Tax on money received from abroad as gift

35 posts in this topic

Hello!

 

Does anybody on this forum knows if there is a tax in Germany on money recieved from ABROAD from parents as gift?

 

I have some money in my previous home country which I want to bring to Germany. Will I have to pay any taxes on the money? Do I also need to prove the source of the money or would it just suffice to say that I had funds in my home country before I came to Germany incase if asked.

 

Thanks in advance.

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No tax on the money itself. You are liable for tax on capitals gains that the money may have made during the time you are resident in Germany.

 

In the very unlikely event that you are asked about the source of funds you say "personal savings".

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Hello,

 

My friend is going to move to Germany end of this year. Now that the Euro rate is low, he is planning of transferring around 10K US$ to my account and will collect it back once he is here. The above post clarifies that no tax on the money itself. You are liable for tax on capitals gains that the money may have made during the time you are resident in Germany.

Is there any limit as to how much money can be transferred in a single transaction without raising alarm? Is 10KUS$ too much for a single transaction? Anyother things that I should be careful about money transactions that might end up being taxed?

 

Any help will be highly appreciated.

 

Cheers,

 

DL

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I would think 10 k would raise an eyebrow.

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If you do feel it's necessary to split it into multiple transactions, I'd be willing to let your friend transfer 5000 USD to my account...

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There is no "flag raising" for any currency transaction that is equivalent to EUR 30,000 - so you need not worry.

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There is no "flag raising" for any currency transaction that is equivalent to EUR 30,000 - so you need not worry.

 

Just found the following on a different thread.

 

 

It's the same as for inheritance tax.

 

Free (§ 16):

Spouse: 307,000 € (Inh. Tax Class I)

Children: 205,000 € (Inh. Tax Class I)

Parents and Grandparents if erwerbsunfähig: 51,300 € (Inh. Tax Class II)

Grandchildren: 51,200 € (Inh. Tax Class II)

Siblings, Parents, Grandparents, Children of siblings: 10,300 € (Inh. Tax Class II)

Others: 5,200 € (Inh. Tax Class III)

 

All gifts within 10 years from the same person are lumped together for tax purposes (§ 17).

 

The above tax trick with the "given to equip house" is more along the lines of buying furniture for someone and donating that to them; that can add an additional free amount to the above, up to 51.3k for TC I on furniture and valuables and 10.3k for TC II/III only for furniture.

 

In the OP's case, we'd have up to 120 gifts of 500 Euro, 60,000 € total so far in the relevant 10-year time frame from what he's said; OP is child of the giver could therefore receive another 145,000 € in one or more lump payments from the same person in a 10-year period. Everything beyond that is taxed, at between 7% and 30% depending on amount, with some additional regulation on international double taxation.

 

Does this still hold good? If yes, then I am afraid I can receive upto only 5200€ (Tax free) from a third party.

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You would only pay for any capital gain on the cash....so in an account that does not give any interest (ie just about every normal checking account in Germany)you would have no Capital Gain. This is not a gift from a 3rd party - as I take it you will give it back to your friend when he/she gets here??

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This is not a gift from a 3rd party - as I take it you will give it back to your friend when he/she gets here??

 

It is not a gift and yes, I will have to return it. But the problem is, my account transactions will show that i have received 10kUS$ in bank transfer from the USA and i will not have any records to show that the money has been transferred back to him as i assume that i will be handing it over in cash once my friend comes here to Germany.

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Then a written statement from your friend, confirming that the money was sent from him, and subsequently paid back to him, will be sufficient for the finanzamt.....should they even pick up on it which is extremely doubtful.

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I would think 10 k would raise an eyebrow.

 

We transferred about €14000,- from SA into our Sparkasse account. The Finanzampt sent us a letter to find out where the money came from. The bank told us that they are obliged to inform the Finanzampt of all international deposits over €12500,-.

 

I'm not sure if this differs from country to country, but we didn't have to pay tax on it. We simply sent the FA form back, with the deposit declared as a gift from my mother.

 

That was that.

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Why do so many people guess and surmise?

 

Any financial transaction in, or out of the country which exceeds €12,500 must be reported to the Deutsche Bundesbank (§59 AWV). Any incoming or outgoing payment via a German bank will advise you of this in the transaction statement. This data is only used for statistical purposes. There is no formal reporting requirement to the Finanzamt

 

Under §69 AWV banks themselves must also report most international transactions, including currency exchange, in some circumstances without any minimum.

 

Irrespective of this reporting any bank must report any transaction (value irrelevant) they deem "suspicious" to the financial authorities, which includes the Finanzamt. It is up to the bank to decide what is "suspicious", but they tend to air on the aide of caution. If a high or international payment into or from your account is rare, or a payment from abroad into a normally dormant account occurs then their automatic alarm bells ring and the information is passed on. The primary reason for this is to detect illegal money laundering rather than tax avoidance.

 

There are other automatic alarms in the different financial systems. If you buy a house for €500,000 and have a €400,000 mortgage then the Finanzamt may ask where the €100,000 deposit came from if you've not previously declared any income from this potential prior investment. Of course this may have been a perfectly legal gift or inheritance, or may have been on a non-income generating deposit, but the questions may be still be asked awaiting answers to their satisfaction.

 

$10k falls well under the radar for you to need to do anything directly, but you should be ready for possible questions if the bank alarm bells ring and the Finanzamt or another financial authority reacts. So long as you can show a credible paper trail back to your friend, the problem, if there is one at all, becomes his. If you are paying him cash ask for a formal receipt - without one there would certainly be a smell of money laundering.

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Heads Up! - Do NOT use G.emini P.artners!!!

They are just cold-calling cowboys with no skills, qualifications or experiences.

 

They get your info from Internations / Linked In / Xing, find out where you work and then call your office's reception to get connected to you.

 

If they get connected to you, they say that they are Expat tax advisers / insurance advisers / investment experts... and that they got your number through a "referral".

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Anyway I have been reading around and see there were many changes to German Inheritance & Gift tax in 2009 but clearly everyone seems to focus on the former as most money comes after the fact...

However my farther-in-law has an annuity that has come up and has the opportunity to take a lump sum rather than a yearly amount. He would therefore like to gift us that amount it's less than the 400k exception (but not a million miles south) that we would be with class 1 (step/child) but again it seems to apply to inheritance rather than gifting. Also for him to buy a house and us live in it (ie. to take advantage of the inheritance exceptions) would not be an option.

I will be seeing a lawyer before the Easter holidays but was wondering if anyone had any recommendations or tips from their own experience.

 

Thanks in advance.

Ps. I am happy to do right by the Finanzamt et al, no I do not want to invest the money in anything else *REALLY* (eg. Derivatives, Carbon credits, Easter eggs, etc.).

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He can give his daughter up to 400,000€ every 10 years without your wife having to pay any tax, see §14 ErbStG.

 

The tax free amount applies to both gifts and inheritances.

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Hi,

I have a question in regards to the taxes. My parents send me some money and I know that it is well under the taxable limit for "beschenkung", but I put this sum in my savings account and I have 6€ savings account yield. I just wanted to ask do I need to file something with Finanzamt and if I do what do I file.

 

Thank you!

Have a great day!

Topics merged by admin

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No, don't worry.

There are 2 possibilities:

  • you gave your bank a Freistellungsauftrag and told them to exempt up to 801€ of your capital income from tax --> no tax was deducted since your capital income was under 801€ a year, no need to file anything
  • you didn't give your bank a Freistellungsauftrag, the German bank then deducted a 26.375% source tax from it (= 25% Abgeltungssteuer + 5.5% Solidaritätszuschlag on the Abgeltungsteuer) --> a tax was already deducted, you don't have to file anything
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On 30/3/2014 23:48:07, PandaMunich said:

He can give his daughter up to 400,000€ every 10 years without your wife having to pay any tax, see §14 ErbStG.

 

The tax free amount applies to both gifts and inheritances.

 

Hi,

 

I have a question concerning the related taxes (if any) associated to receiving an amount of money from a different EU country via bank transfer to my regular German bank account.

 

I am an EU citizen living and working in Germany and I am selling a real state property in this other EU country. My plan is to ask the buyer to transfer the full amount of money to my bank account in Germany. Is that ok? Is there something I should know (from a tax perspective, or any other) when doing this?

 

Thank you!

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