By Euro Weekly News Media • 22 December 2021 • 11:32
Imagen de Bruno /Germany en Pixabay
For many of us buying presents can be a nightmare, especially when buying for teenagers. So often we resort to cash gifts but did you know what the legal ramifications are? Are cash Christmas gifts taxable?
Well the answer is quite simple and not really the one you want to hear. Strictly speaking cash gifts are taxable as they are considered donations in Spain. So any cash given to friends or family at Christmas should in theory be declared, and certainly anything over 500 euros will come under scrutiny.
As most of you will be aware money transactions over 3,000 euros are investigated by the Treasury with the cooperation of banks, as are deposits where 500 euro bills are involved.
The level of tax due on cash donations depends on who the money is given to ranging from 7.65% to 34% depending on the autonomous community.
Theoretically the tax of any cash gifted at Christmas should be paid within 30 business days. If the tax isn’t paid and the Tax Agency becomes aware of the gift then sanctions can be applied and which will vary depending on the time it takes to not pay and if it is the person who realizes the error.
Anti-fraud laws require a 1% surcharge for every month the tax isn’t paid in year one, after that the tax rises to 15% of the amount not declared. The authorities have in the past given a discount of up to 25% where the tax is paid during the surcharge period if undertaken willingly by the responsible person.
In terms of the law the person receiving the donation is responsible for paying the tax, which is why most tax advisers will recommend gifting assets rather than cash.
If in doubt about whether cash Christmas gifts are taxable and what you can do legally do, then take advice from a tax consultant.
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