Your adult children live in Spain. You yourself live in the Netherlands. In which country will you pay gift tax? In this article, you will find more information about donating to a Dutch person in Spain. We also explain the principles if you wish to donate from Spain.
The video below is a summary of this blog created using artificial intelligence.
Legal framework in Spain
If the beneficiary of the gift is tax resident in Spain, all worldwide income, inheritances and gifts are taxable in Spain. Therefore, if you live in Spain and you receive a donation from abroad, you should file a tax return in Spain. However, the gift tax depends on the autonomous region. For example, there is a quasi-exemption in gift tax in Andalusia provided you receive the donation through a notarial deed.
Note: if you donate real estate, you are subject to capital gains tax.
Legal framework in the Netherlands
The Netherlands looks at the residence of the donor for the purposes of gift tax. This means that if you receive a donation from someone living in the Netherlands, Dutch gift tax will also be paid. In accordance with Dutch law, you have an exemption for gifts of €6,035 in 2023. After that, rates of 10 - 20% apply for gifts to partner and children. Rates for grandchildren range from 18% to 36% and for others from 30% to 40%. Exemptions may apply. For example, consider the one-time increased exemption of €27,231 applicable if you are under 40.
And vice versa? What if you donate from Spain to the Netherlands?
This situation is mainly relevant for Dutch nationals who emigrated to Spain and still want to benefit their children and/or relatives in the Netherlands, for example by making a warm-handed gift (donation during life).
If you live in Spain and you donate to someone living in the Netherlands, there are two options.
- If the property you donate is located in Spain (for example, a house or funds in a Spanish bank account), the beneficiary is liable to tax in Spain. The gift tax in Spain depends on the autonomous region.
- If you gift goods that are not located in Spain and the beneficiary is not a resident of Spain, there is no Spanish gift tax.
For Dutch gift tax, there are three options.
- As a donor, do you have Dutch nationality and have lived in Spain or outside the Netherlands for more than 10 years? Then there is no gift tax to pay in the Netherlands.
- As a donor, do you have Dutch nationality and have lived in Spain or outside the Netherlands for less than 10 years? If so, the beneficiary of the donation should file a tax return in the Netherlands.
- You lived in the Netherlands, but you do not have Dutch nationality? If you have not lived in the Netherlands since more than 1 year, there is no gift tax.
Decision: donating to a Dutch citizen in Spain
Study in advance the options to make the most tax-friendly gift possible and preferably avoid gift tax in both countries.
Do you have any questions about buying and emigrating to Spain? Please feel free to contact us via firstname.lastname@example.org.