Tax expert Niki Vombiraki explained what taxpayers need to know about money transfers made through IRIS — when they are tax-free and when they may be classified as a gift and become subject to taxation — speaking on the ERTnews programme Connections.
The use of IRIS for money transfers has grown significantly, as it has become a fast and convenient tool for everyday transactions. However, not all money transfers are tax-neutral — depending on the reason and purpose of the transaction, different tax obligations may arise.
What the rules are for pocket money sent from parents to children via IRIS
Particular care is required when transferring money from parents to their children, especially ahead of the new academic year when living costs tend to rise. According to the tax expert, there is no specific monetary limit for pocket money and routine living expenses sent to minors or students up to the age of 25, based on the guidance issued by the Greek Independent Authority for Public Revenue (AADE) that she referenced.
However, the purpose of the transfer remains a critical factor. A different tax treatment may apply when the money does not relate to ordinary living needs but instead constitutes what is effectively a cash gift.
Qualifying everyday expenses include those related to the child’s daily life, such as student rent, tuition fees, books, transport, and other living costs. As Vombiraki explained, amounts covering pocket money for a minor or a student up to the age of 25 do not need to be declared as a gift through myProperty, and there is no set monetary cap for such transfers.
What is important, however, is that a clear description is included with every transfer. Noting the reason for the transaction can prove particularly useful in the event of a future tax audit. “It is good practice to include a description with every transfer, so we can remember what it was for in the future,” the tax expert noted, emphasising that a clear description helps document the reason the transaction took place.
What the rules are when a transfer is linked to a property purchase or other major expense
The situation is entirely different when a money transfer is not simply pocket money but is used to acquire an asset or fund a significant financial activity.
In cases involving the purchase of a property or a vehicle, the creation of savings or an investment, the establishment of a business, or the repayment of a personal loan, the transfer may be linked to a gift or parental provision and requires a different tax treatment. “In these cases, we have an increase in wealth,” Vombiraki explained, noting that in such circumstances it is safer to follow the prescribed procedure and formally declare the gift — even if no tax ultimately becomes payable.
The process, as she described, involves transferring the funds from one bank account to another and declaring the gift through the myProperty platform.
The €800,000 tax-free threshold and gift tax categories
The degree of kinship between the person giving and the person receiving the money plays a crucial role in determining how cash gifts are taxed. For the first category of relatives, a tax-free threshold of €800,000 applies, provided the gift or parental provision is made through the prescribed banking channel. This category includes, among others, spouses and civil partners, children, and grandparents transferring to grandchildren.
For amounts exceeding the tax-free threshold, a tax rate of 10% applies to the excess amount, according to what was stated during the programme.
Special attention is needed, however, when a cash gift is not made through the banking system. If the banking procedure is not followed, a 10% tax is levied from the very first euro — even between a parent and child — as the tax expert clarified.
What the rules are for transfers between siblings
Transfers of money between siblings are treated differently for tax purposes. Siblings fall under the second category of kinship, and cash gifts between them are taxed at 20% from the very first euro. Other family relationships not included in the first category also fall under the second category, while a third category exists beyond that.
For money transfers between friends, acquaintances, and other unrelated third parties, the tax rate rises to 40% from the first euro, according to the figures presented on the programme.
Vombiraki also issued a warning about so-called “triangular” transfers — cases in which money is routed through a third party, for example from one sibling to a parent and then on to another sibling. Such transactions may be subject to tax scrutiny and do not circumvent the applicable taxation rules.
The importance of the transfer description
Considerable emphasis was placed throughout the discussion on the description that accompanies every bank transfer or IRIS payment.
The advice to taxpayers is to avoid vague or humorous descriptions and instead clearly state the genuine reason for the transaction. As was noted during the programme, the transfer description effectively functions as a personal income and expenditure log, recording exactly why a particular transfer was made.
A proper description does not in itself exempt a transfer from tax, but it does help document the transaction and demonstrate the real reason the money was moved.
