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Understanding Donor's Tax in the Philippines
Donor's tax in the Philippines is an excise tax applied to the transfer of property through gifts made during a person's lifetime. This tax is not a property tax but is specifically for gifts given without legal obligation. The main purpose of donor's tax is to prevent people from avoiding estate and income taxes by transferring property as gifts. It ensures that even if someone gives away their property while alive, they still contribute to the tax system. This tax applies to both direct and indirect gifts, whether the property is real, personal, tangible, or intangible.