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Old 06.11.2020, 08:54
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Gift from abroad taxation

Hi all,

My parents are selling apartment back in my home country (Poland), and they want to give me part of the money as a gift. I assume I need to ask them to transfer to my Swiss account directly, not to Polish one, since it would be considered my own transfer. However, what I am wondering is if in this situation I need to pay any tax. I searched the Internet and I know it depends on the canton (I live in Zurich). Would any of you know if there is any tax for gift from parents in such situation? Or you could direct me to some tax specialist that will not rip me off?
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Old 06.11.2020, 09:53
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Re: Gift from abroad taxation

From parents, 200'000 Franc tax free. The rest at 2-6%.

https://www.credit-suisse.com/media/...tabelle-en.pdf

There is a calculator for the exact amount here: https://www.zh.ch/de/steuern-finanze...ml#-1791942666

For 500K -> 12K tax.
For 1M -> 41.4K tax
For 200K -> 0 tax

For some cantons, the allowance is only usable once, and after that the gift or inheritance is fully taxed. Others there is an expiry period. I don't know if the tax rate applied in cumulative. But I'd guess it probably in some cantons.
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Old 06.11.2020, 10:04
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Re: Gift from abroad taxation

Ah great, then I have no issue since value will not exceed that. Thanks!
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Old 06.11.2020, 10:11
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Re: Gift from abroad taxation

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From parents, 200'000 Franc tax free. The rest at 2-6%.

https://www.credit-suisse.com/media/...tabelle-en.pdf

There is a calculator for the exact amount here: https://www.zh.ch/de/steuern-finanze...ml#-1791942666

For 500K -> 12K tax.
For 1M -> 41.4K tax
For 200K -> 0 tax

For some cantons, the allowance is only usable once, and after that the gift or inheritance is fully taxed. Others there is an expiry period. I don't know if the tax rate applied in cumulative. But I'd guess it probably in some cantons.
I may be wrong, but I think you're reading that table wrong - surely the top line is the recipient, not the giver?

In which case parent to children is tax free in Zurich.

(Otherwise child to parent gifts would be lower tax than parent to child, which I really doubt).
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Old 06.11.2020, 10:24
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Re: Gift from abroad taxation

To add to the above comments, the 2019 Ct. Zurich tax instructions on p.29 say (translation):

"It is only possible to refrain from filing a special tax return for the gift tax:
- for gifts to the spouse or to the registered same-sex partner;
- for gifts to a descendant;
- for occasional gifts not exceeding the value of CHF 5,000 each.
No inheritance or gift tax is payable on such gifts."

https://www.zh.ch/content/dam/zhweb/...9_HA%20DEF.pdf
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Old 06.11.2020, 10:37
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Re: Gift from abroad taxation

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To add to the above comments, the 2019 Ct. Zurich tax instructions on p.29 say (translation):

"It is only possible to refrain from filing a special tax return for the gift tax:
- for gifts to the spouse or to the registered same-sex partner;
- for gifts to a descendant;
- for occasional gifts not exceeding the value of CHF 5,000 each.
No inheritance or gift tax is payable on such gifts."
To add even more to the above:
Quote:
Für alle unentgeltlichen Zuwendungen durch Personen, die im Kanton Zürich wohnen, oder für Zuwendungen von zürcherischen Liegenschaften durch ausserhalb des Kantons wohnhafte Personen hat der Empfänger innert dreier Monate nach Vollzug der Schenkung oder des Erbvorbezuges eine besondere Schenkungssteuererklärung beim Kantonalen Steueramt Zürich, Dienstabteilung Inventarkontrolle/Erbschaftssteuer, Bändliweg 21, Postfach, 8090 Zürich, einzureichen.
In short and in English: Canton Zurich gift tax is only due in case the giver lives in the canton or real estate located in the canton is gifted. Otherwise no gift tax. Gift tax is separate from regular taxation. If a gift tax filling is needed it must be done within 3 months of receiving the gift. There is no gift or inheritance gift tax on federal level.

Nevertheless a considerable gift should be disclosed on the regular tax return as this explains a sudden increase in wealth (it won't be taxed).
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Old 06.11.2020, 11:01
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Re: Gift from abroad taxation

Thank you for all your answer, this helps a lot!
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Old 06.11.2020, 13:11
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Re: Gift from abroad taxation

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I may be wrong, but I think you're reading that table wrong - surely the top line is the recipient, not the giver?

In which case parent to children is tax free in Zurich.

(Otherwise child to parent gifts would be lower tax than parent to child, which I really doubt).
No, you're right. My eyes skipped a column...
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Old 08.11.2020, 22:25
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Re: Gift from abroad taxation

Hey, I have studied this topic, I am Polish as well and also will receive some funds from my parents (I live in Geneva, so it may be different in Zurich, but I doubt it, should be similar)

1./ Doesnt matter where they transfer you the funds, Polish or Swiss bank. Why would they have to transfer it to Swiss bank at all? I dont think it matters, gift is a gift and tax laws do not treat it different way whether you send it to Russian or Norwegian or Polish account.

2/ In most cantons (or all of them) gifts for direct family members such as father-children are tax free or at least to certain threshold. In Geneva there is no tax at all if I receive money from my father.

3/ In Geneva I must declare such donation within 2 months from the date of bank transfer. This is done by special declaration, which you send to tax authorities. Declaration is 1 page long, simple (names of involved parties, relationship between them, some personal data). You attach proof of transfer, for example bank transfer proof, which you can simply download from your bank.

4/ Please remember to declare donation in Poland to Polish tax office (urząd skarbowy) . You will not pay any tax if this is from your parents, but you must declare it within 6 months from the day of transfer, even if you do not live in Poland at all (no domicile). Please read about it, as there is lots of misconceptions about it - people think that because one is not domiciled in Poland (if you are not), you dont pay any tax. You DO if you will not declare it as a donation within 6 months! There is special form for donations, you can find lots of info in the internet. Also, do some internet research or consult with tax advisor WHERE you send this declaration. I thought it was my local tax office (where my parents live and where I lived years ago before I moved to Switzerland), but no, it seems it is Naczelnik Trzeciego urzędu skarbowego Warszawa Sródmiescie (you will find some articles online). Again, I am not tax advisor and I cannot confirm it 100 %, but it seems to be the case.
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