A Philippine legal-transaction guide for corporate-to-corporate donations of land/buildings, from corporate authority and deed validity to BIR compliance and Registry of Deeds (RD) registration.

1) The transaction in one sentence

A donation of real property between corporations is a gratuitous transfer of ownership from a corporate donor to a corporate donee that must comply with:

Civil Code rules on donations (validity and formalities),
corporate law requirements (authority/approvals and fiduciary constraints),
tax rules (donor’s tax, documentary stamp tax, local transfer tax, and possible VAT/other consequences in special cases), and
land registration procedures (RD registration under the Torrens system) so the donee can obtain a new title.

2) Core legal framework (what governs)

A. Civil Code (Donations)

Key points that drive validity and enforceability:

Donation: an act of liberality where the donor disposes of a thing in favor of the donee who accepts it.
Donations of immovable property (land/buildings) require strict formalities; otherwise, they are void.

B. Revised Corporation Code (RCC) and corporate principles

Because the parties are corporations:

The act must be within corporate powers and authorized by proper corporate action (board, and sometimes stockholders/members).
Corporate property is held for corporate purposes; directors/officers must observe fiduciary duties (care, loyalty) and avoid wasting corporate assets.

C. Tax laws and regulations (NIRC + implementing rules)

A real property donation typically implicates:

Donor’s Tax (national tax)
Documentary Stamp Tax (DST) on conveyance documents
Local Transfer Tax (provincial/city/municipal)
Registration fees (RD)
Possible VAT/other taxes in specialized fact patterns (not “typical,” but important to screen)

D. Property registration laws (PD 1529 / Torrens system)

RD registration is the mechanism to issue a new Transfer Certificate of Title (TCT) in the donee’s name and protect the donee against third parties.

3) Threshold issue: Can a corporation “donate” real property at all?

A. Corporate capacity and purpose

A corporation can generally donate if:

The donation is authorized and not prohibited by its Articles of Incorporation / bylaws, and
It is for a proper corporate purpose or otherwise permissible under corporate powers.

Risk area: a donation that looks like pure giveaway with no corporate rationale may be attacked as:

Ultra vires (beyond powers), or
Corporate waste / breach of fiduciary duty (especially if insiders benefit, or if it’s effectively a disguised distribution).

B. Who must approve? (Board vs. Stockholders/Members)

At minimum, expect:

Board Resolution approving the donation and authorizing signatories.

Stockholder/member approval may be required when the donation amounts to disposition of all or substantially all corporate assets (or a large portion essential to operations). When in doubt, corporations commonly secure:

Board approval, and
Stockholders’ approval at the required vote threshold, documented in a Secretary’s Certificate.

C. Special scrutiny: related-party donations

If the donee is related (same owners, common directors, affiliate, parent/subsidiary), the donation should be vetted as a conflict-of-interest or self-dealing risk. Best practice:

Full disclosure, fairness basis, abstention of interested directors where appropriate, and documentary support of corporate benefit/rationale.

4) Civil Code essentials: when a donation of land/building is valid

A. The mandatory form (immovable property)

For a donation of immovable property to be valid:

It must be in a public instrument (a notarized deed).
The deed must specify the property donated and the burdens/charges the donee assumes (if any).
The donation must be accepted by the donee:
- Either in the same deed, or
- In a separate public instrument, which must be properly notified to the donor in authentic form.

If these formalities are not met, the donation is typically void, not merely unenforceable.

B. Acceptance is not optional

No acceptance = no perfected donation. For a corporate donee, acceptance must be by an authorized representative, supported by corporate authority (board resolution).

C. Present vs. future property

Donations must generally involve property the donor can lawfully donate and dispose of. Practical checklist: donor must be the registered owner, with capacity and authority to convey.

D. Conditions and burdens (donation “with conditions”)

A donation may be subject to conditions (e.g., property must be used for a specified purpose). These conditions should be:

Written clearly in the deed,
Objective and enforceable, and
Not contrary to law, morals, public policy.

Conditions can also affect tax treatment and ongoing compliance (e.g., reversion clauses).

5) Due diligence before drafting the deed (high-stakes steps)

A. Title and lien checks

Before signing:

Obtain the owner’s duplicate TCT and a Certified True Copy (CTC) from the RD.
Check for: mortgages, annotations, adverse claims, lis pendens, encumbrances, restrictions, easements.
If mortgaged: confirm whether mortgagee consent is required and whether donation would breach covenants.

B. Identity, authority, and signatory verification

For both corporations:

SEC registration and current corporate existence
Articles/bylaws provisions relevant to asset transfers
Board/stockholder resolutions and incumbency/secretary’s certificate
Valid government IDs of signatories and notarial requirements

C. Property classification and special clearances

Depending on the property:

If agricultural land: check for agrarian restrictions, DAR coverage issues, and any required clearances.
If condominium: confirm CCT, condo corp requirements, and association clearances.
If subject to development, special zones, or restrictions: check governing instruments.

D. Real property tax status

Ensure RPT is updated; delinquency can block local tax clearances and RD processes.

6) The Deed of Donation: what it should contain (corporate-to-corporate)

A well-prepared deed for RD/BIR acceptance usually includes:

Parties: corporate names, SEC details, principal office addresses.
Authority recitals: board resolutions (and stockholder approval if applicable).
Description of property: TCT/CCT number, technical description, location, area.
Statement of donation: clear gratuitous transfer.
Acceptance: explicit, with authorized corporate signatory.
Burdens/charges: who pays taxes/fees; any assumed obligations; any conditions.
Warranties/representations: ownership, authority, no undisclosed liens, etc.
Tax/fee allocation: practical allocation clause (note: allocation doesn’t change who is legally liable for certain taxes, but it governs reimbursement between parties).
Notarial acknowledgment: compliance with notarization rules.

Attachments commonly referenced:

Secretary’s Certificate (donor)
Secretary’s Certificate (donee)
Board and/or stockholder resolutions
IDs and signatory proof

7) Taxes and government filings (typical Philippine path)

A. Donor’s Tax (primary national tax)

A donation of real property generally triggers donor’s tax, computed on the net gift (after allowable deductions/exemptions, if any). For corporations, do not assume “corporations are exempt”—they are not automatically exempt.

Valuation base (common rule of thumb in practice): BIR will look to prescribed valuation standards for real property transfers (often involving zonal value and/or fair market value used for tax purposes). The exact base used in assessments can be technical; what matters operationally is that the BIR will require documents and compute the tax based on its rules.

Filing and payment: done through the donor’s tax return process with required attachments.

Possible exemptions: If the donee is the government or an accredited charitable/qualified entity, exemptions may apply—but a standard corporation-to-corporation donation is commonly taxable unless it falls under a statutory exemption.

B. Documentary Stamp Tax (DST)

A deed transferring real property generally triggers DST (even in gratuitous transfers, the document evidencing the transfer is typically subject to DST under rules on conveyances).

C. Local Transfer Tax

Cities/municipalities/provinces typically impose a transfer tax on transfers of real property. Requirements and rates vary by locality; you usually need:

notarized deed,
BIR proof (often eCAR/CAR), and
title/tax declaration documents.

D. Other possible tax exposures (screening items)

Depending on the donor’s business and the property’s character:

VAT “deemed sale” or VAT on real property issues can arise if the donor is in the real estate business and the property is treated as inventory/held primarily for sale or lease in the course of trade or business.
Income tax is not normally imposed on a pure donation as a sale, but classification and regulatory treatment can complicate outcomes in edge cases.
Withholding taxes are generally a sale/lease concern; donations typically center on donor’s tax + DST, but always screen the facts.

E. The BIR clearance that unlocks registration: CAR/eCAR

Before the RD transfers title, it typically requires BIR clearance (commonly referred to as CAR/eCAR) evidencing that appropriate taxes have been paid and the transfer is cleared for registration.

8) Registration at the Registry of Deeds (RD): the title transfer stage

A. Why RD registration matters

Between the parties, the deed may bind them once validly executed and accepted.
But for Torrens property, registration is the operative act that updates the public registry and allows issuance of a new TCT/CCT to the donee, protecting against third-party claims.

B. Typical RD documentary requirements (may vary by RD)

Commonly requested:

Owner’s duplicate title (TCT/CCT)
Notarized Deed of Donation
BIR CAR/eCAR + proofs of tax payments (donor’s tax, DST)
Transfer Tax receipt and local treasurer certifications
Tax clearance / RPT payment proof
Secretary’s Certificates / corporate authorizations
Valid IDs and notarial compliance documents
If applicable: special clearances (condo corp, DAR, etc.)

C. RD process flow (practical)

Submit documents to RD
RD evaluates and computes fees
Pay RD fees
RD cancels old title and issues new title in the donee corporation’s name
RD releases new owner’s duplicate title to authorized representative

D. Common RD pitfalls that cause delays

Missing or defective acceptance language (Civil Code defect)
Incomplete corporate authority documents
Inconsistent names/addresses across deed, SEC records, and certificates
Unpaid/uncleared taxes or missing CAR/eCAR
Title issues (lost owner’s duplicate, adverse claim, mortgage without required consent)

9) Post-registration: updating local records and practical housekeeping

A. Assessor’s Office: new Tax Declaration

After RD issuance of the new title, the donee should update:

Tax Declaration in the local Assessor’s Office
Business records for RPT billing

B. RPT billing and compliance

Ensure RPT is billed to the donee and that payment references are correct to avoid future penalties or clearance issues.

C. Accounting and corporate records

For donor: derecognize asset; ensure board minutes reflect rationale. For donee: recognize donated asset (often at fair value per accounting policies), with supporting documentation.

10) Structuring options and clauses (what parties commonly negotiate)

A. Allocation of costs

Common allocation clauses specify who bears:

donor’s tax, DST, local transfer tax, RD fees, notarial fees, documentary costs.

B. Representations and warranties

For smoother tax and registration:

donor warrants ownership, authority, and absence of undisclosed encumbrances;
donee warrants authority to accept and capacity to own.

C. Conditions, reversion, and use restrictions

If the donation is mission-driven (e.g., property must be used for a project), parties often add:

use restriction clause,
reversion clause if condition fails,
timelines and reporting.

Be careful: overly vague conditions invite disputes and can complicate registration and later conveyances.

11) Special situations that change the analysis

A. Donation of “substantially all assets”

Expect enhanced corporate approvals and heightened fiduciary scrutiny.

B. Property under mortgage / encumbrance

Donation may be possible, but:

mortgage annotations remain,
lender consent may be required by contract, and
donee may need to assume obligations (explicitly stated).

C. Condominium units

CCT transfer plus condominium corporation/association clearance requirements may apply.

D. Properties with agrarian or land-use constraints

Agrarian reform coverage and land classification issues can block or complicate transfers.

E. Cross-border elements

If one corporation is foreign or there are nationality restrictions involved (e.g., land ownership rules), additional screening is required.

12) A practical end-to-end checklist (corporation-to-corporation donation)

Phase 1 — Authority and diligence

☐ Confirm donor title ownership and encumbrances (CTC from RD)
☐ Confirm RPT status and obtain local tax clearances
☐ Determine if donation is substantially all assets (need stockholder approval?)
☐ Prepare board/stockholder resolutions + Secretary’s Certificates (donor & donee)

Phase 2 — Documentation

☐ Draft Deed of Donation with complete property description and burdens
☐ Include explicit corporate acceptance
☐ Notarize deed with proper signatories and IDs

Phase 3 — Tax compliance

☐ File donor’s tax return and pay donor’s tax (if applicable)
☐ Pay DST
☐ Secure BIR CAR/eCAR
☐ Pay local transfer tax and obtain receipts/certificates

Phase 4 — RD registration

☐ Submit deed + owner’s duplicate title + CAR/eCAR + tax receipts + clearances
☐ Pay RD fees
☐ Obtain new title in donee’s name

Phase 5 — Post-registration

☐ Update Tax Declaration at Assessor’s Office
☐ Update corporate books/accounting and asset registers
☐ Confirm RPT billing details going forward

13) Key takeaways (what “makes or breaks” these donations)

Civil Code formalities (public instrument + acceptance) are non-negotiable for immovables.
Corporate authority must be clear, documented, and appropriate to the asset magnitude.
BIR clearance (CAR/eCAR) is typically the gating item before RD will transfer title.
RD registration is essential to obtain the new title and protect the donee against third parties.
Tax results are often straightforward (donor’s tax + DST + local transfer tax), but edge cases (inventory property, real estate business, restrictions, liens) can materially change outcomes.