Transferring money from parents to children to cover everyday expenses — such as rent, tuition fees, groceries, or general living costs — does not automatically qualify as a taxable gift under Greek tax law. According to the Independent Authority for Public Revenue (AADE), such payments are generally not subject to taxation when they serve clearly documented, immediate needs. The same applies to small, regular allowances — like pocket money — given by parents or grandparents to children and grandchildren.
Why the Description Matters
However, how a bank transfer is labelled can have serious tax implications. Incorrectly labelling a payment as a “gift” or “loan” in the transaction description may trigger scrutiny — and potentially lead to tax liabilities reaching up to 40%. AADE clarifies that small-value transfers between close relatives or acquaintances — whether processed via the IRIS instant payment system or other banking channels — are not inherently of tax interest. Exceptions arise only if patterns suggest abuse: for instance, repeated high-value transfers occurring with unusual frequency.
How Parental Financial Support Is Declared
Parents’ financial contributions must be formally declared through the myPROPERTY platform. Once submitted, AADE cross-checks these declarations against data reported by banks. If the bank fails to confirm the transaction — or if the taxpayer cannot provide supporting documentation — the transfer may be taxed without regard to any tax-free allowance.
Tax Rates and Exemptions
In such cases:
- A flat tax applies from the first euro transferred — at rates of 10%, 20%, or 40%, depending on the degree of kinship.
- Cash gifts are taxed separately at 10%, with no tax-free threshold.
- Successive gifts are assessed individually, taking into account the actual circumstances, purpose, and timing between transfers.
- Transfers made to a joint bank account held by the child and a third party are also subject to review.
Gifts to siblings or other second-degree relatives are taxed at 20% from the first euro; for third-degree relatives, the rate rises to 40%. For first-degree relatives — including parent-to-child transfers — a tax exemption of up to €800,000 applies, but only if the transfer is executed through the formal banking system.
Cash Transfers Carry Higher Risk
Crucially, monetary gifts made outside the banking system — i.e., in cash — are always taxable at 10% from the first euro, even between parents and children. This rule underscores the importance of using traceable, bank-mediated channels for all significant family financial support.
What Changed for IRIS Payments?
Since last January, transaction limits for Greece’s IRIS instant payment system have increased. The daily limit for private individuals rose from €500 to €1,000 — covering both person-to-person transfers and payments to professionals. The monthly cap now stands at €5,000. No commission is charged on transfers between individuals, while fees for payments to professionals are borne by the recipient.