Joint bank accounts are a popular choice for families seeking simplified management of their finances. However, operating these accounts involves significant tax risks, especially when financial transactions are conducted without proper legal coverage.
When joint bank accounts become a tax problem
Using joint bank accounts can cause unexpected tax consequences. When a joint account holder withdraws funds and transfers them to their personal account, the tax authorities may characterize the transaction as a gift.
The critical point is the absence of proper declaration to tax authorities. Without legal documentation, a simple money transfer can evolve into a taxable event with serious financial implications.
Real case that triggered tax authority intervention
A characteristic case examined by the Dispute Resolution Directorate involved transferring money from a joint family account to a child’s individual account. This transaction was treated fiscally as a gift, despite objections from those involved.
According to current legislation, when a joint account holder withdraws amounts from joint bank accounts without contributing proportionally, the act is considered a gift. This applies regardless of family relationships or the intentions of those involved.
How tax audits work
Tax authorities systematically monitor movements in joint bank accounts. When they detect withdrawals or transfers exceeding the joint account holder’s contribution, they activate audit procedures.
Special attention is given to large amounts transferred to third-party accounts. In such cases, the tax office may impose gift tax or parental provision tax, unless there is the necessary declaration on the myPROPERTY platform.
Tax-free limits and legal gifts
Legislation provides significant tax relief for specific categories of gifts. Financial provisions up to 800,000 euros between first-degree relatives remain tax-free.
First-degree relatives include parents, children, spouses, grandparents, and grandchildren. The prerequisite for exemption is conducting the transaction through the banking system and submitting a relevant declaration. To date, the Dispute Resolution Directorate has examined more than 2,000 cases of illegal transactions, resulting in the imposition of proportionate taxes.
Rules for financial parental provisions
Declarations of financial parental provisions are submitted exclusively through the myPROPERTY electronic platform. This is followed by cross-checking with data that banks send to the tax authorities.
If the bank does not confirm the transaction and the taxpayer cannot provide the necessary documentation, tax is imposed without a tax-free threshold. This means taxation from the first euro with rates of 10%, 20%, or 40%, depending on the degree of relationship.
Important conditions you need to know
Before proceeding with financial parental provisions or gifts, it is essential to consider the following rules:
• All financial provisions must be conducted through financial institutions to be legally proven
• Cash parental provisions are taxed at 10% without a tax-free threshold
• Successive gifts aimed at circumventing tax obligations are strictly monitored by tax authorities
• Time periods shorter than six months between successive gifts trigger audits
Consequences of illegal successive gifts
Tax authorities thoroughly investigate cases of successive gifts aimed at tax avoidance. When it’s proven that the final beneficiary doesn’t belong to the first category of entitled recipients, a 20% tax is imposed without a tax-free threshold.
A characteristic example is a gift from child to parent and subsequently from parent to sibling. Such practices are considered tax evasion attempts and are dealt with strictly.
