Tax guidelines and regulations for large money transfers into Europe

If your recipient lives in a country with a gift tax or if you’re sending money for business purposes, they may be required to pay taxes on the transfer. And you may be required to report it on your yearly tax return in the US — regardless of whether or not you owe anything.

How Europe regulates large remittances

Each country in Europe has its own laws on gift taxes — the tax you or 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.

If the money is for business purposes, such as purchasing goods or receiving advice, your recipient will likely have to report it on their taxes as foreign income.

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 in Europe if my recipient fails to file?

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, which means that if your recipient doesn’t list a transfer on their taxes, it will likely be found out. 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. If you’re sending more than $10,000 for business purposes or $15,000 as a gift, or if you’re sending money to an overseas account in your name, you’ll likely be required to report it to 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 much money can I send to Europe?

The US government doesn’t put a cap on how much money you can send overseas. But some transfer providers do, so choose a limit-free provider like Xe if you’re planning a large transfer.

How my recipient in Europe get the money?

Depending on which provider you choose, your options include bank-to-bank transfers, cash pickups and transfers to mobile wallets.

If your loved one or associate is picking up the cash 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.

Bottom line

If you’re initiating a large overseas transfer, both you and your recipient may be required to report it on your taxes — and depending on which country they live in, they may need to pay a gift tax or report it as foreign income.

As with all international money transfers, compare providers to get the best deal before initiating a transfer, and be protect yourself from fraud by only sending money to people you know. Using a reputable provider can safeguard you from potential scams.

Frequently asked questions

• I'm interested in starting an import/export business. Where do I start

  The US trades some $5 million with countries worldwide each year. An import/export business is a way for you to carve a slice from that pie.

  To help you get started, we’ve put together guides to starting an import/export business in electronics, machinery and other industries. Learn about what to expect for startup costs, registering your business and more.

• Will I have to pay a gift tax?

  While you’re required to file a gift tax return in the US if you’ve given away more than $15,000 in the past year, you won’t be required to pay any taxes until you’ve surpassed the $11.180 million lifetime exemption amount.

• Can I avoid IRS penalties if I fail to file?

  Yes, you can avoid penalties if you can show a reasonable cause for your failure to file, such as a house fire, serious illness or natural disaster.

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