Do donations to foreign countries have to be taxed?
March 25, 2024 | 50,00 EUR | answered by Eiko Hoffmann
Dear tax advisor,
my name is Tina Tiefbach and I have a question regarding gift tax. My grandmother lives in the USA and wants to give me a larger sum of money. Now I am concerned whether I have to pay taxes on this gift, as it is coming from abroad.
At the moment, I am unsure if I will have to expect a tax burden and how high it could potentially be. I fear that I may have to pay unexpectedly high taxes and would like to be informed in advance about possible solutions.
Could you please explain to me if gifts from abroad are indeed taxable and how I can prepare for this? Are there any special regulations or exemptions that I can take advantage of to minimize the tax burden?
Thank you in advance for your help.
Sincerely,
Tina Tiefbach
Dear Mrs. Tiefbach,
Thank you for your question regarding gift tax in relation to a gift from abroad. It is understandable that you are concerned about whether you may have to pay taxes and how high they could be. I will try to answer these questions as comprehensively as possible.
In principle, gifts from abroad are also subject to gift tax in Germany if the donor or the recipient is taxable in Germany. In your case, as the recipient, you would have to pay the gift tax. The amount of tax depends on the relationship between you and your grandmother as well as the amount of the gift.
However, there are tax-free allowances that you can claim to minimize the tax burden. For grandchildren, for example, the tax-free allowance is 200,000 euros every 10 years. This means that gifts up to this amount are tax-free. If the gift amount exceeds this allowance, you would have to pay taxes on the excess amount.
It is important that you report the gift to the tax office in a timely manner and submit the gift tax return on time. This way, you can ensure that all regulations and allowances are taken into account and you do not have to unexpectedly pay high taxes.
It may also be advisable to seek advice from a tax advisor to clarify all tax aspects related to the gift from abroad. A professional tax advisor can help you find the best solution for your individual situation and minimize the tax burden.
I hope this information was helpful to you. If you have any further questions or need assistance, please feel free to contact me.
Best regards,
Eiko Hoffmann
