Unexplained parental gifts
The tax administration has identified numerous cases of suspicious concessions of cash
The tax administration has identified thousands of cases of parental benefits with money from the mattress.
That is, parents deposited cash into their children’s bank accounts, while the legislation explicitly states that parental benefits must be made by bank transfer or bank check. In all these cases the tax office assessed a tax of 10%.
At the same time, donations of sums of money were identified from brother to brother, where no tax-free limit applies and, in fact, because the origin of the money was not justified, in addition to the donation tax (20% on the amount from brother to brother), fines were also imposed for the increase of property from an unknown source.
Of the thousands of cases that have been examined by both the tax authorities and the Dispute Resolution Directorate, taxpayers have been found to try to circumvent the legislation with a triangular transaction.
The circumvention of the tax-free donation provision (amounting to 800,000 euros) was found through a triangular donation from sister to brother through mother: The sister donated to the mother and the latter to the brother, which is prohibited unless a period of at least six months has passed.
In particular, the law states that the time elapsed between successive donations is critical. If this is short, no longer than six months, there is a strong indication that, in the first place, the successive donations have been made for this purpose and, since the purpose of circumvention is also substantiated by the remaining evidence and facts, the donation tax is imposed on the last (real) recipient, as if the donation had been made directly by the real donor to its final beneficiary.
Conversely, if a sufficient period of time elapses between successive donations – over six months – it is concluded that the successive donations have not been made with the purpose of circumventing the relevant provisions, unless the auditing authority documents with specific data on the circumvention thereof.
