A bank transfer between two friends that was reversed on the same day turned into a tax case with significant consequences. Under DED Decision 1544/2026, it was ruled that the transfer still constitutes a gift for tax purposes, despite the immediate return of the funds, because simply claiming that the transaction was made by mistake is not sufficient to overturn its tax consequences.

The case concerned a bank transfer of €51,801 between two friends. A few hours later, the money was returned to the original sender, with both parties claiming that the transfer had been made accidentally and that they had intended to carry out a different banking transaction. They asked the tax authorities to treat the transfer as though it had never produced any legal effects, thereby avoiding the imposition of gift tax.

However, the Dispute Resolution Directorate (DED) rejected the claim.

As stated in the decision, under the provisions of the Greek Civil Code, a legal transaction carried out due to mistake is not automatically void. Rather, it is voidable, meaning that a court decision is required to invalidate it. Until such a ruling is issued, the transaction continues to produce its legal effects and, consequently, any tax obligations arising from it remain in force.

The DED also emphasized that the tax liability arises the moment the funds are credited to the recipient’s bank account. The subsequent return of the money does not alter the fact that, for tax purposes, the gift is considered to have taken place at the time of the original transfer.

In other words, neither returning the money on the same day nor submitting a request to the tax office is sufficient to eliminate the gift tax. The tax administration is bound by the legal validity of the transaction unless it is annulled by a final court judgment.

The decision also contains another important clarification. Even if both the donor and the recipient mutually agree to revoke the gift and return the funds, that return is not treated as a new taxable gift. However, the gift tax imposed on the original transfer remains payable. In other words, a mutual agreement between the parties does not erase the tax obligation that arose when the initial transfer was completed.

Furthermore, the DED rejected the taxpayer’s request to cancel the tax on the grounds that there was clearly no tax liability, ruling that her claims were not supported by sufficiently clear and complete evidence. Among other issues, the authority noted that the allegedly relevant power of attorney had not been submitted and that there were doubts regarding the actual circumstances surrounding the transaction.

The DED’s decision effectively serves as guidance for similar cases in the future. It makes clear that returning money on the same day is not enough to eliminate gift tax, while a claim that the transaction resulted from a mistake can only succeed if a court first issues a decision annulling the transaction.

Gift Tax Rules in Greece

The DED case involved two friends, meaning individuals who do not belong to the first category of relatives. The main rules governing cash gifts are as follows:

• Category A (spouses, parents, children, grandchildren): 10% tax, with a tax-free threshold of up to €800,000, provided the legal requirements are met and the transfer is made through the banking system.
• Category B (siblings, nieces and nephews, and certain other relatives): 20% gift tax on cash gifts.
• Category C (friends and all other persons not included in the first two categories): 40% gift tax on cash gifts.