THENATIONAL INTERNAL REVENUE CODEOF THE PHILIPPINES[Tax Reform Act of 1997]Republic Act No. 8424AN ACT
AMENDING
THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR
OTHER
PURPOSES
TITLE III
CHAPTER IIDONOR'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.
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