Donee in Philippine Gift and Donor's Tax
Last Updated: June 13, 2026
tips_and_updatesDefinition
A donee is the person who receives a gift or donation from another person (the donor) in the Philippines. The donee may have tax obligations depending on the value and type of gift received, as governed by the National Internal Revenue Code and BIR regulations.
Under Philippine tax law, a donee is the recipient of any gratuitous transfer of property, money, or other valuable consideration. While the primary tax burden typically falls on the donor through donor's tax under Section 99 of the Tax Code, the donee may also face tax implications. The donee's tax obligations depend on factors such as the gift's value, relationship to the donor, and whether the gift exceeds certain thresholds. BIR Revenue Regulations No. 2-2003 provides detailed guidelines on gift transactions and the responsibilities of both donors and donees.
Detailed Explanation
Definition
A donee is any person who receives a gift, bequest, devise, or transfer of property without adequate and full consideration from another person (the donor). Under the National Internal Revenue Code (NIRC), the donee is the recipient side of a gratuitous transfer. While the donor bears the primary tax obligation through donor's tax, the donee must understand their own potential tax exposure and reporting requirements.
Legal Framework
The NIRC §§24(D) and 100 establish the tax treatment of gifts and donations in the Philippines. The Donor's Tax Law (NIRC §24(D)) imposes a 6% flat tax on the donor for gifts made during their lifetime, regardless of the donee's relationship to the donor. The Estate Tax Law (NIRC §80 et seq.) applies to transfers upon death. The Tax Reform for Acceleration and Inclusion (TRAIN) Law (RA 10963, effective 1 January 2018) unified the donor's tax rate at 6% and removed the previous graduated scale.
Who Can Be a Donee
Any natural person, corporation, partnership, or other entity capable of receiving property may be a donee. This includes family members (spouse, children, parents), unrelated individuals, charitable organizations, educational institutions, and religious groups. The relationship between donor and donee does not affect the donee's tax status, though it may affect the donor's tax computation under certain exemptions.
Donee Tax Obligations
In the Philippines, the donee generally does not pay income tax on the gift received. However, the donee may have reporting obligations if the gift is substantial or if the donee subsequently derives income from the gifted property. For example, if Juan dela Cruz receives ₱500,000 as a gift from his mother, he does not owe income tax on that ₱500,000. However, if the ₱500,000 is invested in a business that generates ₱50,000 annual income, Juan must report and pay tax on the ₱50,000 income (not the original gift).
Annual Exclusion and Exemptions
Under NIRC §24(D), the first ₱250,000 of gifts made by a donor to any donee in a calendar year is exempt from donor's tax. This means a donee can receive up to ₱250,000 per calendar year from a single donor without triggering donor's tax liability. Gifts in excess of ₱250,000 in a single year are subject to the 6% donor's tax, which the donor must pay. Gifts between spouses are fully exempt from donor's tax under NIRC §24(D).
Donee Reporting Requirements
While donees do not file a separate "gift receipt" return, they may be required to disclose substantial gifts on their income tax return (BIR Form 1701) if the gift is material to their financial position or if the BIR inquires. Donees who receive gifts that generate income (e.g., rental property, business assets) must report the income derived from those assets. The BIR may also cross-reference donor's tax returns (BIR Form 1700) with donee records to verify consistency.
Special Cases: Donees of Charitable Gifts
Donees that are charitable, educational, religious, or scientific institutions may be exempt from receiving donor's tax if the donor qualifies for a deduction under NIRC §34(H). However, the donee institution itself must be registered with the BIR as a tax-exempt entity. The donee does not pay tax on the gift, but the donor may claim a deduction (up to certain limits) on their income tax return.
Donee Liability in Case of Donor Default
If the donor fails to pay the donor's tax on a gift, the BIR may pursue collection from the donor's estate or assets. However, the donee is generally not liable for the donor's unpaid tax unless the donee was complicit in tax evasion or fraud. The donee's receipt of the gift does not create a joint and several liability with the donor for the tax obligation.
Practical Implications for Donees
Donees should maintain clear documentation of gifts received, including written evidence of the transfer (deed of gift, bank transfer records, or notarized documents). This protects the donee in case the BIR questions the source of funds or property. Donees should also be aware that gifts of real property may trigger transfer tax obligations (documentary stamp tax, capital gains tax on subsequent sale) even though the donee does not pay donor's tax.
Why it Matters
Donees need to understand their tax position when receiving gifts. While donees typically do not pay income tax on gifts themselves, they may have reporting obligations, and gifts of income-producing assets create ongoing tax duties. Understanding the donee's role helps prevent unintended tax exposure and ensures compliance with BIR requirements when substantial gifts are received.
Examples
01Maria receives ₱200,000 from her father
02Anna receives ₱500,000 real property from her mother
03Juan receives a rental property worth ₱1,000,000
04Charity receives ₱2,000,000 donation
05Spouse receives ₱5,000,000 gift
Common Misconceptions
Misconception
The donee must pay income tax on the gift received.
Reality
No. Under NIRC §24(D), gifts are not taxable income to the donee. The donor pays the donor's tax (6% on amounts over ₱250,000 per year). The donee only pays tax on income generated by the gifted asset.
Misconception
If the donor does not pay donor's tax, the donee is liable.
Reality
No. The donee is not jointly liable for the donor's unpaid tax. The BIR pursues the donor for collection. The donee's only risk is if the BIR questions the gift's legitimacy during an audit.
Misconception
All gifts must be reported to the BIR by the donee.
Reality
Donees do not file a separate gift return. However, substantial gifts may be disclosed on the donee's income tax return if material to their financial position, and the BIR may cross-reference donor's tax returns to verify consistency.
Misconception
Gifts of real property are exempt from all transfer taxes.
Reality
While the donee does not pay donor's tax on the gift itself, the transfer may trigger documentary stamp tax and capital gains tax if the donee later sells the property. The gift itself is not subject to income tax, but subsequent income or gains are.
Misconception
A donee can refuse to accept a gift to avoid tax complications.
Reality
A donee may refuse a gift, but acceptance or refusal does not affect the donor's tax obligation. If the donee accepts, the donee should document the gift to protect against BIR inquiries.
Frequently Asked Questions
No. Under NIRC §24(D), gifts are not taxable income to the donee. The donor pays a 6% donor's tax on gifts exceeding ₱250,000 per calendar year per donee. You only pay tax on income generated by the gifted asset (e.g., rental income, dividends).
The excess over ₱250,000 is subject to 6% donor's tax, which the donor must pay. For example, a ₱500,000 gift triggers 6% tax on ₱250,000 = ₱15,000 donor's tax. You (the donee) do not pay this tax; the donor does.
Generally, no separate gift return is required. However, if the gift is substantial or material to your financial position, you may disclose it on your BIR Form 1701 (income tax return). If the BIR audits the donor, you may be asked to verify the gift.
No. Under NIRC §24(D), gifts between spouses are fully exempt from donor's tax, regardless of amount. A spouse can gift ₱10,000,000 to their partner with no donor's tax liability. The recipient spouse does not owe income tax on the gift.
The BIR pursues the donor for collection of the unpaid tax, interest (12% per annum), and surcharge (25%). The donee is not liable for the donor's unpaid tax unless the donee was complicit in tax evasion. Maintain documentation of the gift to protect yourself.
No. Donees do not claim deductions for gifts received. However, if the donee is a charitable, educational, or religious organization, the donor may claim a deduction under NIRC §34(H) if the organization is registered as tax-exempt with the BIR.
No. Gifts from foreign sources are not subject to Philippine income tax to the donee. However, the donor (if a Philippine resident) may owe donor's tax on gifts made to Philippine residents. Consult your RDO if you receive substantial foreign gifts.
In Practice
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Donees receiving gifts over ₱250,000 in a calendar year should request written proof from the donor showing that donor's tax was paid to the BIR, to avoid being implicated in tax evasion.
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Donees of real property should obtain a certified true copy of the deed of gift and register it with the Registry of Deeds to establish clear ownership and protect against future disputes.
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Donees who receive income-producing assets (rental property, business shares, bonds) must file annual income tax returns reporting the income, even if the original gift was not taxable.
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Donees of charitable gifts to registered non-profit organizations should ensure the organization maintains its tax-exempt status with the BIR to preserve the donor's deduction eligibility.
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Donees should be aware that gifts of foreign currency or foreign property may trigger additional reporting requirements under the Foreign Currency Deposit Act (RA 6426) or the Bangko Sentral ng Pilipinas regulations.
Learn More
Donor Tax Calculator Calculate Tax Owed By Gift Givers
Income Tax Calculator Determine Tax On Gifts Treated As Income
Estate Tax Calculator Calculate Inheritance Tax Obligations
BIR Form 1700 Annual Income Tax Return For Individuals
BIR Form 1701 Annual Income Tax Return For Self Employed
BIR Form 1800 Donor'S Tax Return
Complete Guide To Gift Tax In The Philippines
How To File Donor'S Tax Returns
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Sources & References (3)
Primary sources and the laws, regulations, and official issuances this page relies on. Each citation links directly to the issuing authority’s document.
- LawPhil Project (Arellano Law Foundation). “NIRC §98-101 as amended by RA 10963 — donee / net gift / P250,000 exclusion.” lawphil.net. NIRC of 1997 (RA 8424), Sec. 98-101, as amended by RA 10963. Accessed .
- Bureau of Internal Revenue. “BIR — Donor's Tax (donee, exclusions).” bir.gov.ph. Bureau of Internal Revenue, Donor's Tax. Accessed .