All the details of tax-free donations and parental benefits, up to the amount of 800,000 euros, gives the implementing circular of the Independent Authority for Public Revenue, which formally opens the way for the implementation of the measure.
Of particular interest are the clarifications given on the procedure to be followed in order to avoid the phenomenon of fictitious donations sums of money.
As the circular stipulates, the tax office will recognise the a tax-free amount of EUR 800,000, only for donations and parental benefits made through the credit system or any financial institution recognised by the Bank of Greece. The rest will not be accepted.
Specifically, it states that parental provision or donation to persons in category A (parents, children, couples and grandchildren) of any property, as well as parental provision or donation of money, which is carried out by money transfer through financial institutions, subject to tax, which is calculated at a rate of 10%, after deducting a one-off taxable amount of EUR 800,000.
Where the donation is made cash shall not be recognised from the IRS.
Taxpayers should be particularly careful with the «maiden name» and presumption of livelihood in the case of acquisition of a home by the children. The current legal regime provides that based on the objective value and the square footage of the dwelling, the tax authorities calculate a minimum imputed income.
Parents who will donate money to their children bmay be exempt from paying tax but they must be able to prove to the tax authorities the legal way of obtaining the money that they give to their children.
The audit authorities can have a full picture of the amounts of money donated by a person by extracting data from banks as the provision states that «the donation or parental provision of money is carried out by transferring money through financial institutions».
Those who will not be able to justify their «maidenhead» and those who will not be able to cover the presumption of subsistence for the residences (first or secondary) that their parents, spouses or grandparents wrote to them will be found faced with the imposition of extra tax reaching even 44%.
Taxpayers who will make parental benefits or gifts of money or property to their children, spouses, parents or grandchildren will submit a relevant declaration to the competent D.O.Y. indicating their own VAT NUMBER and the VAT number of the recipient.
If it is a monetary amount, the tax authorities will look through the declarations of the person who made the parental gift or donation to see if the amount of the parental gift in cash is covered by the income of past years or the proceeds of the sale of assets in the past and, if not covered, will impose additional income tax.
From the side of the child will be able to claim the donation to justify future expenditure for asset purchases. If it is a property, the person who acquires it will have to cover the presumption of living expenses with the income declared to the tax authorities.
For taxpayers in debt tax-free parental benefits and donations are estimated to be «free gifts».
The existence of overdue debts to the tax authorities, even if these debts have been subject to instalment payment arrangements which are being serviced regularly, does not allow for the obtaining of a tax certificate, which essentially «blocked» the procedures for transfers. Η only solution for these taxpayers is to secure their debts by mortgaging one or more of their properties.
It is recalled that from 1 October, parental gifts in cash up to 800,000 and gifts of up to 800,000 between spouses or parties to cohabitation agreements, or from grandparents to grandchildren or from children to parents are tax-free. This means that the 10% tax is abolished imposed until 1 October. From this limit onwards, a rate of 10% is applied.
