Receiving a cash donation or gift is always good news. And the taxes? Do you know what to do?
Did you know that you may have to share part of a donation you received with the Tax Authority? And that even if you don’t have to pay tax, there is an obligation to file a return?
The rules regarding cash donations are often unknown. However, failure to comply with tax obligations can be costly and bring you into trouble.
The general rule is that donations above 500 euros are subject to the payment of Stamp Duty. That is, 10% of what you receive will have to be delivered to the Tax Authority. There is, however, an exception for donations between ascendants and descendants, such as those involving parents and children.
Even so, those who receive must always declare the value of the donation, even if they are exempt from paying the tax.
If you are getting married or have received a more generous gift, don’t forget these obligations. It’s just that the fines for not paying the tax when due, or for failing to deliver the declaration can be heavy.
Find out about all procedures related to cash donations in this article from Positive Balance and also learn about the implications with regard to the IRS.
Find out about other contents of Saldo Positivo.
O Positive Balance is Caixa Geral de Depósitos’ financial literacy website and aims to make life easier for the Portuguese with regard to money management with the regular publication of articles, news, guides and infographics.