Does your child or another family member live in Spain and are you considering a donation? Please note that the tax domicile of the beneficiary is decisive. Unlike Belgium, Spain taxes the recipient on their worldwide acquisitions. Without proper planning, you risk paying tax in both Flanders and Spain, as there is no double taxation treaty for gifts.
When does the recipient pay gift tax in Spain?
If the beneficiary is a tax resident in Spain, he or she is subject to Spanish Impuesto sobre Sucesiones y Donaciones (ISD) on full global assets. This applies regardless of where the donor lives or where the donated property is located. A Belgian bank gift to a resident of Spain is therefore directly taxable in Spain.
The criterion of tax residency
A person is considered resident in Spain for tax purposes if they reside there for more than 183 days a year or if the centre of life interests (family, work) is in Spain.
Expert Insight: "Many Belgians wrongly believe that a bank donation that remains untaxed in Belgium (so-called 'hand donation') is also invisible in Spain. However, the Spanish tax authorities have increasing means of data exchange. Failure to declare a donation can lead to heavy fines on top of the tax due."
Read more about the impact of emigrating to Spain on your taxes.
Case study: Double taxation in practice
Let's apply the theory to a concrete situation:
- The Schenker: Patrick (lives in Flanders).
- The Beneficiary: Erik (lives and works in Barcelona, Catalonia).
- The Donation: €50,000 through a registered bank donation.
Because Erik lives in Spain, he has to declare this €50,000.
- Flanders: Patrick registers the donation (for legal certainty). He pays 3% (rate straight line) = € 1.500.
- Spain (Catalonia): Erik pays gift tax. As this is a private donation (no Spanish notarial deed), he falls in group II without specific exemptions. The first bracket is 7% = € 3.500.
- Total tax burden: €5,000 either 10%.
Erik therefore effectively pays tax twice on the same amount here. Depending on the Spanish autonomous region, double gift tax can be avoided.
Regional differences: The impact of Autonomous Regions
The effective tax burden in Spain depends entirely on the region (Comunidad Autónoma) where the beneficiary lives. Spain has a decentralised system where regions are allowed to set their own rates and exemptions.
- Andalusia & Madrid: These regions are known for their favourable regimes. There are often exemptions of up to 99% for gifts within the immediate family, provided the donation is correctly notarised.
- Catalonia & Comunidad Valenciana: These regions usually have stricter rules and higher fees, especially if strict form requirements are not met.
Returning to Erik's example, had he lived in Málaga (Andalusia) and had the donation been made by notarial deed, the Spanish tax would have been negligible. Since he lives in Barcelona and it was a private donation, he pays full tax.
You donate property located in Spain (Situs principle)
When you gift assets that are physically located in Spain (such as a holiday home), Spanish gift tax is always due. This applies regardless of the residence of the donor or the beneficiary. We call this the situs principle.
This applies to:
- Real estate in Spain.
- Balances in Spanish bank accounts.
- Other movable property registered in Spain (e.g. vehicles/yachts).
Find more information on gifting Spanish property here.
The role of the Flemish Gift Tax
The Flemish tax authorities only look at the residence of the donor. As a donor, do you live in Flanders at the time of the donation? Then Flemish gift tax applies to:
- Donations registered in Belgium (including registered bank donations).
- Notarised donations of movable property registered before a foreign notary (since 15 December 2020 mandatory registration in Belgium).
No double taxation avoidance treaty
The crucial problem is the lack of a tax treaty between Belgium and Spain for gift and inheritance tax.
- Belgium levies based on the residence of the donor.
- Spain levies based on the residence of the beneficiary.
When these two criteria come together (Flemish parent donates to Spanish resident child), the double taxation arises. There is no mechanism to deduct the tax paid in Belgium in Spain, or vice versa.
Conclusion: A man forewarned
Gifting to a Spanish resident is tax complex and can lead to unexpected double taxation. Simply transferring money ("bank donation") is rarely the most optimal route if the recipient lives in a region with a high tax burden. An analysis of the specific regional legislation in Spain is necessary before making the donation.
Frequently asked questions (FAQ)
Is there any way to avoid double gift tax between Belgium and Spain? There is no treaty to prevent this automatically. However, smart planning can sometimes reduce the pressure. This requires customised advice.
Do I have to pay tax in Spain on a donation from Belgium if I live in Spain? Yes. If you are a tax resident in Spain, you are liable to tax on your worldwide income and acquisitions, including gifts from Belgium. Concealing this is punishable by law.
Does it matter which Spanish region I live in for gift tax purposes? Yes, this makes a huge difference. Regions like Andalusia, Madrid and Murcia have very favourable schemes (often 99% bonus) for family members, while regions like Catalonia and Asturias have higher rates.
Does Spanish gift tax also apply to Belgian property? Yes, if the recipient of the property resides in Spain. Spain taxes the recipient on his worldwide capital gains. However, for property located abroad (Belgium), Spain may sometimes allow a credit for tax paid abroad, depending on internal Spanish rules.
About the author: Glenn Janssens is a lawyer specialising in Spanish real estate transactions and tax regulations. Since 2017, he has been helping Belgian and Dutch individuals and entrepreneurs to safely purchase and structure real estate in Spain. He guides files from A to Z: from due diligence, ownership and tax control to estate planning and optimisation for residents and non-residents. Thanks to his years of experience, hundreds of handled files and focus on transparent communication, Glenn makes complex Spanish legislation understandable and practically applicable for every property buyer.
