A bank transfer to your child’s account. A large deposit toward buying a home. A few thousand euros for university tuition. Or a significant sum moving through a joint account. Even a payment via IRIS to a relative or close friend. All of these may seem like perfectly ordinary family matters — but as far as the tax authorities are concerned, that’s not always the case. “Pocket money,” when the amounts are substantial and the transaction isn’t properly documented, can attract serious tax scrutiny as a gift or parental provision. And that’s where the details make all the difference: there’s a world of difference between a tax-free allowance of up to €800,000 and being taxed from the very first euro.
Requirements. The generous €800,000 tax-free threshold applies to gifts and parental provisions made to Category A individuals — including, among others, children, grandchildren, parents, spouses, and civil partners — provided all legal requirements are met and the transfer is carried out through a financial institution. The critical point, therefore, is that a simple bank transfer is not enough. The parental provision or gift must be declared to Greece’s Independent Authority for Public Revenue (AADE) and the transaction must be verifiable.
“No cash.” Cash transactions are one of the biggest traps. If a parent hands their child a large amount in cash, the €800,000 tax-free threshold — which is tied specifically to transfers made through financial institutions — does not apply. In cases of monetary gifts or parental provisions to Category A individuals where the specific conditions are not met, a 10% tax is imposed. In plain terms: cash can turn a transaction that would otherwise fall within the tax-free limit into a fully taxable gift.
Siblings, nieces, nephews… and 20%. The €800,000 tax-free threshold does not apply to all relatives. Category B includes, among others, siblings, nieces, nephews, and grandparents. Monetary gifts to individuals in this category are subject to a flat 20% tax from the very first euro. For Category C — covering more distant relatives and non-relatives — the tax on monetary gifts can reach as high as 40% from the first euro. So before making any transfer, the first question isn’t only “how much am I sending?” but equally important: “who am I sending it to?”
Joint accounts. A joint bank account does not automatically serve as a tax shield. When a significant sum is transferred into an account with multiple holders, the tax authorities may investigate who actually provided the money, who received it, and — most importantly — who ultimately benefited from it. This becomes particularly critical when a parental provision intended for one child ends up being used by another co-holder of the account. In such cases, a different tax treatment may apply.
No fixed threshold. Small, routine transfers for everyday needs — covering living expenses, rent, or tuition — do not automatically constitute a taxable gift. However, there is no specific amount that the law universally defines as “pocket money.” When transfers become large, systematic, or inconsistent with a genuine underlying reason, the situation changes entirely. At that point, the tax authorities may request evidence of the origin and purpose of the funds.
Source of funds. The second major trap lies in the question: “where did the donor’s money come from?” Even when a parental provision has been properly declared, the parent must be able to document their financial capacity if this is requested during a tax audit. Income, savings, proceeds from asset sales, and other lawful sources can all help explain where the funds originated. Extra caution is required when a child uses a parental provision to purchase real estate or make another major expenditure. In those cases, properly declaring and evidencing the parental provision becomes even more important, as the amount may be used to cover a tax presumption — provided all applicable conditions are satisfied.
Checklist. Before a significant sum leaves your account, four things are essential: a legitimate reason, the correct procedure, a clear banking trail, and supporting documentation. The gift or parental provision must be declared in accordance with AADE’s process, and all banking records must be retained. It must also be clear who is giving the money, who is receiving it, and what their relationship is. For large amounts — especially when a property purchase is involved — coordinating with an accountant, notary, and bank before the transaction takes place can prove decisive. Because ultimately, what matters to the tax authorities isn’t just how much money changed hands. What matters is who gave it, who received it, why it was given, how it was transferred, and whether all of this can be proven. Family pocket money can be entirely legitimate. But when we’re talking about tens or hundreds of thousands of euros, family generosity also needs to be in proper tax order — because a single mistake in how the transfer is made can cost anywhere from 10% to 40% of the total amount.
Originally published in “Apogevmatini.”
