Who pays the gift tax
- Who pays the gift tax
- What tax is payable on a donation?
- How much do I have to pay to the tax authorities for a donation of money?
- Where is a donation of money taxed?
- Cash donations pay taxes
- How are donations taxed?
- What taxes are paid on a donation in Mexico?
- What inheritance tax is payable?
- Donations of money are taxed
- How much money can be given without declaring?
- How much money can I give without declaring?
- How much money can be donated to a child without declaring it?
- Tax-exempt donations
But if the object of the donation is a movable good, that is to say, a vehicle, a book, money, jewels, it is NOT obligatory to go to the notary’s office, although it is convenient in certain cases as we will see later on when dealing with the fiscal questions. Article 632 of the Civil Code provides that: “The donation of a movable thing may be made verbally or in writing. The verbal donation requires the simultaneous delivery of the donated thing. Failing this requirement, it will not be effective if it is not made in writing and the acceptance is evidenced in the same form”. This means that to donate, for example, a book, it is enough to say: “I give it to you” and deliver it immediately.
From the fiscal point of view, it must be taken into account that, in every donation, the person who receives (the donee) must pay a tax on the donation. The amount of the tax depends on several factors, such as the value of the gift, the degree of kinship with the donor, the age of the donee or his pre-existing assets.
In addition, the donation may also have tax implications for the donor, in case the value of the donated asset is higher than the value of its acquisition by the donor. This is the so-called capital gain in income, which is included in the personal income tax.
What tax is payable on a donation?
The person who receives the donation (donee) has to pay the Inheritance and Gift Tax (Impuesto de Sucesiones y Donaciones). In addition, if it is an urban real estate that has increased its value, he/she also has to pay the municipal capital gains tax.
The amount to be taxed depends on the amount donated. This percentage can range from 7.65% to 34%. So, certainly, any donation made during the Christmas period should entail the presentation of the tax liquidation within a period of 30 working days.
Where is a donation of money taxed?
1) Tax on Donations
When money or other movable goods are donated, the liquidation of the tax will be presented in the Autonomous Community where the child resides. If the donated property is real estate, the liquidation will be filed in the Autonomous Community where the donated property is located.
Cash donations pay taxes
VERY IMPORTANT UPDATE: The Supreme Court Ruling No. 242/2018, of 19/2/2018 has clearly and forcefully rejected the DISCRIMINATION OF EXTRA-COMMUNITARIANS in the Inheritance and Gift Tax, as I explain in the following post: ANOTHER SETBACK OF THE SUPREME COURT TO THE LEGISLATOR FOR VIOLATING EU LAW, BY DISCRIMINATING AGAINST NON-COMMUNITY CITIZENS WITH INHERITANCE TAX.
IMPORTANT UPDATE DECEMBER 2018: finally the Treasury has assumed that it can NOT discriminate against non-EU citizens with Inheritance and Gift Tax, and the Directorate General of Taxes in Binding Consultations V3151-18 of 11/12/2018 (referring to Andorrans) and V3193-18, of 14/12/2018 (referring to Russians) fully assumes primacy EU Law reaching the following CONCLUSIONS:
Second: In accordance with the case law of the Supreme Court and in accordance with the case law of the CJEU on the scope of the principle of freedom of movement of capital enshrined in Article 63 of the Treaty on the Functioning of the European Union, the effects of the judgment of the CJEU of September 3, 2014, are applicable to residents in non-EU countries.
How are donations taxed?
The capital gain will be the result of adding the actual amount, the cost of investments and improvements and expenses and taxes, minus the deductible depreciations. Once the amount has been calculated, the donor will be taxed in the IRPF with the percentage of 19-23%.
What taxes are paid on a donation in Mexico?
If the donation is made to a third party, 20% of the total value of the property must be paid and 25% if the donor resides abroad. Donations are not subject to VAT, but in some states of the country, Real Estate Acquisition Tax and registration rights in the Public Registry of Property must be paid.
What inheritance tax is payable?
In Spain, Inheritance Tax must be paid by all heirs, as it is a personal tax. For this purpose, there is a period of six months starting from the date of death.
Donations of money are taxed
Donation with onerous causeThis is a donation in which the beneficiary pays for what is donated, but less than its value. For example, a father has several cars and decides to give one of them in exchange for a payment of 1,000 euros, although the market value of the vehicle is 8,000 euros. In other words, there is an economic exchange, but it cannot be considered a payment.When quantifying the donation, the money given must be subtracted from the market value of the asset. Thus, in this case, the donation would be 7,000 euros, an amount that would have to pass through the tax authorities.Remunerative donationThis is a donation that is given by virtue of the merits of the donee or the services he has rendered to the donor. Example: Joaquín is a manager and Alfonso is a builder. Alfonso is building a house for Joaquín when a problem arises when it comes to arranging some papers of his construction company and hires the services of Joaquín, who charges him 1000 euros for it. As Alfonso is satisfied with Joaquín’s work, he decides to give him a discount on the construction of the house of 600 euros. These 600 euros would be equivalent to a remunerative donation in favor of Joaquín for services rendered.
How much money can be given without declaring?
If the donation does not exceed 3,000 euros, the infraction is considered minor and a fine proportional to 50% of the amount that has not been paid to the tax authorities would be paid.
How much money can I give without declaring?
That is why there is no minimum amount from which a donation must be declared. As opposed to the minimum of 3,000 euros, in which the bank does have to inform if there is a higher cash withdrawal, therefore any amount must pass through the arms of the Tax Agency.
How much money can be donated to a child without declaring it?
For this body, there is no minimum amount, since it must be declared for any delivery of money, even if it is small. The banking entities, however, are obliged to notify the Treasury when the operations exceed 3,000 euros, to avoid suspicious movements.
However, there are notorious differences between them, although they also have similarities. The main similarity lies in the non-existence of consideration for the delivery of goods.
The main characteristic of Gift Tax, as opposed to Inheritance Tax, is that the delivery of goods is made by transfer between living persons (in Inheritance Tax it is mortis causa). The most common case is that of a parent who wants to donate an amount to his son to acquire a real estate or to give him a house without having to mediate a sale.
Once defined, the first doubt that arises is who is obliged to pay the Tax on Donations, that is to say, who holds the condition of Passive Subject. Well, in the Donations and other transfers of lucrative type, that is to say, without any consideration, it will be the donee (receiver of the delivery of goods) who is subject to the obligation to liquidate the Tax. If there is no donee as such, the Taxpayer will be the one who benefits from the Donation.