Questions and Answers on Philippine Donor's Tax

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FREQUENTLY ASKED QUESTIONS: DONORS TAX 1. Who ar are e req equi uirred to !e th the e Do"or#$ Ta% Retur"& E'er( E'er ( )er$ )er$o"* o"* +het +hether her "atu "atura! ra! or  ,uridi-a!* re$ide re$ide"t "t or "o"re$id "o"re$ide"t* e"t* +ho tra"$/er$ or -au$e$ to tra"$/er )ro)ert( 0( i/t* +hether i" tru$t or other+i$e* +hether the i/t i$ dire-t or i"dire-t a"d +hether the )ro) o)e ert( i$ rea! or )er$o"a!* ta"i0!e or i"ta"i0!e.

>. I" the 4a$e o/ 5i/t$ ?ade 0( a No"re No" re$id $ide"t e"t "ot a 4i 4iti9 ti9e" e" o/ the hi!i))i hi! i))i"e$ "e$ 6Se6Se-.. 171 6>8* NIR NIR4 4 a$ a3e"ded8 • •

2. What do"atio"$ are ta% e%e3)t& A. I" the 4a$e o/ 5i/t$ 3ade 0( a Re$ e$id ide" e"tt 6S 6See-.. 17 171 1 6A 6A8* 8* NI NIR R4 a$ a3e"ded8 •

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Do+rie$ or do"atio"$ 3ade o" a--ou"t o/  3arri 3ar riae ae 0e/ 0e/or ore e it$ -e!e0ratio" or +ithi" o"e (ear ther therea/t ea/ter* er* 0( )are"t$ to ea-h o/  their !eiti3ate* re-o re -o"i9 "i9ed ed "at "atura ura!* !* or ado ado)te )ted d -hi -hi!dr !dre" e" to the e%te"t o/ the r$t 17*777 5i/t$ 3ade to or /or the u$e o/ the Natio"a! 5o'er"3e" 5o'er"3e"tt or a"( e"tit( -reated 0( a"( o/ it$ ae"-ie$ +hi-h i$ "ot -o"du-ted /or )rot* or to a" a"( ( )o! o!iiti ti-a! $u0d $u 0di' i'i$ i$io io" " o/ th the e $aid 5o'er"3e"t 5i/t 5i /t$ $ i" /a /a'o 'orr o/ a" edued u-at atio io"a "a!! a"d; a" d;or or -harita0!e** re!ii -harita0!e re!iiou$* ou$* -u!tu turra! or $o-ia! +e!/are +e!/ are -or)o -or)orat ratio"* io"* i"$titutio"* a--redited "o" o'er"3e"t ora"i9atio"* tru$t or )hi!a"tro)hiora"i9atio" or re$ea re $earr-h h i"$ i"$tit tituti utio" o" or ora"i9atio"* )ro' )r o'id ided ed "o "ott 3o 3orre tha" <7= o/ $aid i/t$ +i!! 0e u$ed 0( $u-h do"ee /or ad3i"i$tratio" )ur)o$e$

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5i/t$ 3ade to or /or the u$e o/ the Natio"a! 5o'er"3e" 5o'er"3e"tt or a"( e"tit( -reated 0( a"( o/ it$ ae"-ie$ +hi-h i$ "ot -o"du-ted /or )rot* or to a" a"( ( )o! o!iiti ti-a! $u0d $u 0di' i'i$ i$io io" " o/ th the e $aid 5o'er"3e"t 5i/t 5i /t$ $ i" /a /a'o 'orr o/ a" edued u-at atio io"a "a!! a"d; a" d;or or -harita0!e* re!ii re!iiou$* ou$* -u!tura! or $o-ia! +e!/are +e!/ are -or) -or)orat oratio"* io"* i"$titutio"* a--redited "o" o'er"3e"t ora"i9atio"* tru$t or )hi!a"tro)hiora"i9atio" or re$ea re $earr-h h i" i"$ti $titut tutio" io" or ora"i9atio"* )ro' )r o'id ided ed "o "ott 3o 3orre tha" <7= o/ $aid i/t$ +i!! 0e u$ed 0( $u-h do"ee /or ad3i"i$tratio" )ur)o$e$

4. Ta% 4redit /or Do"or@$ Ta%e$ aid to a Forei" 4ou"tr( 6Se-. 171 648* NIR4 a$ a3e"ded8 •

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I" 5e"era!.  The ta% i3)o$ed 0( thi$ Tit!e u)o" u) o" a do do" "or +ho +a$ +a $ a -it itii9e" or a re$id re $ide"t e"t at the ti3 ti3e e o/ do" do"ati atio" o" $ha $ha!! !! 0e -re -r edited +ith the a3ou"t o/ a"( do"o do "or@ r@$ $ ta ta% % o/ a" a"( ( -hara-ter a"d de$-ri)t de$ri)tio" io" i3)o i3)o$ed $ed 0( the authorit( o/ a /orei" -ou"tr( -ou"tr(.. Li3itatio"$ o" 4redit.  The a3ou"t o/ the -red -r edit it ta ta e" u" u"de derr thi$ Se-tio" $ha!! 0e $u0, $u 0,ee-tt to ea ea-h -h o/ 

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FREQUENTLY ASKED QUESTIONS: DONORS TAX the /o!!o+i" !i3itatio"$:  The a3ou"t o/ the -redit i" re$)e-t to the ta% )aid to a"( -ou"tr( $ha!! "ot e%-eed the $a3e )ro)ortio" o/ the ta% aai"$t +hi-h $u-h -redit i$ tae"* +hi-h the "et i/t$ $ituated +ithi" $u-h -ou"tr( ta%a0!e u"der thi$ Tit!e 0ear$ to hi$ e"tire "et i/t$B a"d  The tota! a3ou"t o/ the -redit $ha!! "ot e%-eed the $a3e )ro)ortio" o/ the ta% aai"$t +hi-h $u-h -redit i$ tae"* +hi-h the do"or@$ "et i/t$ $ituated out$ide the hi!i))i"e$ ta%a0!e u"der thi$ tit!e 0ear$ to hi$ e"tire "et i/t$. <. What are the 0a$e$ i" the 'a!uatio" o/ )ro)ert(& I/ the i/t i$ 3ade i" )ro)ert(* the /air 3aret 'a!ue at that ti3e +i!! 0e -o"$idered the a3ou"t o/ i/t. I" -a$e o/ rea! )ro)ert(* the ta%a0!e 0a$e i$ the /air 3aret 'a!ue a$ deter3i"ed 0( the 4o33i$$io"er o/ I"ter"a! Re'e"ue 6Co"a! a!ue8 or /air 3aret 'a!ue a$ $ho+" i" the !ate$t $-hedu!e o/ 'a!ue$ %ed 0( the )ro'i"-ia! a"d -it( a$$e$$or 6? )er Ta% De-!aratio"8* +hi-he'er i$ hiher. 6Se-.  a"d 172* NIR4 a$ a3e"ded8 I/ there i$ "o 9o"a! 'a!ue* the ta%a0!e 0a$e i$ the /air 3aret 'a!ue that a))ear$ i" the ta% de-!aratio" at the ti3e o/ the i/t . For )ur)o$e$ o/ Do"or#$ Ta%* +hat doe$ the ter3 GNet 5i/tH 3ea"& For )ur)o$e$ o/ the do"or#$ ta%* GNET 5IFTH $ha!! 3ea" the "et e-o"o3i- 0e"et /ro3 the tra"$/er that a--rue$ to the do"ee. A--ordi"!(* i/ a 3ortaed )ro)ert( i$ tra"$/erred a$ a i/t* 0ut i3)o$i" u)o" the do"ee the o0!iatio" to )a( the 3ortae !ia0i!it(* the" the "et i/t i$ 3ea$ured 0( dedu-ti" /ro3 the /air 3aret 'a!ue o/ the )ro)ert( the a3ou"t o/ 3ortae a$$u3ed. 6$e-. 11* RR No. 2277<8

. U"der R.A. No. J1* a"( -o"tri0utio" i" -a$h or i" i"d to a"( -a"didate or )o!iti-a! )art( or -oa!itio" o/ )artie$ /or -a3)ai" )ur)o$e$ $ha!! "ot 0e $u0,e-t to the )a(3e"t o/ a"( i/t ta%. What i"$ta"-e +i!! it 0e $u0,e-t to Do"or#$ Ta%&  Tho$e -o"tri0utio"$ i" -a$h or i" i"d NOT du!( re)orted to the 4o33i$$io" o" E!e-tio"$ 64O?ELE48 $ha!! "ot 0e $u0,e-t to do"or#$ ta%. Se-tio"  648 o/ the Ta% 4ode* a$ a3e"ded* )ro'ide$ that a"( -o"tri0utio" i" -a$h or i" i"d /or -a3)ai" )ur)o$e$ $ha!! 0e o'er"ed 0( R.A. No. J1 or the E!e-tio" 4ode. Se-tio" 1< o/ the R.A. No. J1 $)e-i-a!!( $tate$ that a"( )ro'i$io" o/ !a+ to the -o"trar( "ot+ith$ta"di" a"( -o"tri0utio" i" -a$h or i"d to a"( -a"didate or )o!iti-a! )art( or -oa!itio" o/ )artie$ /or -a3)ai" )ur)o$e$* du!( re)orted to the 4o33i$$io" $ha!! "ot 0e $u0,e-t to the )a(3e"t o/  a"( i/t ta% 6do"or#$ ta%8. A--ordi"!(* the >IR -a" i3)o$e do"or#$ ta% o" -o"tri0utio"$ o/ thi$ "ature. 6Q1* R?4 No. <2778 . For )ur)o$e$ o/ Do"or#$ Ta%* i$ a !ea!!( ado)ted -hi!d -o"$idered $tra"er& A !ea!!( ado)ted -hi!d i$ e"tit!ed to a!! the riht$ a"d o0!iatio"$ )ro'ided 0( !a+ to !eiti3ate -hi!dre"* a"d there/ore* do"atio" to hi3 $ha!! "ot 0e -o"$idered a$ do"atio" 3ade to $tra"er. 6$e-. 17* RR No. 2277<8 J. For )ur)o$e$ o/ Do"or#$ Ta%* are do"atio"$ 0et+ee" 0u$i"e$$e$ -o"$idered do"atio"$ 3ade 0et+ee" $tra"er$& Do"atio" 3ade 0et+ee" 0u$i"e$$ ora"i9atio"$ a"d tho$e 3ade 0et+ee" a" i"di'idua! a"d a 0u$i"e$$ ora"i9atio" $ha!! 0e -o"$idered a$ do"atio" 3ade to a $tra"er. 6$e-. 17* RR No. 2277<8

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FREQUENTLY ASKED QUESTIONS: DONORS TAX . Are ratuitou$ do"atio"$ to Mo3eo+"er$# A$$o-iatio"$ $u0,e-t to Do"or#$ Ta%& 5i/t$* do"atio"$* a"d other -o"tri0utio"$ re-ei'ed 0( the Mo3eo+"er$# A$$o-iatio"$ 6A$$o-iatio"$8 are $u0,e-t to the )a(3e"t o/ do"or#$ ta% )ur$ua"t to Se-tio"  a"d  o/ the Ta% 4ode* a$ a3e"ded. E"do+3e"t or i/t$ re-ei'ed 0( $u-h a$$o-iatio"$ are "ot e%e3)t /ro3 do"or#$ ta% -o"$ideri" that i/t$ to A$$o-iatio"$ are "ot qua!ied /or e%e3)tio" u"der Se-tio" 1716A86<8 o/ the Ta% 4ode. 6II* R?4 No. < 271<8 . I$ a" o"erou$ do"atio" or do"atio" i" e%-ha"e /or ood$* $er'i-e$ or u$e or !ea$e o/   )ro)ertie$ to Mo3eo+"er$# A$$o-iatio" $u0,e-t to Do"or#$ Ta%& ur$ua"t to R?4 No. 271<* A$$o-iatio"$ are $u0,e-t to the -orre$)o"di" i"ter"a! re'e"ue ta%e$ i3)o$ed u"der the Ta% 4ode o/ 1J o" their i"-o3e o/   +hate'er i"d a"d -hara-ter. I" thi$ reard* -o"tri0utio"$ to a$$o-iatio"$ i" e%-ha"e /or ood$* $er'i-e$ a"d u$e o/ )ro)ertie$ -o"$titute a$ other a$$e$$3e"t$;-hare$ /ro3 a-ti'it( i" e%-ha"e /or the )er/or3a"-e o/  a $er'i-e* u$e o/ )ro)ertie$ or de!i'er( o/ a" o0,e-t. A$ $u-h* the$e /ee$ are i"-o3e o" the )art o/ the a$$o-iatio"$ that are $u0,e-t to i"-o3e ta% u"der Se-tio" 2J o/  the Ta% 4ode* a$ a3e"ded. 6III* R?4 No. <271<8 17. What i$ the )ro)er treat3e"t /or tra"$a-tio"$ i"'o!'i" tra"$/er o/ )ro)ert( other tha" rea! )ro)ert( re/erred to i" Se-tio" 2 6D8 /or !e$$ tha" adequate a"d /u!! -o"$ideratio"&

the -o"$ideratio" $ha!!* /or the )ur)o$e o/ Do"or#$ Ta%* 0e dee3ed a i/t* a"d $ha!! 0e i"-!uded i" -o3)uti" the a3ou"t o/ i/t$ 3ade duri" the -a!e"dar (ear. 6Se-. 177* NIR4* a$ a3e"ded8 11. What e"titie$ are -o"$idered e%e3)ted /ro3 Do"or#$ Ta% u"der $)e-ia! !a+$&  The !i$t 0e!o+ -o"$i$t$ o/ e"titie$ -o"$idered Do"or#$ Ta% e%e3)t u"der $)e-ia! !a+$ i"-!udi"* 0ut "ot !i3ited to the /o!!o+i": •

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Where )ro)ert(* other tha" rea! )ro)ert( re/erred to i" Se-tio" 2 6D8 o/ the NIR4* a$ a3e"ded* i$ tra"$/erred /or !e$$ tha" adequate a"d /u!! -o"$ideratio" i" 3o"e( or 3o"e(#$ +orth* the" the a3ou"t 0( +hi-h the /air 3aret 'a!ue o/  the )ro)ert( e%-eeded the 'a!ue o/ 

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Rura! Far3 S-hoo! 6Se-. 1* R.A. No. 1718 eo)!e#$ Te!e'i$io" Net+or* I"-or)orated 6Se-. 1* R.A. No. 17<78 eo)!e#$ Sur'i'a! Fu"d 6Se-. 1<* R.A. No. 171J8 Aurora a-iE-o"o3i- Co"e a"d Free)ort Authorit( 6Se-. J* R.A. No. 177<8 5ir! S-out$ o/ the hi!i))i"e$ 6Se-. 11* R.A. No. 177J<8 hi!i))i"e Red 4ro$$ 6Se-. * R.A. No. 177J28  Tu00ataha Ree/$ Natura! ar 6Se-. 1J* R.A. No. 177J8 Natio"a! 4o33i$$io" /or 4u!ture a"d the Art$ 6Se-. <* R.A. No. 1778 hi!i))i"e Nor3a! U"i'er$it( 6Se-. J* R.A. No. J8 U"i'er$it( o/ the hi!i))i"e$ 6Se-. 2* R.A. No. 778 Natio"a! Water Qua!it( ?a"ae3e"t Fu"d 6Se-. * R.A. No. 2J8 hi!i))i"e I"'e$tor$ 4o33i$$io" 6Se-. * R.A. No. <78

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FREQUENTLY ASKED QUESTIONS: DONORS TAX •

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Ra3o" ?a$a($a( A+ard Fou"datio" 6Se-. 2* R.A. <J8 hi!i))i"eA3eri-a" 4u!tura! Fou"datio" 6Se-. * .D. <728 I"ter"atio"a! Ri-e Re$ear-h I"$titute 6Art. 628* D 1278  Ta$ For-e o" Mu3a" Sett!e3e"t$ 6Se-. <60868* E.O. 18 Natio"a! So-ia! A-tio" 4ou"-i! 6Se-. * .D. 28 Aqua-u!ture De)art3e"t o/ the Southea$t A$ia" Fi$herie$ De'e!o)3e"t 4e"ter 6Se-. 2* .D. 228 De'e!o)3e"t A-ade3( o/ the hi!i))i"e$ 6Se-. 12* D 278 I"terated >ar o/ the hi!i))i"e$ 6Se-. <* D 118

12. Mo+ do +e deter3i"e the /air 3aret 'a!ue o/ the u"!i$ted $to-$&

I" deter3i"i" the 'a!ue o/ the $hare$* the Ad,u$ted Net A$$et ?ethod $ha!! 0e u$ed +here0( a!! a$$et$ a"d !ia0i!itie$ are ad,u$ted to /air 3aret 'a!ue$. The "et o/ ad,u$ted a$$et 3i"u$ the ad,u$ted !ia0i!it( 'a!ue i$ the i"di-ated 'a!ue o/ the equit(. For )ur)o$e$ o/ thi$ ite3* the a))rai$ed 'a!ue o/ rea! )ro)ert( at the ti3e o/ $a!e $ha!! 0e the hihe$t a3o" the /o!!o+i": 6a8 The /air 3aret 'a!ue a$ deter3i"ed 0( the 4o33i$$io"er* or 608 The /air 3aret 'a!ue a$ $ho+" i" the $-hedu!e o/ 'a!ue$ %ed 0( the ro'i"-ia! a"d 4it( A$$e$$or$* or 6-8 The /air 3aret 'a!ue a$ deter3i"ed 0( I"de)e"de"t A))rai$er. 6RR NO. 271<8 6A""e% U8