German Gift tax return
Lawyers & tax consultants for gift tax declarations in Germany
Are you planning to make a gift or have you already made or received a gift and are wondering what steps to take to ensure that the gift is properly taxed? Here you will find information on the topic of gift tax declaration.
For a non-binding inquiry, please contact one of our contacts directly by phone or e-mail or use the contact form at the bottom of this page.
Services around the gift tax return in Germany
Our tax advisors and specialist lawyers for german tax law advise and represent you in all questions concerning the notification of gifts as well as the gift tax return:
- Tax structuring of gifts and anticipated succession
- Preparation and optimization of gift tax returns
- Appeals and lawsuits against gift tax assessments
- Valuations of real estate and companies for gift tax purposes
- Representation in criminal tax matters in the event of gift tax evasion
- Civil law structuring of gifts as well as gift revocation
General information on german gift tax can be found here: Gift tax
In the case of acquisitions upon death, i.e. in particular inheritances, we can help you here: Inheritance tax return
Obligation to notify - how the tax office finds out about the gift
In the case of a gift, both the donor and the acquirer must notify the gift tax office of the gift within three months in accordance with Section 30 of the German Inheritance Tax Act (ErbStG). Exception: If the gift has been notarized by a notary (for example, in the case of the transfer of real estate or shares in a limited liability company), the notary is obligated to inform the gift tax tax tax office about the gift.
The notification of the gift is made informally at the locally competent gift tax tax office and should contain the following information:
- Name and address of the donor and acquisition
- Date of the gift
- Subject and value of the gift
- Degree of relationship
- Time and value of previous gifts by the donor
In the case of previous gifts, all gifts made within a period of up to ten years prior to the gift must be stated, because according to § 14 ErbStG, all property benefits accruing to the same person within ten years are added together. Incorrect information can already lead to tax evasion. In our experience, people tend to forget that items received abroad are also subject to gift tax.
Request by the tax office to submit the gift tax return
The gift tax office in Germany can then request a gift tax return from the parties involved after becoming aware of the gift. As a rule, only the acquirer and not also the donor is requested to submit the return. As a rule, a generous deadline is set for submission. If the declaration cannot be submitted on time, an extension of the deadline should be requested, otherwise a late payment surcharge of up to 10% of the tax (§ 152 AO), as well as penalty payments (§ 329 AO) can be imposed.
The gift tax return must also be filed if the taxpayer comes to the conclusion that gift tax is not due. The decision as to whether gift tax is assessed is the responsibility of the tax office - at least in the first step.
Preparation of the gift tax return
In principle, the taxpayer in Germany can file the gift tax return himself, which is feasible in simple constellations with some training. However, it is advisable to hire a tax expert at least if, for example, the following assets were given away:
- Real estate, agricultural land or forestry
- Shares in companies
- Participations in closed-end funds
In the case of these assets, even the valuation of the object of the gift raises complex questions. In addition, there are numerous legal tax exemptions and tax concessions for real estate and business assets. Only those who are aware of the options permitted under tax law can avoid an unnecessarily high gift tax. The same also applies to the following constellations:
- Gifts subject to a reservation of usufruct
- Mixed gifts with consideration (purchase/gift)
- Gifts subject to a condition
Here you also have to fill in the "annex consideration and conditions". At the latest when such items are donated, the submission of the gift tax return becomes complex, because then, in addition to the gift tax return, further declaration forms for the so-called needs assessment must also be submitted. The gift tax return (mantelbogen Erb11) then includes the following attachments for the so-called needs assessment:
- BBW 1/12 - Declaration for the determination of the real estate value/personal data
- BBW 2/12 - Annex determination of real estate value
- BBW 2a/12 - Insert sheet for annex determination of the land value
- BBW 20/10 - Annex agriculture and forestry to the declaration of assessment
- BBW 50.1/13 - Annex business assets individual assets for taxation dates after 6.6.2013
- BBW 50.2/13 - Annex business assets partnership taxation dates after 6.6.2013
In these cases, it should always be considered whether it would not make sense to prove a lower value of the object by means of an expert opinion. Here, the possible tax savings must be weighed against the additional costs for the expert opinion.
In particular, when donating items that are partially or fully exempt from gift tax, care must be taken to ensure that the tax exemption is also claimed. Examples:
If the acquisition of the spouse or registered partner includes a family home within the meaning of Section 13 (1) No. 4a of the Inheritance Tax Act, the "Family Home Tax Exemption Annex" must also be completed. If the accrual of assets includes a tax-privileged business asset within the meaning of §§ 13a. 13b ErbStG, the annex "Tax relief for business assets" must be completed.
If the acquisition includes real estate rented out for residential purposes within the meaning of Section 13c of the Inheritance Tax Act, the annex Tax exemption for real estate rented out for residential purposes must be completed.
Formalities, duration and costs of the declaration
As a rule, the german gift tax declaration must only be signed by the acquirer. Only if the donor has assumed the payment of the gift tax - which in turn is considered as a gift to the done - the declaration must also be signed by him. A declaration that has not been signed is deemed not to have been made.
How long does it take for a gift tax assessment to be issued? It is not possible to make a generally binding statement on this. You should be prepared for the fact that the notice may not be issued until a year after the gift tax return has been submitted. This applies in particular if the above-mentioned items are donated. In this case, a provisional gift tax assessment is often issued first, which will be changed if the relevant tax office (local tax office) issues a separate assessment notice for the valuation.
The gift cannot be reversed without further ado if the tax consequences have not been considered. This would be a return gift, which is also subject to significantly lower tax allowances (€20,000 in the case of a return gift from a child to a parent).
To safeguard family assets, gifts should therefore always be carefully regulated by contract. Contractual rights of revocation on the part of the donor can enable a tax-neutral reversal of the gift.
Costs of a gift tax return
Normally, the preparation of a gift tax return is charged according to the Tax Advisor Remuneration Ordinance (StBVV). The preparation of the gift tax return by an expert for gift tax returns thus does not cost more than with a "normal" tax consultant.
The costs of preparing the gift tax return can be deducted from the value of the gift in the gift tax return. More information on the tax treatment of the fee can be found here: Deductibility of the costs for the gift tax return.