Section 98 (A) Gifts Made by a Resident.

Imposition of Tax
1. Dowries or gifts made on account of
marriage and before its celebration or within
(A) There shall be levied, assessed, collected and paid one year thereafter by parents to each of
upon the transfer by any person, resident or their legitimate, recognized natural, or
nonresident, of the property by gift, a tax, computed adopted children to the extent of the first
as provided in Section 99. Ten thousand pesos (P10,000):
(B) The tax shall apply whether the transfer is in trust
or otherwise, whether the gift is direct or indirect, 2. Gifts made to or for the use of the National
and whether the property is real or personal, tangible Government or any entity created by any of
or intangible. its agencies which is not conducted for
profit, or to any political subdivision of the
Section 99 said Government; and
Rates of Tax Payable by Donor
3. Gifts in favor of an educational and/or
Rate: 6% on the basis of the total gifts in excess charitable, religious, cultural or social
of P250,000 exempt from gift made during the welfare corporation, institution, accredited
calendar year. nongovernment organization, trust or
philanthrophic organization or research
institution or organization
Tax Payable by Donor if Donee is a Stranger Provided: Not more than thirty percent (30%)
(6%) of the net gifts. of said gifts shall be used by such donee for
administration purposes.
'stranger,' is a person who is not a:
For the purpose of the exemption, a 'non-
1. Brother, sister (whether by whole or half- profit educational and/or charitable
blood), spouse, ancestor and lineal corporation, institution, accredited
descendant; or nongovernment organization, trust or
2. Relative by consanguinity in the collateral philanthrophic organization and/or research
line within the fourth degree of relationship. institution or organization' is a school,
college or university and/or charitable
Any contribution in cash or in kind to any corporation, accredited nongovernment
candidate, political party or coalition of organization, trust or philanthrophic
parties for campaign purposes - governed by organization and/or research institution or
the Election Code, as amended. organization, incorporated as a nonstock
entity, paying no dividends, governed by
Section 100 trustees who receive no compensation, and
Transfer for Less Than Adequate and full Consideration devoting all its income, whether students'
fees or gifts, donation, subsidies or other
forms of philanthrophy, to the
Where property, other than real property, is
accomplishment and promotion of the
transferred for less than an adequate and full
purposes enumerated in its Articles of
consideration in money or money's worth, then the
Incorporation.
amount by which the fair market value of the
property exceeded the value of the consideration =
(B) Gifts Made by a Nonresident not a Citizen of the
deemed a gift, and shall be included in computing
Philippines (Nonresident alien)
the amount of gifts made during the calendar year.
1. Gifts made to or for the use of the National
Section 101 Government or any entity created by any of
Exemption of Certain Gifts 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 the purpose of the said tax, make a return under oath
charitable, religious, cultural or social in duplicate. The return shall set forth:
welfare corporation, institution, foundation,
trust or philanthrophic organization or a) Each gift made during the calendar year
research institution or organization: which is to be included in computing net
Provided, however, That not more than gifts;
thirty percent (30% of said gifts shall be used b) The deductions claimed and allowable;
by such donee for administration purposes. c) Any previous net gifts made during the same
calendar year;
(C) Tax Credit for Donor's Taxes Paid to a Foreign d) The name of the donee; and
Country e) Such further information as may be required
by rules and regulations made pursuant to
In General law.

The tax imposed upon a donor who was a Time and Place of Filing and Payment
citizen or a resident at the time of donation
shall be credited with the amount of any The return of the donor shall be filed within thirty
donor's tax of any character and description (30) days after the date the gift is made and the tax
imposed by the authority of a foreign due thereon shall be paid at the time of filing.
country.
Except in cases where the Commissioner otherwise
Limitations on Credit permits, the return shall be filed and the tax paid to:

a) The amount of the credit in respect to the tax 1. an authorized agent bank
paid to any country shall not exceed the same 2. the Revenue District Officer
proportion of the tax against which such credit 3. Revenue Collection Officer or
is taken, which the net gifts situated within 4. duly authorized Treasurer of the city or
such country taxable under this Title bears municipality where the donor was domiciled
to his entire net gifts; and at the time of the transfer, or
b) The total amount of the credit shall not exceed 5. if there be no legal residence in the
the same proportion of the tax against which Philippines, with the Office of the
such credit is taken, which the donor's net Commissioner.
gifts situated outside the Philippines taxable
under this title bears to his entire net gifts. Gifts made by a nonresident

Section 102 The return may be filed with the Philippine Embassy
Valuation of Gifts Made in Property or Consulate in the country where he is domiciled at
the time of the transfer, or directly with the Office of

the Commissioner.
Property - the fair market value thereof at the time of
the gift shall be considered the amount of the gift.
Real property, provisions of Section 88(B) shall apply Section 104
to the valuation thereof. Definitions
'GROSS ESTATE' AND 'GIFTS' – include real
Section 103 and personal property, whether tangible or intangible,
Filing of Return and Payment of Tax or mixed, wherever situated
Provided: where the decedent or donor was a
Requirements nonresident alien at the time of his death or donation,
as the case may be, his real and personal property so
Any individual who makes any transfer by gift transferred but which are situated outside the
(except those which, under Section 101, are exempt Philippines shall not be included as part of his 'gross
from the tax provided for in this Chapter) shall, for estate' or 'gross gift'.
 Provided further:
1. franchise which must be exercised in the Philippines;
2. shares, obligations or bonds issued by any corporation
or sociedad anonima organized or constituted in the
Philippines in accordance with its laws;
3. shares, obligations or bonds by any foreign corporation
eighty-five percent (85%) of the business of which is considered as situated in
located in the Philippines; the Philippines:
4. shares, obligations or bonds issued by any foreign
corporation if such shares, obligations or bonds have
acquired a business situs in the Philippines;
5. shares or rights in any partnership, business or industry
established in the Philippines

Provided, still further: no tax shall be collected 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.

DEFICIENCY
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
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.