Double Assessment of Donor’s Tax on a Deed of Donation in the Philippines
A complete doctrinal, procedural, and practical guide
1. The legal setting
1.1 What is donor’s tax?
Under Title III (Estate and Donor’s Taxes) of the National Internal Revenue Code of 1997 (NIRC), donor’s tax is a national tax on the gratuitous transfer of property during the donor’s lifetime. The TRAIN Law (Republic Act No. 10963, effective 1 January 2018) recast donor’s tax into a single 6 % rate on the net gifts made each calendar year in excess of ₱ 250,000, regardless of relationship between donor and donee, with special rules for non-resident aliens and intangible property.
1.2 Filing and payment basics
Return (BIR Form 1800) – to be filed within 30 days after each donation.
Payment – due upon filing.
Valuation date – always the date of the gift (not the date of later assessment).
Prescription – the Bureau of Internal Revenue (BIR) must assess within
- 3 years from filing, or
- 10 years from the date the return was due or filed if no return was filed, or if the return is false or fraudulent.
2. Understanding “assessment” and why a double assessment may arise
2.1 A primer on BIR assessments
The BIR’s power to assess is found in NIRC § 6(A). For donor’s tax, the usual due-process sequence is:
| Stage | Document | Statutory or regulatory anchor |
|---|---|---|
| 1 | Letter of Authority (LOA) | RMO 69-2010, RRevenueAuditManual |
| 2 | Notice of Discrepancy (NOD) | RR 07-2018 |
| 3 | Preliminary Assessment Notice (PAN) | NIRC §228, RR 12-99 |
| 4 | Formal Letter of Demand / Final Assessment Notice (FLD/FAN) | ibid. |
Only the FLD/FAN—served on the taxpayer and stating a definite amount—is an “assessment” in the strict sense. There must be only one FLD/FAN per taxable event; otherwise, the constitutional requirement of due process is breached.
2.2 What counts as a “double assessment”?
Any second (or third) distinct FLD/FAN covering the same donation, the same taxable base, and the same period is a double assessment. It is conceptually different from:
- Double taxation – imposition of two different taxes on the same subject by the same taxing authority for the same purpose (e.g., donor’s tax and value-added tax).
- Supplemental assessment – a single FLD/FAN amended before becoming final and executory.
3. Typical scenarios that trigger double assessment in deeds of donation
| Scenario | How double assessment happens | Key legal issues |
|---|---|---|
| (A) Separate assessments on spouses over conjugal property | BIR treats the husband and wife as separate donors and issues two FLD/FANs, each on 100 % of the property donated, instead of 50 % each. | Inflated taxable base; violation of conjugal ownership rules in Art. 96, Family Code; potential void assessments for overreach. |
| (B) Duplicate assessments from different Revenue District Offices (RDOs) | Real property straddles two cities; each RDO asserts jurisdiction and issues its own donor’s-tax assessment. | NIRC §6(C); BIR District Boundaries; principle that situs is where donor is domiciled, not where property lies. |
| (C) Second assessment after protested first assessment | Taxpayer seasonably protests FLD/FAN; while protest is pending, BIR issues a new FLD/FAN on the same donation (sometimes to “cure” a procedural defect). | §228 due-process chain; doctrine that an assessment issued without a valid LOA or after the earlier assessment has become final is void. |
| (D) Assessment against both donor and donee for the same deficiency | Examiner, unsure who is liable, issues an FLD/FAN to donor and to donee as “transferee.” | Only the donor is directly liable (NIRC §98); donee may be liable secondarily if donor fails to pay (NIRC §104). Two FLD/FANs on the same base is double assessment. |
| (E) Assessment plus “verification” assessment by another unit | Large-Taxpayers Service and RDO run parallel cases; a “verification” assessment is followed by a regular FLD/FAN. | Internal BIR coordination rules: only one investigation team may handle a taxable event; subsequent FLD/FAN is void. |
4. Consequences of a double assessment
- Void ab initio – An FLD/FAN issued after a prior, unwithdrawn FLD/FAN covering the same transaction is a nullity, having been issued without authority and in violation of NIRC §228’s single-assessment due-process flow.
- Denial of due process – Taxpayer is forced to respond to multiple, sometimes inconsistent, deficiency amounts.
- Tolling of prescription – In doctrine, a void assessment does not suspend the running of the three-year prescriptive period.
- Potential for double collection – If undetected, BIR may collect twice, prompting unjust-enrichment and solutio indebiti issues under Civil Code Art. 2154.
5. Jurisprudential guidance
While no Supreme Court decision yet squarely uses the label “double assessment” in a donor’s-tax case, several cases flesh out the controlling principles:
| Case | G.R. No. / Date | Held |
|---|---|---|
| Commissioner of Internal Revenue v. Metro Star Express, Inc. | G.R. No. 185371 (9 Dec 2015) | BIR must strictly follow §228 due-process steps; any FLD/FAN issued without a PAN is void. Implication: A second FLD/FAN attempting to cure defects in the first is likewise void. |
| Republic v. Court of Appeals (Pascor Realty) | G.R. No. 128106 (29 June 1999) | “There must be a single assessment and demand;” a second assessment without withdrawing the first cannot stand. |
| AT&T Communications Services Phils. v. CIR | CTA EB No. 1396 (29 Sept 2016) | Two FLD/FANs on the same period constitute a violation of due process and render both assessments void. |
| North Naguilian Electric Cooperative v. CIR | CTA Case No. 9275 (29 May 2024) | Where BIR issued an LOA and a separate “verification notice,” the resulting duplicate FLD/FANs were cancelled for lack of authority. |
| CIR v. CA & Phoenix Iron & Steel | G.R. No. 119761 (29 Jan 1999) | Reinforces the rule that any assessment must be definite and demandable; ambiguity or multiplicity defeats enforceability. |
CTA (Court of Tax Appeals) decisions, though not binding on third parties, are persuasive and routinely followed by the BIR and courts.
6. Administrative and judicial remedies
| Stage | Remedy | Timeline |
|---|---|---|
| Upon receipt of FLD/FAN | Protest (request for reconsideration or reinvestigation) under NIRC §228 | 30 days from receipt |
| Submission of supporting documents | Completes the protest; else the assessment becomes final | 60 days from filing of protest |
| BIR decision (FDDA) | If adverse or not issued within 180 days, taxpayer may elevate | 180 days counted from submission or lapse |
| Appeal to CTA Division | Petition for Review | 30 days from decision or lapse of 180 days |
| Motion to cancel duplicate assessment | May be raised as a ground in the protest or CTA petition | Anytime within the administrative or judicial pleadings |
| Action for refund of erroneously paid donor’s tax | Civil action with CTA | Within 2 years from payment (NIRC §229) |
7. Practical pointers to avoid (or defeat) double assessments
- Ensure proper venue – File the donor’s-tax return in the RDO of the donor’s domicile, not where the property is located, to avoid competing RDO claims.
- Check the LOA number and coverage – If two LOAs reference the same donation, ask BIR in writing to consolidate and issue only one FLD/FAN.
- Demand withdrawal of a superfluous assessment – Before deadlines lapse, formally request cancellation of the second FLD/FAN for being void ab initio.
- Spot valuation overlaps – In conjugal donations, verify that each spouse’s taxable base is only one-half of the property’s fair market value.
- Maintain audit trail – Keep a master file of all BIR notices, stamped-received. The date-received stamp is vital in computing protest periods.
- Invoke solutio indebiti – If you inadvertently paid twice, file a written claim for refund citing Civil Code Art. 2154 and NIRC §229.
- Escalate early – Duplicate assessments are often resolved fastest at the RDO level before docketing with the CTA.
8. Frequently asked questions
| Question | Short answer |
|---|---|
| Can the BIR issue a “supplemental” FLD/FAN for donor’s tax? | Only before the original FLD/FAN becomes final and executory, and only if it states that it supersedes the earlier notice; otherwise it is a double assessment. |
| If both donor and donee receive FLD/FANs, must both protest? | Yes. Each notice is a separate assessment. The donee can invoke secondary liability under §104 and argue prematurity. |
| Does paying under protest waive the defect? | No. Payment does not validate a void assessment; you may still sue for refund within two years from payment. |
| Is double assessment the same as the BIR’s adding surcharge and interest? | No. Surcharge/interest are components of one assessment; they do not create a second assessment. |
| What if the second assessment shows a lower amount? | The proper course is for the BIR to withdraw the first assessment and re-issue only one FLD/FAN; otherwise collection remains unenforceable. |
9. Key take-aways
- One donation, one assessment. Anything more violates due-process rules enshrined in NIRC §228.
- Duplicate FLD/FANs are void. They neither suspend prescription nor confer jurisdiction on the BIR to collect.
- Timely protest and documentation are indispensable—deadlines are jurisdictional.
- Jurisprudence, while still sparse for donor’s tax, treats double assessment no differently from income- or VAT-tax assessments: the constitutional right to due process prevails.
- Preventive compliance—proper filing, valuation, and RDO coordination—is the cheapest antidote to double assessment.
Disclaimer
This article is for informational purposes only and does not constitute legal advice. Consult a Philippine tax professional or legal counsel for advice on specific facts.