Donor's Taxation

Walang taxpayers and model

Donation

It is an act of liberality whereby a person disposes gratuitously of thing or right in favor of another, who accepts it.

Article 725, Civil Code of the Philippines

article in civil code that defines donation

INTER-VIVOS DONATION

A donation which takes effect during the lifetime of the donor (and donee).

MORTIS CAUSA DONATION

takes effect during the death of the decedent

MORTIS CAUSA DONATION

those (even if done during the lifetime of the donor) were given in contemplation of death

donor’s tax

tax applicable to inter-vivos donations

estate tax

tax applicable to mortis-causa donations

Capacity of the donor

Intention to donate

Perfection of a contract of donation

Consummation of a contract of donation

Certain formalities of donation

essential requisites of donation

Capacity of the donor

The capacity of the donor to donate shall be determined at the time of making the donation.

Intention to donate

As a rule, donative intent is necessary to effect the donation. It should be based on the liberality/generosity of the donor.

cognition theory

contract of donation is PERFECTED when the DONOR KNOWS OF THE ACCEPTANCE OF THE DONEE.

Article 746, Civil Code of the Philippines

article that states “acceptance must be made during the lifetime of the donor and of the donee”

upon delivery

when is a contract considered consummated or completed

Certain formalities of donation

If the donation is required to be in certain form, such must be complied with. Otherwise, the donation shall be null and void.

public instrument (regardless of amount)

form required for transfer of real property

public instrument

form required for transfer of intangible personal property

written instrument

form required for transfer of tangible personal property >5k

oral delivery

form required for transfer of tangible personal property ≤5k

imposed on the transfer of property by the way of gift inter-vivos

shall not apply until there is a completed gift

timing is upon the acceptance of the donee / delivery of the property donated applicable law

shall be the law in force at the time of perfection/completion of the donation

national tax

direct tax

proportional tax

ad-valorem tax

revenue tax

imposed on a calendar year basis

nature and characteristics of donor’s tax