Here’s what to consider when emigrating, funding a business or studying abroad requires a large transfer.
How Europe regulates large remittances
Each country in Europe has its own gift tax — the tax your recipient pays when you gift money or property whose value is above a specified amount. Some countries exempt gifts from the burden of taxation altogether, while others consider the relationship of you to your gift beneficiary.
Here’s a general rundown of how European countries handle the gift tax.
|Country||Gift size exempt from taxation|
|Albania||No gift tax|
|Andorra||No gift tax|
|Armenia||No gift tax|
|Austria||No gift tax|
|Azerbaijan||Exempt from gift tax if received from family members|
|Belarus||Tax law provides exemption for inheritances and partial exemption for general gifts|
|Belgium||3% to 30% of the gift amount|
|Bosnia and Herzegovina||2% to 10% of the gift amount|
|Bulgaria||0.4% to 0.8% on inheritances from family members and 3.3% to 6.6% for other beneficiaries|
|Croatia||5% if gift is worth more than 50,000 HRK|
|Cyprus||No gift tax|
|Czech Republic||1% to 40% depending on degree of family relationship|
|Denmark||No gift tax|
|Estonia||No gift tax|
|Finland||€1 to €4,999|
|France||5% to 45% of gift amount, depending on degree of relationship|
|Georgia||No gift tax, though inheritance taxes depend on degree of relationship|
|Germany||Remote relatives or family typically pay higher taxes|
|Greece||Varies by relationship of gifter to giftee|
|Hungary||2% to 40% of gift amount, depending on degree of relationship|
|Iceland||Gifts for special occasions are exempt provided they’re “not of extraordinary value”|
|Ireland||Varies by relationship of gifter to giftee|
|Italy||Up to 1 million euros exempt for spouses, children and grandchildren|
|Kazakhstan||No gift tax|
|Latvia||No gift tax|
|Liechtenstein||No gift tax|
|Lithuania||€2,500 provided that gifts come from close relatives|
|Luxembourg||0% to 48% of gift amount, depending on relationship to beneficiary|
|Macedonia||2% to 5% of gift amount, depending on relationship to beneficiary|
|Malta||No gift tax|
|Moldova||No gift tax|
|Monaco||Rates vary depending on relationship to beneficiary|
|Montenegro||No gift tax|
|Netherlands||Exempt up to 4,479 euros, depending on relationship to beneficiary, or up to 22,379 euros once in a child’s lifetime|
|Norway||No gift tax|
|Poland||Rates vary by relationship of donor to donee|
|Portugal||No gift tax|
|Romania||No gift tax|
|Russia||No gift tax|
|San Marino||Up to 1 million euros exempt for spouses, children and grandchildren|
|Serbia||1.5% to 2.5%, depending on relationship to beneficiary|
|Slovakia||No gift tax|
|Slovenia||€5,000 for immediate successors|
|Spain||7.65% to 34.00%, depending on value and relationship to beneficiary|
|Sweden||No gift tax|
|Switzerland||No gift tax|
|Turkey||10% to 30%, depending on the gift’s value and relationship to beneficiary|
|Ukraine||No gift tax|
|United Kingdom||No gift tax|
|Vatican City||Up to 1 million euros exempt for spouses, children and grandchildren|
What are the penalties for not filing a large remittance?
Just as US citizens are required to submit annual tax returns, so too are citizens of most European countries. If your recipient fails to declare a large remittance on their tax returns, they could face stiff financial penalties and even jail time.
In a post-9/11 world, financial institutions and independent transfer specialists are required to record the source of large transfers and report suspicious deposits to the government. Encourage your family and friends in Europe to declare large gifts to avoid further trouble down the road.
Do I have to report large transfers out of the US?
Yes. The US government closely monitors transactions into and out of the country with a focus on large or otherwise suspicious transfers. If you’re sending more than $10,000, you’ll need to abide by US laws put in place to both protect your money and protect the interests of the government.
By law, banks report all cash transactions that exceed $10,000 — and any transaction of any amount that alerts their suspicions. Independent money transfer specialists are sometimes required to report at thresholds as low as $1,000.
To avoid the severe penalties (including jail time) that could come with a failure to report large sums of money out of the country, speak with a professional to guarantee that everything is above board and complies with the laws of all countries involved.
Sending a lot of money out of the country? Know what the IRS expects of you.
How will my loved ones receive my remittance in Europe?
Your many options for sending money to Europe include bank-to-bank transfers, cash pickups and transfers to mobile wallets.
If your friends or family are picking up your money in person, they may need to show government-issued ID or a transaction confirmation number to prove they’re your intended recipient. For electronic transfers, they may not need to provide any additional information.
Confirm with your bank or independent money transfer provider the exact information your friends and family might need to receive your funds.
As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.
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