Kinds of Donation As To Tax Liability

After the students self-reading and self-understanding these tax topics at home and after the vital
related teachers classroom lectures, discussions and illustrations, the students should be able to know
and comprehend these tax topics; Allowed Deduction 1. Exclusions from the allowed deduction 2.
Inclusions in the allowed deduction 3. Allowed Deduction for RCD, RAD, NRCD 4. Allowed Deduction for
NRAD 5. Components of Allowed Deduction; a. Ordinary Deductions Expenses, losses, indebtedness,
taxes, Property Transfers Public Use, Vanishing Deduction, Amount Receive by Heirs from Decedent
employer, b. Special Deduction; Family Home Allowance, Standard Deduction, c. Share of spouse in NCE
6. Regimes between Spouses
After the students self-reading and self-understanding these tax topics at home and after the vital
related teachers classroom lectures, discussions and illustrations, the students should be able to know
and comprehend these tax topics; Sec. 106. Seller of Goods Output Tax/Vat on Sales, Input Tax/Vat on
Purchases Other Vat Credits Vat Payable, Excess Vat Credit Sec. 107. Importer of goods from Abroad
Input Tax / Vat on Landed Cost Sec, 108. Seller of Services Output Tax/ Vat on Sales, Input Tax/ Vat on
Purchases Other Vat Credits Vat Payable, Excess Vat Credit Methods of computing Vat; 1. Tax exclusive
basis 2. Tax inclusive basis Allocation of unidentified untraceable input tax 1. Non-creditable input tax 2.
Creditable input tax.
 Senior Citizen Law

 a. Exemptions from income tax of senior citizens
 b. 20% discount on purchases of goods or services from certain establishments
 c. Exemption from the 12% Vat on purchases of goods or services from certain establishments
 d. Tax incentives for qualified establishment selling goods, services to senior citizens 2.
 Magna Carta for Disabled Persons
 a. Tax incentives for qualified establishment selling goods, services to disabled persons b. 20%
discount on purchases of goods or services from certain establishments
 c. Exemption from the 12% Vat on purchases of goods or services from certain establishments
3. Special Economic Zone Act a. Policy and the Philippine Economic Zone Authority (PEZA) b.
Registration of Investment
Kinds of Donation as to Tax Liability:

1. Donation Inter vivos: refers to gift made and intended by donor to take effect during his lifetime. This
gift is subject to donor’s tax.
2. Donation Mortis causa: refers to gifts made during lifetime of donor but is intended by donor to take
effect upon his death. This property transfer partakes the nature of testamentary disposition and is
governed by law on succession; hence this property is subject to estate tax. Requisites of Valid Donation:
1. Donative intent of donor. 2. Capacity or authority of donor 3. Delivery of donated property 4.
Acceptance of Donee 5. Donation is in prescribed forms Prescribed Forms: 1.Donation of personal
property- if value of property is more than P 5,000 then donation and acceptance must be in writing;
otherwise, the donation and acceptance may be made orally. 2. Donation of real property- It must be in
writing and in a public document. Classification of Donor’s tax: 1.Excise tax 2.Ad valorem tax 3.Direct tax
4. national tax 5. Transfer tax 6. Personal tax 7. Graduated tax or Progressive tax (before TRAIN law)
Purpose of Donor’s Tax: 1. To complement the estate tax by preventing the tax free depletion of donor’s
estate during his lifetime. 2. To raise revenue in order to support the government by funding the cost of
its operations.
For Personal Properties [additional two (2) photocopies of each document]: 9. Proof of valuation of
shares of stock at the time of donation, if applicable; a. For shares of stocks not listed/not traded - Latest
Audited Financial Statement of the issuing corporation with computation of the book value per share b.
For shares of stocks listed/traded - Price index from the Philippine Stock Exchange (PSE)/latest Fair
Market Value (FMV) published in the newspaper at the time of transaction c. For club shares - Price
published in newspapers on the transaction date or nearest to the transaction date 10. Stock certificate;
11. Proof of valuation of other types of personal properties, if applicable; 12. Proof of claimed
deductions, if applicable; 13. Certificate of deposit/investment/indebtedness/stocks for donated cash or
securities; 14. Certificate of registration of motor vehicle, if any; Other Additional Requirements, if
applicable [additional two (2) photocopies of each document]: • Duly Notarized Original Special Power
of Attorney (SPA), if the person transacting/processing the transfer is not a party to the transaction •
Certification from the Philippine Consulate if d
ocument is executed abroad • Location Plan/Vicinity map issued by the Local Assessor’s Office if zonal
value cannot be readily determined from the documents submitted • Certificate of Exemption/BIR
Ruling issued by the Commissioner of Internal Revenue or his authorized representative, if tax exempt •
Such other documents as may be required by law/rulings/regulations/etc. Penalty / Additions to the
Basic Assessed tax or Deficiency tax 1.Surcharge of 25% in cases of:
a. Failure to file any tax return and pay the tax due on the required date as prescribed b. Unless
otherwise authorized by BIR Commissioner, filing a tax return with internal revenue officer other than
those whom the return is required to be filed. c. Failure to pay the deficiency tax within the time
prescribed for its payment in the notice of assessment and demand. d. Failure to pay the full or part of
amount of tax shown on nay tax return required to be filed. 2.Surcharge of 50% in cases of; a. In case of
willful neglect to file tax return within the period prescribed by law and regulations. b. In case of false or
fraudulent tax return is willfully made.

Kinds of Donation As To Tax Liability

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After the students self-reading and self-understanding these tax topics at home and after the vital

 Senior Citizen Law

 Magna Carta for Disabled Persons

Kinds of Donation as to Tax Liability:

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