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Prerequisites

Documents required

• Notification of a donation
• Gift tax return
• Further necessary evidence as requested by the competent authority

Please note

Your enrichment is considered a taxable acquisition, unless it is tax-free. The assets and associated liabilities are valued according to the provisions of the Valuation Act.
Your relationship to the donor determines which tax class applies to you:
Tax class I

• the spouse and the life partner,
• the children and stepchildren,
• the grandchildren and great-grandchildren.

Tax class II

• the parents and grandparents,
• the siblings,
• the children of siblings (nieces and nephews),
• the stepparents,
• the children-in-law,
• the in-laws,
• the divorced spouse and the life partner of a dissolved civil partnership.

Tax class III

• all other purchasers and the special purpose donations.

The tax bracket, in turn, determines the amount of the personal allowance that is deducted from the value of your taxable income. The tax rate also depends on the tax bracket.
Personal allowances
The personal allowance is:

• EUR 500,000 for spouses and life partners,
• EUR 400,000 for children (and children of deceased children),
• 200,000 EUR for grandchildren,
• 100,000 EUR for the other persons in tax class I,
• 20,000 EUR for persons in tax class II,
• 20,000 EUR for persons in tax class III.

You can only claim the tax allowance once within 10 years. If you have already received a gift from the same person during this period, the value of the previously gifted assets will reduce the tax allowance.
A gift tax assessment is only possible if your current acquisition is higher than the personal allowance still available.

Deadlines

• Notify the relevant authority in writing of the donation within 3 months of its completion.


• Pay the assessed gift tax within one month of receiving the tax assessment.

Procedure

As a purchaser or donor, you are fundamentally obliged to report every gift (donation) to the responsible authority in writing.
Please provide the following information in the ad:

• Day of donation
• Your name and address
• Name and address of the donor
• Your personal relationship to each other (relatives, in-laws)
• Object of the transferred assets
• Value of the assets transferred.

In addition, the responsible authority learns of acquisitions that are significant for tax purposes through notifications from third parties – for example from notaries, courts, authorities, banks and insurance companies.
You will be asked to submit a gift tax return if the responsible authority expects a tax assessment after examining the documents.
You submit your tax return on the officially prescribed form or via the electronic tax return procedure (ELSTER).
The responsible authority will check your tax return. If the check shows that gift tax is due, you will receive a gift tax notice.
You pay the gift tax shown in the tax assessment.

Processing time

no

Fees

no

Legal remedies

Objection

Legal basis

Inheritance and Gift Tax Act (ErbStG)