In the taxation of gifts received by individuals, it is crucial who the donor and recipient are, and the value of the gift. The recipient can be liable for income tax or for inheritance and gift tax.

If an individual gives a gift to another individual and the object of the gift is movable property, the gift is taxed only above a certain amount (5,000.00 EUR), except in the case of real estate (gifts received from the same donor within 12 months are added together). For a cash gift received up to a certain amount, the recipient does not need to file a tax return. In other cases, the recipient must submit a tax return for the received gift to FURS within 15 days of receiving the gift. The tax rates vary depending on the order of succession.

A gift is considered accepted upon signing a gift contract, a delivery contract, a contract for lifetime support, or upon the actual receipt of the gift. In the case of contracts for lifetime maintenance and gift contracts in the event of death, the tax liability arises on the day of death of the supported person or on the day of the donor's death.

FURS issues a tax decision within 30 days from the day of filing the taxpayer's declaration. The taxpayer must pay the tax within 30 days of the delivery of the tax decision.

Which persons are exempt from gift tax?

According to the Inheritance and Gift Tax Act, the following persons do not pay inheritance and gift tax:

• heir or recipient of the first order of succession;
• son-in-law, daughter-in-law, stepchild and heir or recipient who lived with the deceased or donor in a registered same-sex partnership community, who are legally equated with heirs or recipients from the first order of succession
• legal entity of private law, established under the law to perform religious, humanitarian, charitable, health, social welfare, educational, research, or cultural activities or to perform activities of protection and rescue, but only if it is a gift or inheritance intended for performing such an activity of a legal entity.

 

Even in the mentioned cases of exemption, it is necessary to file a tax return.

Without proof that the tax has been paid or that there are legally defined reasons why the tax does not need to be calculated or that the gift contract is not subject to assessment, it is not possible to authenticate the signatures on the contract with a notary.

In the case of contracts that are taxed with the gift tax, the recipient is considered the taxpayer. However, it is important to note that when it comes to the donor of real estate (a natural person) who acquired the property after 01.01.2002, capital gain is also determined according to the provisions of the income tax law when the property is disposed of. This applies to regular gift contracts, but not to contracts for lifelong maintenance and gifts for the event of death. As gift contracts typically involve parents giving real estate to their children or spouses to their partner, the income tax law allows for these taxpayers to also defer the determination of the tax obligation.

Other exemptions from the payment of inheritance and gift tax

Inheritance and gift tax according to other special laws is not paid by:

• the heir or recipient who, according to the provisions of the law governing agricultural land, is considered a farmer, if he or she inherits or is gifted agricultural land.
• the heir or recipient - the takeover of a farm, who is considered a protected farm according to the law that regulates the inheritance of agricultural estates, as well as in cases where the heir or recipient - a farmer - inherits or is gifted an entire farm.
• the heir or recipient, if it is a gift or inheritance that has the status of a cultural monument, provided that the donated or inherited cultural monument is not alienated before the expiration of 10 years and provided that the cultural monument is accessible to the public or intended for performing cultural activities,
• the taxpayer who inherits or receives as a gift and cedes without remuneration to the state, municipality, or private law entities established under the law for carrying out religious, humanitarian, charitable, health-related activities, etc., if the property is intended exclusively for non-profit purposes of the recipient. The tax paid before the cession of the inheritance or gift is refunded if the cession is made within six months of receiving the inheritance or gift.