Taxation of Parental Provisions & Donations: Frequently Asked Questions – Short Answers

1. Who pays tax on a parental provision or donation?

The tax is owed by the recipient, i.e. the child in the case of a parental provision or the donee in the case of a donation.

2. Where is the tax return submitted?

To the Tax Office of the donor’s residence, according to his/her AFM.

3. When is the tax return submitted?

The tax return must be submitted within six (6) months of the delivery of the donated asset. There is a possibility to extend the deadline for three (3) months.

4. What are the tax-free limits and taxes?

Category Tax-free limit Tax rate A (Spouse, Children, Grandchildren, Parents) €800,000 10% for the amount exceeding the tax-free limit B (Other descendants and ascendants, Siblings, Uncles, Aunts, Nieces, Nephews) – Tax scale (starts from 5% to 40%) C (Other relatives, Strangers) – Tax scale (starts from 10% to 40%)

Note:

For parental provisions/donations made before 1/10/2021, the tax-free limit is not taken into account. For more information, you can contact the AADE or a tax advisor.