10,000,000
404,000
12%
5,000,000
10,000,000
1,004,000
15%
10,000,000
(B) Tax Payable
by Donor if Donee is a Stranger.
- When the donee or beneficiary is stranger, the tax payable by the donor
shall be thirty percent (30%) of the net gifts. For the purpose of this
tax, a "stranger", is a person who is not a:
(1) Brother,
sister (whether by whole or half-blood), spouse, ancestor and lineal descendant;
or(2) Relative
by consanguinity in the collateral line within the fourth degree of relationship.(C) Any contribution
in cash or in kind to any candidate, political party or coalition of parties
for campaign purposes shall be governed by the Election Code, as amended.
SEC.
100. Transfer for Less Than Adequate and Full Consideration.
- Where property, other than real property referred to in Section 24(D),
is transferred for less than an adequate and full consideration in money
or money's worth, then the amount by which the fair market value of the
property exceeded the value of the consideration shall, for the purpose
of the tax imposed by this Chapter, be deemed a gift, and shall be included
in computing the amount of gifts made during the calendar year.
SEC.
101. Exemption of Certain Gifts.
- The following gifts or donations shall be exempt from the tax provided
for in this Chapter:
(A) In the
Case of Gifts Made by a Resident. -
(1) Dowries or
gifts made on account of marriage and before its celebration or within
one year thereafter by parents to each of their legitimate, recognized
natural, or adopted children to the extent of the first Ten thousand pesos
(P10,000):(2) Gifts made
to or for the use of the National Government or any entity created by any
of its agencies which is not conducted for profit, or to any political
subdivision of the said Government; and(3) Gifts in
favor of an educational and/or charitable, religious, cultural or social
welfare corporation, institution, accredited nongovernment organization,
trust or philanthropic organization or research institution or organization:
Provided, however, That not more than thirty percent (30%) of said
gifts shall be used by such donee for administration purposes. For the
purpose of the exemption, a 'non-profit educational and/or charitable corporation,
institution, accredited nongovernment organization, trust or philanthropic
organization and/or research institution or organization' is a school,
college or university and/or charitable corporation, accredited nongovernment
organization, trust or philanthropic organization and/or research institution
or organization, incorporated as a nonstock entity, paying no dividends,
governed by trustees who receive no compensation, and devoting all its
income, whether students' fees or gifts, donation, subsidies or other forms
of philanthropy, to the accomplishment and promotion of the purposes enumerated
in its Articles of Incorporation.(B) In the
Case of Gifts Made by a Nonresident Not a Citizen of the Philippines.
-(1) Gifts made
to or for the use of the National Government or any entity created by any
of its agencies which is not conducted for profit, or to any political
subdivision of the said Government.(2) Gifts in
favor of an educational and/or charitable, religious, cultural or social
welfare corporation, institution, foundation, trust or philanthropic organization
or research institution or organization: Provided, however, That
not more than thirty percent (30%) of said gifts shall be used by such
donee for administration purposes.(C) Tax Credit
for Donor's Taxes Paid to a Foreign Country. -(1) In
General.-
The tax imposed by this Title upon a donor who was a citizen or a resident
at the time of donation shall be credited with the amount of any donor's
tax of any character and description imposed by the authority of a foreign
country.(2) Limitations
on Credit.
- The amount of the credit taken under this Section shall be subject to
each of the following limitations:(a) The amount
of the credit in respect to the tax paid to any country shall not exceed
the same proportion of the tax against which such credit is taken, which
the net gifts situated within such country taxable under this Title bears
to his entire net gifts; and(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.SEC.
102. Valuation of Gifts Made in Property.
- If the gift is made in property, the fair market value thereof at the
time of the gift shall be considered the amount of the gift. In case of
real property, the provisions of Section 88(B) shall apply to the valuation
thereof.
SEC.
103. Filing of Return and Payment of Tax. -
(A) Requirements.- any individual who makes any transfer by gift (except those which,
under Section 101, are exempt from the tax provided for in this Chapter)
shall, for the purpose of the said tax, make a return under oath in duplicate.
The return shall se forth:
(1) Each gift
made during the calendar year which is to be included in computing net
gifts;(2) The deductions
claimed and allowable;(3) Any previous
net gifts made during the same calendar year;(4) The name
of the donee; and(5) Such further
information as may be required by rules and regulations made pursuant to
law.(B) Time and
Place of Filing and Payment.
- The return of the donor required in this Section shall be filed within
thirty (30) days after the date the gift is made and the tax due thereon
shall be paid at the time of filing. Except in cases where the Commissioner
otherwise permits, the return shall be filed and the tax paid to an authorized
agent bank, the Revenue District Officer, Revenue Collection Officer or
duly authorized Treasurer of the city or municipality where the donor was
domiciled at the time of the transfer, or if there be no legal residence
in the Philippines, with the Office of the Commissioner. In the case of
gifts made by a nonresident, the return may be filed with the Philippine
Embassy or Consulate in the country where he is domiciled at the time of
the transfer, or directly with the Office of the Commissioner.
SEC.
104. Definitions.
- For purposes of this Title, the terms "gross estate" and "gifts"
include real and personal property, whether tangible or intangible, or
mixed, wherever situated: Provided, however, That where the decedent
or donor was a nonresident alien at the time of his death or donation,
as the case may be, his real and personal property so transferred but which
are situated outside the Philippines shall not be included as part of his
"gross estate" or "gross gift": Provided, further, That franchise
which must be exercised in the Philippines; shares, obligations or bonds
issued by any corporation or sociedad anonima organized or constituted
in the Philippines in accordance with its laws; shares, obligations or
bonds by any foreign corporation eighty-five percent (85%) of the business
of which is located in the Philippines; shares, obligations or bonds issued
by any foreign corporation if such shares, obligations or bonds have acquired
a business situs in the Philippines; shares or rights in any partnership,
business or industry established in the Philippines, shall be considered
as situated in the Philippines: Provided, still further, that no
tax shall be collected under this Title in respect of intangible personal
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.
Harvard
Computer Systems, Inc.