Late penalty charge and tax increase in gift taxation

If you submit your gift tax return or information related to the tax return late, you might have to pay a late penalty charge or become subject to a tax increase. The type of penalty is determined by the number of days the return is delayed.

You might have to pay a late penalty charge if you received a gift on or after 1 May 2018. The provisions on tax increases were also amended as of 1 May 2018.

File a gift tax return with the Tax Administration

The recipient must file a gift tax return

  • when the value of the gift is EUR 5,000 or more
  • when the aggregate value of gifts from the same donor over three years is EUR 5,000 or more.

The gift tax return must be submitted within3 months of receipt.

How to file a gift tax return

Number of delay days affects the charge amount

f you submit your gift tax return late, you have to pay either a late penalty charge or a penal tax increase. The Tax Administration will determine the charge based on the number of days the return is delayed.

If you file your gift tax return up to 60 days after the due date, you have to pay a late penalty charge. It makes no difference if you were prompted to file the gift tax return or if you acted on your own initiative.

The Tax Administration will impose the late penalty charge also if you correct your tax gift return or add new information to it on your own initiative and to your own detriment.

The Tax Administration does not impose the late penalty charge in the following cases, for example:

  • A network failure prevents submitting the return in time.
  • The omission is minor.
  • There is a justified reason for the delay, such as sudden illness.
  • The case involves a miscalculation, misspelling or misunderstanding.
  • You are declaring a deduction or a debt.
  • You have received extra time for filing your gift tax return, and you submit the return within the new due time.

Only one late penalty charge is issued for each gift tax return, even if it contains several instances of omission. The late penalty charge appears in the tax decision. The Tax Administration sends a separate hearing letter only in exceptional cases.

A tax increase will be imposed in the following cases, for example:

You fail to submit a gift tax return to the Tax Administration.
You file your gift tax return more than 60 days after the due date, either on your own initiative or after a request from the Tax Administration.
You correct your gift tax return or add new information to it to your own detriment more than 60 days after the due date.

The Tax Administration does not impose the tax increase in the following cases, for example:

  • The omission is minor.
  • There is a justified reason for the delay, such as sudden illness.
  • Imposing the tax increase would be unreasonable.
  • You are declaring a deduction or a debt.

The reason for the omission affects the amount of tax increase

The Tax Administration will calculate the tax increase on the basis of the increased tax amount (according to the scale of the first tax bracket).

Table indicating the tax increase amounts in gift taxation as percentages
Tax increase
10%
Tax increase
15–50%
Tax increase
5%
Tax increase 25%Tax increase
2%
Basic tax increase level, Basic tax increase level if there is no reason to impose a lower or higher tax increase. The omission is recurring or
the actions demonstrate complete indifference. 
The matter is subject to interpretation or unclear or
a tax increase of 10% would be unreasonable .
The Tax Administration has to set the tax based on its own assessment if, for example, the taxpayer has not filed a gift tax return. You request the Tax Administration to correct an error on your own initiative more than 60 days after the gift tax return due date.

However, the minimum amount of tax increase is

  • EUR 75 for private individuals
  • EUR 150 for other taxpayers.

The Tax Administration always sends a hearing letter to the customer in the event of tax increases.

Tax increase can also be imposed in cases of other types of omission

In addition to delays, a tax increase can be imposed if the gift tax return is incomplete or contains errors.

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