Introduction

In the Philippine tax system, donor's tax is imposed on the gratuitous transfer of property by way of gift during the donor's lifetime. Governed primarily by the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No. 10963 (TRAIN Law) and Republic Act No. 11534 (CREATE Law), donor's tax ensures that wealth transfers are subject to fiscal oversight. The tax rate is a flat 6% on the total net gifts exceeding P250,000 in a calendar year, applicable to both residents and non-residents for properties situated in the Philippines.

Timely compliance is critical, as the Bureau of Internal Revenue (BIR) enforces strict deadlines for filing the donor's tax return (BIR Form No. 1800) and remitting payment. The return must be filed, and the tax paid, within 30 days from the date of the donation. Failure to meet this deadline, even by a single day, triggers penalties under the NIRC. This article explores the full spectrum of penalties applicable to a one-day late payment of donor's tax, including surcharges, interest, compromise fees, and potential administrative or criminal consequences. It also discusses calculation methods, exemptions, abatement possibilities, and practical implications within the Philippine legal framework.

Legal Basis for Donor's Tax and Filing Requirements

Donor's tax is outlined in Sections 98 to 104 of the NIRC. Section 98 defines the tax as an excise tax on the privilege of transferring property by gift. The donor is liable for the tax, which must be computed based on the fair market value of the property at the time of donation, less any allowable deductions or exemptions (e.g., the P250,000 annual exemption per donee for gifts to relatives, though the exemption applies per donor calendar year).

Under Revenue Regulations (RR) No. 12-2018 and related issuances, the donor's tax return must be filed with the Revenue District Office (RDO) where the donor is registered or resides. Payment can be made through authorized agent banks, BIR collection agents, or electronic platforms like the Electronic Filing and Payment System (eFPS). The 30-day period is non-extendible, and the date of donation is typically the execution date of the deed of donation or similar instrument.

A one-day delay occurs when the filing and payment fall on the 31st day after the donation. Philippine tax law does not provide a grace period for such delays; penalties accrue immediately upon missing the deadline, regardless of the brevity of the lapse. This strict application stems from the principle of voluntary compliance and the BIR's mandate to enforce revenue collection efficiently.

Civil Penalties: Surcharge and Interest

The primary penalties for late payment are civil in nature, as provided in Sections 248 and 249 of the NIRC.

Surcharge

Section 248 imposes a surcharge for failure to pay the tax on time:

A 25% surcharge is added to the tax due if the delay is due to negligence or non-fraudulent reasons.
This increases to 50% if the BIR determines the failure was willful or fraudulent.

For a one-day late payment, the 25% surcharge typically applies, as short delays are seldom classified as fraudulent unless evidence of intent exists (e.g., repeated violations). The surcharge is computed on the basic tax amount before interest.

Example Calculation: Suppose a donor makes a gift valued at P1,000,000, resulting in a donor's tax of P45,000 (6% of P750,000 after the P250,000 exemption). A one-day delay incurs a 25% surcharge of P11,250 (0.25 × P45,000), making the total liability P56,250 before interest.

Interest

Section 249 mandates deficiency interest on the unpaid tax, including surcharge, at a rate of 12% per annum (effective from January 1, 2018, under RR No. 21-2018, which aligned it with double the legal interest rate set by the Bangko Sentral ng Pilipinas). Interest accrues from the day after the due date until full payment.

For a one-day delay, interest is calculated as follows:

Daily interest rate: 12% / 365 ≈ 0.0328767% per day.
Interest amount: (Tax due + Surcharge) × Daily rate × Number of days late.

Using the previous example: Interest on P56,250 for one day is approximately P18.49 (P56,250 × 0.000328767 × 1). Thus, the total payment would be around P56,268.49.

While the interest for one day is negligible, it demonstrates the compounding nature of penalties. If payment is further delayed, interest continues to accumulate daily.

Compromise Penalties

Under Section 204 of the NIRC and RR No. 7-2018, the BIR Commissioner may compromise civil penalties for violations such as late payment. Compromise penalties are administrative fines that can be settled in lieu of criminal prosecution or higher assessments.

For donor's tax delays:

The minimum compromise penalty for late filing/payment is P1,000 for individuals (or P2,000 for corporations), but it scales based on the tax amount and circumstances.
For minor delays like one day, the BIR may assess a compromise fee ranging from P200 to P5,000, depending on the RDO's discretion and the taxpayer's compliance history.

Compromise is not automatic; the taxpayer must apply via a letter to the BIR, providing justifications (e.g., excusable negligence like illness or force majeure). Approval is case-by-case, and for one-day lates, it is often granted if the taxpayer has a clean record, as the BIR prioritizes collection over litigation for minor infractions.

Administrative and Criminal Consequences

Beyond monetary penalties, late payment can lead to administrative actions:

Assessment and Collection: The BIR may issue a Preliminary Assessment Notice (PAN) followed by a Formal Letter of Demand (FLD). If unpaid, this escalates to enforced collection via levy, garnishment, or sale of property (Sections 205-218, NIRC).
Audit Scrutiny: A one-day delay might flag the donor for broader audit, potentially uncovering other discrepancies in the donation (e.g., undervaluation of property).
Impact on Clearances: Delays can hinder obtaining Tax Clearance Certificates required for property transfers or business permits.

Criminal penalties apply under Section 255 if the failure is willful, involving fines from P10,000 to P50,000 and/or imprisonment from 1 to 10 years. However, for a genuine one-day oversight without intent to defraud, criminal charges are rare. Prosecution requires evidence of willfulness, and short delays typically do not meet this threshold unless part of a pattern.

Abatement, Waiver, and Relief Measures

The NIRC provides relief options:

Abatement of Penalties (Section 204): The BIR may abate surcharges and interest if the delay results from reasonable cause (e.g., natural calamities under RR No. 4-2009) or if payment would cause undue hardship.
Installment Payment: For larger amounts, taxpayers may request installment plans, but penalties still accrue until full settlement.
Voluntary Disclosure Program (VDP): Under RR No. 21-2020 (as extended), taxpayers can voluntarily pay delinquent taxes with reduced penalties, though this is more for undeclared taxes than minor delays.
Tax Amnesty: Periodic amnesties (e.g., under RA 11213) have waived penalties for past delinquencies, but these are time-limited and not ongoing.

For one-day lates, taxpayers are encouraged to pay immediately and file a request for abatement, citing excusable reasons. Judicial relief via the Court of Tax Appeals (CTA) is possible if the BIR denies abatement unreasonably, but this is costly and time-consuming.

Practical Considerations and Best Practices

In practice, a one-day delay often arises from miscalculating the 30-day period (e.g., excluding weekends or holidays, though the period includes them unless the last day falls on a non-working day). Taxpayers should use the BIR's e-services to avoid postal delays.

To mitigate risks:

File and pay electronically via eFPS or eBIRForms for instant confirmation.
Maintain records of the donation date and proof of payment.
Consult a tax professional or CPA for complex donations involving real property, which require notarization and may involve coordination with the Register of Deeds.

Non-residents face similar penalties but must file through a Philippine representative. For donations to exempt entities (e.g., government or accredited NGOs), no tax is due, but late filing of the return (if required) still incurs penalties.

Conclusion

A one-day late payment of donor's tax in the Philippines, while seemingly minor, attracts the full weight of NIRC penalties, including a 25% surcharge, 12% annual interest (pro-rated daily), and potential compromise fees. These measures underscore the importance of strict compliance to support national revenue goals. Taxpayers facing such situations should promptly settle obligations and seek BIR relief where applicable to minimize financial impact. Understanding these rules promotes better tax planning and avoids escalation to administrative or criminal proceedings. For personalized advice, consulting with a qualified tax expert or the BIR is recommended.