Cash donations: What business and donors need to know

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When individuals or companies choose to give – whether to support a cause, help a community or offer financial assistance – they rarely think about paperwork. Yet donation-related compliance is a key part of Philippine tax administration, and it can affect both legal obligations and potential tax benefits. Recognizing the confusion that often surrounds the rules for cash donations, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) 10-2026 on Feb. 4, 2026.

The RMC aims to clarify the tax treatment, filing process and documentary requirements for cash donations made within the same calendar year. These rules apply whether the donation is given to a private individual, a foundation, a school, an NGO or any other juridical entity.

Reinforcing a core principle: The donor’s responsibility

The RMC reiterates an important principle that sometimes gets overlooked: The donor is responsible for filing the donor’s tax return and paying any donor’s tax due, where applicable.

This duty exists regardless of the type of recipient. Many donors mistakenly assume that cash donations are exempt from filing obligations simply because no property title is involved. The RMC helps eliminate this misconception by clearly outlining the rules, including when tax may apply and what needs to be filed.

Digital filing now mandatory for cash donations

One of the most significant changes introduced by RMC 10-2026 is the requirement that all donor’s tax returns (BIR Form 1800) for purely cash donations must be filed electronically.

Donors can still choose how to pay – either electronically through the BIR’s ePayment channels or manually through authorized agent banks. But the filing itself must now occur through one of the BIR’s digital platforms, such as:

• eBIR Forms facility

• Electronic Filing and Payment System

• Authorized taxpayer service providers

This move aligns with the BIR’s continued efforts toward digital transformation. The shift to electronic filing helps reduce manual errors, ensures quicker processing and supports easier recordkeeping. For organizations with regular CSR initiatives or grant-making activities, adapting internal workflows to meet these digital requirements will be essential to avoid penalties or missed deadlines.

30-day deadline for submitting documentary requirements

In addition to electronic filing, the RMC emphasizes the importance of the timely submission of supporting documents. Donors must submit all required documents within 30 days from the date of the donation.

To help taxpayers comply, the RMC provides a complete list of all the required documents, including acceptable forms of proof. These documents must be filed with the Revenue District Office that has jurisdiction over the donor’s:

• Place of residence (for individual donors), or

• Registered business address (for corporations and other non-individual taxpayers)

Large taxpayers must submit their documents to the appropriate Large Taxpayers Division.

Beyond compliance, these records serve a crucial purpose: they substantiate the donation should the taxpayer wish to claim allowable deductions. These documents serve as evidence for cash donations made to accredited donee institutions under Section 34(H) of the Tax Code to support future claims for deductions from gross income.

This is in addition to the Philippine Council for NGO Certification accreditations issued by the BIR to the donee. Good recordkeeping, therefore, protects both compliance and tax benefits.

No eCAR required for pure cash donations

Perhaps the most welcomed clarification in RMC 10-2026 is the explicit statement that pure cash donations do not require an eCAR. The RMC addresses a long-standing point of confusion: Do cash donations require an electronic certificate authorizing registration (eCAR)? Many believed they did. As clarified by the RMC, they do not.

The eCAR is traditionally required only for the transfer of real property or certain personal property, where ownership must be formally recorded with a government registry (e.g., land titles or vehicle registrations). Because cash does not fall under this category, it does not trigger the eCAR process.

This clarification significantly simplifies the compliance process for donors, particularly for businesses and foundations that frequently extend financial assistance or implement community programs. It removes an unnecessary step and reduces administrative complexity.

Effective immediately: What donors need to do now

The RMC became effective immediately upon publication on Feb. 4, 2026. With its issuance, donors – both individual and corporate – must now ensure that they are aligned with the clarified requirements. The BIR highlights two key responsibilities:

• File donors’s returns electronically, regardless of payment method

• Submit all supporting documents within 30 days, as enumerated in the RMC

These steps, if undertaken, ensure compliance and preserve tax benefits.

What this means for businesses and organizations

For companies and philanthropic institutions, the RMC promotes clarity, predictability and more efficient compliance.

By embracing digital filing and maintaining thorough documentation, organizations can better manage their giving activities, avoid penalties and remain audit-ready.

More importantly, the clarified rules allow donors to focus on what truly matters – supporting people, communities and causes – while navigating compliance with confidence.

Marione Nicole Bugarin is a supervisor from the Tax Group of R.G. Manabat & Co. (KPMG in the Philippines), a Philippine partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The firm has been recognized as a Tier 1 in Transfer Pricing Practice and in General Corporate Tax Practice by the International Tax Review. For more information, you may reach out to Marione Nicole Bugarin or Maria Carmela Peralta through [email protected], social media or visit www.home.kpmg/ph.