Introduction

In the Philippines, the act of donating property to a religious organization is a common practice rooted in philanthropy, faith, and community support. Such donations are governed primarily by the Civil Code of the Philippines (Republic Act No. 386), which outlines the formalities for valid donations. A Deed of Donation serves as the legal instrument that formalizes the transfer of ownership from the donor to the donee, in this case, a religious organization. This article provides a comprehensive overview of the required documents for executing a Deed of Donation to a religious organization, including legal requirements, procedural steps, tax considerations, and potential pitfalls. It is essential to note that while this covers general principles, consulting a licensed attorney is advisable for specific cases to ensure compliance with evolving laws and individual circumstances.

Legal Framework for Donations

Donations in the Philippines are classified as inter vivos (during the donor's lifetime) or mortis causa (effective upon death, akin to a will). For donations to religious organizations, inter vivos donations are typical. Under Article 734 of the Civil Code, a donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another who accepts it.

Religious organizations, such as churches, mosques, temples, or faith-based charities, are often registered as non-stock, non-profit corporations under the Revised Corporation Code (Republic Act No. 11232). They must be duly recognized by the Securities and Exchange Commission (SEC) to legally accept donations. Donations to unregistered entities may face validity issues or tax complications.

Key principles include:

Voluntariness: The donation must be free from coercion.
Capacity: The donor must have legal capacity (e.g., of legal age, sound mind).
Acceptance: The donee must accept the donation.
Formality: Depending on the property type and value, specific formalities apply.

Types of Property and Formality Requirements

The required documents vary based on whether the donated property is movable (personal) or immovable (real).

Movable Property

For donations of movable property (e.g., cash, vehicles, equipment, or personal effects):

If the value is PHP 5,000 or less, an oral donation suffices, but written documentation is recommended for proof (Article 748, Civil Code).
If exceeding PHP 5,000, the donation must be in writing, either in a public or private instrument.
Acceptance can be in the same document or a separate one, but if separate, the donor must be notified in authentic form.

Immovable Property

Donations of immovable property (e.g., land, buildings) must be in a public instrument (notarized deed) to be valid (Article 749, Civil Code). Acceptance must also be in a public instrument, either in the same deed or a separate one notified to the donor. Failure to comply renders the donation void.

Essential Documents for the Deed of Donation

To execute a valid Deed of Donation to a religious organization, the following documents are typically required. These ensure the transaction's legality, enforceability, and compliance with registration and tax laws.

1. The Deed of Donation Itself

Content Requirements: This is the core document. It must include:
- Full names, addresses, and civil status of the donor and the authorized representative of the religious organization (donee).
- A clear description of the property (e.g., for land: technical description, title number, area; for movables: serial numbers, values).
- Statement of the donation's gratuitous nature.
- Conditions or charges, if any (e.g., use for specific religious purposes).
- Acceptance clause by the donee.
- Signatures of the donor, donee representative, and witnesses.
Form: For immovables or high-value movables, it must be notarized (a public instrument). Notarization involves acknowledgment before a notary public, who verifies identities and voluntariness.
Execution: Signed in the presence of at least two witnesses.

2. Proof of Donor’s Ownership and Capacity

Title Documents: For immovable property, the Original Certificate of Title (OCT) or Transfer Certificate of Title (TCT) from the Register of Deeds.
Tax Declarations and Receipts: Current Real Property Tax Declaration and proof of payment of real property taxes.
Appraisal or Valuation: A recent appraisal report if the property's value needs verification for tax purposes.
Identification Documents: Valid government-issued IDs (e.g., passport, driver's license) of the donor to prove identity and capacity.
Special Power of Attorney (SPA): If the donor is represented by an agent.

3. Documents Related to the Religious Organization (Donee)

SEC Registration: Certificate of Incorporation as a non-stock, non-profit corporation, confirming its legal existence and authority to accept donations.
Articles of Incorporation and By-Laws: These outline the organization's purposes, ensuring the donation aligns with its religious objectives.
Board Resolution: A resolution from the organization's board of trustees authorizing the acceptance of the donation and designating a representative to sign the deed.
Tax Exemption Certificate: If applicable, a Certificate of Tax Exemption from the Bureau of Internal Revenue (BIR) under Section 30 of the National Internal Revenue Code (NIRC, Republic Act No. 8424, as amended), which covers religious institutions.
Accreditation: For certain donations, accreditation from the Philippine Council for NGO Certification (PCNC) if claiming donor's tax deductions.
Identification of Representative: IDs and authorization documents for the signatory (e.g., priest, imam, or administrator).

4. Acceptance Documents

If not included in the Deed, a separate Acceptance Letter or Deed of Acceptance, notarized and notified to the donor.

5. Tax-Related Documents

Donor's Tax Return: The donor must file BIR Form 1800 (Donor's Tax Return) and pay donor's tax (6% of the fair market value exceeding PHP 250,000 annually, under the TRAIN Law, Republic Act No. 10963).
Certificate Authorizing Registration (CAR): Issued by the BIR after payment of donor's tax, required for registering the transfer.
Withholding Tax Documents: If applicable, though donations to qualified religious organizations are often exempt.
Value-Added Tax (VAT) or Percentage Tax Exemption: Religious organizations may be exempt, but documentation proves this.

6. Registration Documents

For immovable property: The Deed must be registered with the Register of Deeds in the property's location. Required attachments include the CAR, original title, tax clearances, and payment of registration fees.
For vehicles (movables): Registration with the Land Transportation Office (LTO), including the Deed and proof of transfer.

7. Additional Documents for Specific Cases

Clearance from Encumbrances: If the property has mortgages or liens, a release or clearance from creditors.
Environmental Compliance Certificate (ECC): For certain properties (e.g., land with environmental implications).
Marriage Certificate or Affidavit: If the donor is married, spousal consent may be needed for conjugal property (Family Code, Article 124).
Heirs' Consent: If the donation affects legitime (reserved portions for heirs under Article 886, Civil Code), waivers from compulsory heirs.
Foreign Donor Considerations: If the donor is a foreigner, compliance with restrictions on land ownership (Constitution, Article XII).

Procedural Steps

Preparation: Draft the Deed with all necessary details.
Notarization: Execute before a notary.
Tax Payment: File and pay donor's tax at the BIR.
Obtain CAR: Secure from BIR.
Registration: Submit to Register of Deeds or relevant agency.
Transfer: Update titles and records in the donee's name.

Tax Implications and Benefits

Donations to accredited religious organizations under Section 30(H) of the NIRC are tax-deductible for the donor, up to 10% of taxable income for individuals or 5% for corporations. The organization itself is generally tax-exempt on income from donations if used for religious purposes. However, misuse can lead to revocation of exemptions.

Donor's tax is imposed on the donor, not the donee. Exemptions apply for donations below PHP 250,000 per year or to government entities, but religious organizations qualify for deductions if PCNC-accredited.

Potential Issues and Remedies

Void Donations: Lack of formality, incapacity, or non-acceptance invalidates the deed. Remedy: Re-execute properly.
Revocation: Possible for ingratitude, non-fulfillment of charges, or if the donor becomes impoverished (Articles 760-769, Civil Code).
Fraud or Undue Influence: Courts may annul if proven.
Estate Tax Concerns: If the donation is deemed mortis causa, it may be subject to estate tax.
Compliance with Anti-Money Laundering Laws: Large donations require due diligence under Republic Act No. 9160.

Conclusion

Executing a Deed of Donation to a religious organization in the Philippines requires meticulous preparation of documents to ensure validity, tax compliance, and smooth transfer. By adhering to the Civil Code, Tax Code, and registration requirements, donors can fulfill their charitable intentions while benefiting from legal protections and incentives. This process not only supports religious causes but also contributes to societal welfare. For tailored advice, engaging legal professionals is crucial to navigate nuances and updates in jurisprudence.