Law Summary
Certification Requirement and Definitions
- Exemption claims require certification from the Ministry of Agrarian Reform that:
- The donee is a tenant-farmer, actual tiller, and/or occupant of the land donated.
- The donated land does not exceed the limits of a family-size farm and/or homelot as defined by existing laws and guidelines.
- The donation conforms with the agrarian reform program.
- The Ministry must issue certification within sixty days of the request.
- The security of tenure of any tenant must not be violated if the land is tenanted.
Restrictions on Transfer of Donated Land
- Lands donated under this Act may only be transferred:
- By hereditary succession, or
- To the government.
- Any other transfer violates the law and subjects the donee to donor's tax liability.
Waiver of Compensation and Tax Relief
- Landowners covered by OLT or their successors may avail exemption if they waive their right to receive full or partial compensation from the Land Bank or farmer-beneficiary.
- The tenant-farmer is relieved from paying the waived compensation amount.
- Certification from the Ministry of Agrarian Reform must confirm that the compensation waiver complies with Presidential Decree No. 27 and its implementing rules.
Income Tax Deduction for Donation and Waiver
- Donors may deduct from taxable income 50% of the fair market value of the donated property as reflected in the tax declaration a year prior to donation.
- If the donation pertains to the waiver of compensation under Section 3, the donor may deduct the entire amount waived.
Rulemaking Authority
- The Minister of Finance, with consultation from the Minister of Agrarian Reform and recommendation from the Commissioner of Internal Revenue, shall promulgate rules and regulations for the law's implementation.
Severability Clause
- Declaration of any provision as unconstitutional does not affect the validity of the other provisions.
Effectivity
- The law takes effect upon its approval.