Greece clarifies gift tax rules for returned funds

Greece's Independent Authority for Public Revenue (AADE) has issued clarifications regarding gift tax regulations, specifically addressing scenarios where transferred funds are returned on the same day. This follows recent media reports concerning a decision by the Tax Dispute Resolution Directorate (DED).

The DED ruling involved a €51,801 transfer for which a gift tax return was submitted via the myProperty application by both the donor and the recipient. The subsequent calculation indicated a tax liability. The AADE emphasized that this was not a simple transfer and immediate return; the submission of the gift tax declaration meant the transaction could not be considered a mistake.

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It is emphasized that with the delivery of the money, the donation is completed.

According to the AADE, a gift is legally considered complete upon the transfer of funds. Even if a monetary gift is revoked by mutual agreement within five years, the initial gift remains taxable. However, the subsequent return of the gifted amount to the original donor is not subject to taxation. The authority stressed that the initial gift is always taxable if a gift tax return has been filed.

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Consequently, according to the law, the initial donation is always taxed, provided that a gift tax return is filed.