The 6% donor's tax on yearly net gifts above the annual exemption.
Donor's tax due
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Taxable gifts
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Annual exemption used
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When a gift becomes taxable
Giving money or property to someone can attract donor's tax, the levy the Bureau of Internal Revenue charges on gifts made during your lifetime. It is the mirror image of estate tax, which applies to what you leave behind. The point of having a donor's tax at all is to stop people from emptying an estate through gifts to dodge the estate tax, so the two rates are deliberately aligned. Not every gift counts, though. Small everyday generosity is not what the rules target. The tax bites once your total giving in a single year crosses an annual threshold.
This calculator works on a calendar-year basis. You enter the total of all the gifts you have made to anyone during the year, and it strips out the tax-free allowance, applies the flat rate to whatever is left, and shows the tax due. It is aimed at parents helping children with a property down payment, relatives passing on cash, and anyone planning a larger transfer who wants to see the cost before they commit. It is not a substitute for the donor's tax return, which has its own rules on valuation and timing.
The exemption that resets every January
Under the TRAIN-law structure the Philippines moved away from the old system that taxed gifts to strangers more heavily than gifts to relatives. The version this tool models is a single flat rate that applies to everyone, relative or not, once your yearly gifts pass a fixed exemption. The rate this calculator applies is 6 percent, and the annual exemption it uses is PHP 250,000 per donor per year. Both figures are stable parts of the design, but they can be revised, so confirm the current rate and threshold with the BIR before you file.
The word that matters is annual. The PHP 250,000 is not a once-in-a-lifetime allowance. It refreshes on the first of January, so the timing of a large gift can change the tax. A transfer split so part lands in December and part in the following January gets two separate exemptions instead of one. That single quirk drives most legitimate donor's-tax planning.
Gifting PHP 1,000,000 to a child in one year
Say a parent gives a child PHP 1,000,000 in cash during the year to help with a deposit, with no other gifts. The tool subtracts the PHP 250,000 exemption, leaving PHP 750,000 of taxable gifts, then applies the rate it uses. Here is the working:
| Step | Amount |
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Notice the effective rate is below 6 percent, because the first PHP 250,000 escapes entirely. The chart shows the gift split into its tax-free slice and the part the 6 percent applies to.
Spreading gifts across years and donors
Because the exemption is per donor per year, two levers can lower the tax legally. The first is time. Giving PHP 250,000 a year for four years uses four exemptions and can pass PHP 1,000,000 free of donor's tax, where one lump sum in a single year would be taxed on PHP 750,000. The second is the number of donors. If both parents give, each has their own PHP 250,000 exemption, so a couple can move PHP 500,000 a year between them before the tax starts. A practical tip: keep dated records and bank trails for each gift, because the BIR computes the tax on the cumulative gifts within the same calendar year, and clean documentation is what proves which year a transfer belongs to.
One edge case trips people up. Gifts of real property are valued at the higher of zonal value and fair market value, not at what you think the property is worth, so a parcel can carry more taxable value than expected. And forgiving a debt, or selling an asset to a relative for far below its value, can be treated as a gift of the shortfall.
When is the donor's tax return due?
The donor's tax return is generally filed and the tax paid within 30 days after each gift is made, not at the end of the year. So a large gift in March and another in September are separate filings, even though they share the same annual exemption when the tax is computed. Check the current filing deadline and form with the BIR.
Are gifts between spouses or to charity taxed?
Donations to qualified charitable, religious, and educational institutions can be exempt or deductible under specific conditions, and certain gifts have their own treatment. The rules carry documentation requirements, so do not assume a transfer is exempt without confirming it qualifies. This calculator models the general flat-rate case on net taxable gifts and does not apply special exemptions.