Is it recommended that I submit a gift tax return even if the gift is not subject to gift tax?

If the total value of the gift or gifts stays below the €5,000 threshold, you do not have to file the return unless the Tax Administration has requested that you do so. However, there are situations – corporate shares of a non-listed company as a gift – that make it useful for you to submit a gift tax return even if the value stays below the threshold of gift taxation. After the return is processed, a confirmed gift tax value is recorded for the asset you received. If you sell the asset later, you will be able to use the confirmed value as the acquisition cost.

If the Tax Administration has not confirmed the tax value of an asset that you sell, its acquisition cost is based on the length of time that you, the seller, has held the asset. The deemed values are either 20% or 40% of the selling price. When you sell an asset, it may be more advantageous to you to use the confirmed tax value than the acquisition cost presumption.

If you receive listed shares, their quotation value at the stock exchange on the date of the gift is their acquisition cost, even if no value has been confirmed for purposes of gift taxation. This means that if the value of stock-exchange-listed shares stays below €5,000, you do not have to file a gift tax return unless you receive other gifts from the same donor and the combined total value goes over the €5,000 threshold within a 3-year period.