Christmas bonuses under the magnifying glass of the treasury: when do you have to declare them?

Exchanging gifts at Christmas is a general social custom outside the gaze of the tax authorities, but not everything goes.

22 December 2022 Thursday 21:36
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Christmas bonuses under the magnifying glass of the treasury: when do you have to declare them?

Exchanging gifts at Christmas is a general social custom outside the gaze of the tax authorities, but not everything goes. Some gifts are subject to Personal Income Tax (IRPF), when they come from the company where you work, and others to inheritance and donation tax, when they are received from a friend or relative. In the latter case, common sense is the rule that must govern to prevent the bonus from being accompanied by a fine from the Treasury.

"With the law in hand, taxes should be paid for each of the gifts received, both in cash and in kind," explains Carlos Cruzado, president of the union of technicians of the Ministry of Finance (Gestha). "But, obviously, Christmas, birthday and wedding gifts are not normally declared, unless they are of great value - for example, when a flat, a car or a valuable jewel is given as a gift," he clarifies.

In the rest of the cases, when the gift is of a small financial amount, it is not declared nor are the regional agencies that are in charge of managing the inheritance and donation tax investigate to collect for this type of gift. "The low value they have means that social use is imposed, and on the other hand, it would not be economical to start a procedure for this matter either," adds Cruzado.

However, the typical Christmas baskets and gifts that some companies give to their employees on these dates must be declared since they are considered compensation in kind. For this reason, they must "make a payment on account in the payroll for the value of the basket," says José Pedreira, coordinator of the Group of Experts on Personal Income Tax of the Spanish Association of Tax Advisors (AEDAF). Likewise, this expense is deductible in corporation tax.

With respect to the typical Christmas basket raffles, for example those offered to their clientele by some establishments such as bars, they should be taxed as an increase in wealth when their value exceeds 300 euros. "There is an obligation to notify the Treasury, which will practice the corresponding withholding, or it must be entered into an account," explains the expert.

When toys are no longer the first option, many family members choose to give children and young people a little straw in an envelope so that they can spend it on some whim or save it. Elisabeth Ruiz Dotras, professor of Economics and Business at the Universitat Oberta de Catalunya (UOC), recalls that "any money you receive, be it a transfer or in cash, is an amount that has to be paid in one tax or another " (IRPF or inheritance and gift tax).

In this sense, it is not the same to receive the payment in cash or via bank transfer or bizum. “If they give it to you in cash and you keep it at home, there is no traceability, it is like undeclared black money. But when you deposit it in the bank, there is already a record and that is when the Treasury could knock on the door ”, indicates Dotras.

It must be taken into account, however, that the most common monetary bonuses are 50 or 100 euros. These, although they must also be declared according to the law, will go unnoticed by the tax authorities "because it would be very difficult to have such exact control", even more so when they are never entered into a bank account. Therefore, no one declares them.

However, when the gift amounts to a high amount, "it is likely" that the Tax Agency or the corresponding administration will detect it if it is kept in the bank, warns Cruzado. For this reason, many taxpayers ask themselves what is the free amount that must be paid in order to avoid the fine. "There is no limit", they assert from Gestha, while stressing that financial institutions have the obligation to inform the Treasury of any transaction in 500-euro bills, cash operations -inputs or outputs- of more than 3,000 euros and of transfers of more than 10,000 euros. This does not automatically mean that the Tax Agency is going to open a procedure to investigate the origin of the funds, but it is useful information to determine if a taxpayer profile is at risk and a procedure should be opened for it.

In any case, when the amount given is of a high amount, it must be taxed. Cruzado also recalls that in the event that the monetary gift is from father to son, this type of donation is quite discounted in almost all the autonomous communities and, in some of them, even the fee is 99% exempt or enjoys of important exemptions, for example if the money is destined to the purchase of a home. For all this, it will always be better to pay accounts with the treasury, otherwise the gift can be very expensive.



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