A few euros for everyday expenses, some financial help from grandparents, or friends settling up a shared bill do not automatically bring the tax office into the picture just because the transfer was made through IRIS, Greece’s instant payments network.

Some transfers, however, can change their tax character. The Independent Authority for Public Revenue (AADE), Greece’s tax authority, has now drawn a line between everyday small sums and genuine cash gifts, focusing chiefly on larger amounts, repeated transactions, and money routed through third parties.

The distinction carries a real cost. It can make the difference between paying no tax at all, with an allowance of up to €800,000, and facing a levy of 20%, or even 40%, from the very first euro.

The tax authority’s central point is that IRIS is simply the channel through which the money moves. Using it does not, by itself, turn a transaction into a gift. What matters is what actually lies behind the transfer, the size and frequency of the amounts involved, and who ultimately receives the money.

As a result, pocket money that parents and grandparents give children and grandchildren for everyday needs and small expenses is not treated as a cash gift requiring a declaration each time on myPROPERTY, the tax authority’s online platform for declaring gifts and parental provisions. The same applies to small sums exchanged between friends and close acquaintances, for splitting a bill or reimbursing shared expenses, for example.

There is, however, no fixed cut-off figure below which a transfer automatically counts as pocket money and above which it becomes a gift. AADE looks at the overall picture and the actual circumstances of each case.

The alarm can be raised once transfers settle into a clear pattern. Repeated transactions at a steady frequency can come under scrutiny, particularly when they involve identical or large sums and look more like a systematic transfer of money than the covering of everyday needs.

Once a transfer amounts to a genuine cash gift or parental provision, a distinct legal category under Greek law covering lifetime transfers from parent to child, different rules apply. The main pitfalls are as follows.

1. The €800,000 tax-free allowance

Cash gifts and parental provisions to Category A relatives, among them children, parents, spouses and grandchildren, are covered by a tax-free allowance of up to €800,000. This requires the money to have moved through the banking system and the relevant declaration to have been filed. Tax of 10% is charged on any amount above €800,000.

The allowance, therefore, does not mean that a genuine parental provision or gift running into hundreds of thousands of euros can simply pass from one account to another without being declared.

2. The transfer is cross-checked

Declarations of cash parental provisions and gifts are filed electronically through the myPROPERTY platform, and AADE checks each transfer against the data submitted by banks. If the bank does not confirm the transfer and the necessary supporting documents are not produced, the tax-free allowance can be lost. In that case, tax may be charged from the first euro, at a rate of 10%, 20% or 40%, depending on how closely related the parties are.

3. The costly cash trap

The €800,000 tax-free allowance is tied to money moving through the banking system. If a parental provision is made in cash, it is taxed separately at a flat 10%, with no tax-free threshold at all.

The difference can be substantial. A parental provision of €100,000 made through the banking system and properly declared can be entirely tax-free. If the same sum is handed over in cash, the tax bill reaches €10,000.

4. Successive gifts and the six-month rule

Particular care is needed where money passes successively from one relative to another. A typical example is a transfer from a child to a parent, followed by a transfer from that parent to another child. If the real circumstances show that the underlying purpose was, from the outset, to move money from one sibling to another, the tax office can treat the transaction according to the actual relationship between the original donor and the final recipient. In that case, tax of 20% can be charged from the first euro.

The time between the successive transfers is also critical. When the gap is short, and in particular does not exceed six months, it can be treated as grounds for a tax audit.

5. Take care with joint accounts

Transferring money into a joint bank account does not automatically mean a gift has been made to every holder of that account. What matters in any audit is who actually used the money.

If, for instance, a financial provision is paid into an account a child holds jointly with a third party, and it can be shown that the child used the money, the joint account alone does not create a gift to the other holder.

If, however, the money is used by the third party, it can be treated as a gift to that person, and taxed at the rate that corresponds to their actual relationship to the donor.

6. Siblings, other relatives and friends

The €800,000 tax-free allowance does not apply to every family relationship. Cash gifts to Category B relatives are taxed from the first euro at 20%, while for Category C, which includes unrelated people such as friends, the rate reaches 40%.

This means the tax gap between two outwardly similar bank transfers can be enormous. A financial provision from parent to child can, provided the conditions are met, fall within the €800,000 allowance, while a genuine cash gift to someone in a different category can be taxed from the very first euro.

The practical rule that emerges from AADE’s guidance is that the method of transfer does not determine the tax treatment. IRIS does not, by itself, turn pocket money into a gift, and small everyday transactions do not need to be declared one by one.

Once financial help takes on the features of a genuine transfer of wealth, however, what becomes decisive is the family relationship involved, the banking trail, the declaration on myPROPERTY, and the real, final beneficiary. These are the details that can ultimately make the difference between paying no tax at all and facing a charge of up to 40%.