– The obligation of notaries to attach the certificate of article 105 of Law 2961/2001 to real estate transfer contracts with compelling reason is abolished.
– The procedure for withholding by the notary public the apportionable inheritance and donation tax during the transfer of real estate with compelling reason is abolished.
– The responsibility of the last owner of the inherited property, to whom the property has fallen under a contract for onerous reasons.
– The cases of transfer of movable assets by banks, companies, others are expanding legal entities etc. with the withholding of the tax on inheritances, donations, parental benefits from these persons and its return to the tax administration.
– The right of the State in cases of taxation of inheritances, donations is time-barred , parental benefits and winnings from games of chance with a tax period up to 31/12/2008, for which a certificate of article 105 of Law 2961/2001 is not required.
– Matters of granting the certificate of article 105 of Law 2961/2001 are regulated in cases with a taxation period from 1/1/2009 to 12/31/2014 and from 1/1/2015 onwards.
The entire AADE circular
GENERAL DIRECTORATE OF TAXATION
DIRECTORATE OF CAPITAL AND WEALTH TAXATION APPLICATION
SECTION B’
E 2020/2023
Subject: “Providing clarifications and instructions for granting certificates of Article 105 of Law 2961/2001 (Government Gazette A’ 266) and the statute of limitations for cases in the taxation of inheritances, donations and parental benefits”.
SUMMARY
A) SUBJECT
Circular to provide clarifications and instructions regarding the implementation of the provisions of articles 17 to 22 of chapter B’ “Modernization of the framework for the proof of awareness, other relevant provisions for the facilitation of property transfers and other property taxation provisions” of Law 5036/2023 (A 77) “Framework for debt settlement and other tax and customs regulations, protection of pensions against inflation and other provisions to support society and entrepreneurship”,
B) CONTENT
The content of the circular is the provision of clarifications and instructions regarding the changes brought about by Law 5036/2023 of par. 5 of article 82 of article 83, of par. 5 of article 102, of par. 1 of article 105, par. 1 of article 107 and par. 1 of article 112 of the Code of Provisions on Taxation of Inheritances, Donations, Parental Allowances and Winnings from Games of Chance ratified by law 2961/2001 hereinafter Code . In particular, issues related to:
a) the payment of property tax due to death or donation/parental benefit in case of transfer of property due to donation or parental benefit,
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b) the abolition of the withholding procedure by the notary public of the apportionable inheritance or donation tax upon the transfer of real estate with compelling reason,
c) the abolition of the obligation of notaries to attach the certificate of article 105 of the Code to the transferable, with compelling reason, contracts,
d) the abolition of the responsibility of the last owner of an inherited property, in which has acquired the property under a contract for onerous reasons,
e) the expansion of the cases of payment of movable property tax with withholding,
f) the limitation of the State’s right to impose taxes and other related matters.
C) SCOPE
The circular concerns all natural and legal persons, D.O.Y. and notaries.
We provide clarifications and instructions for the correct and uniform application of the provisions of articles 17 to 22 of Law 5036/2023. In particular:
1. With the provisions of article 22 of Law 5036/2023, paragraph 1 of article 112 of the Code, concerning the obligation of notaries, is amended for attachment of the certificate of article 105 of the Code to transfer contracts (purchase, donation or parental provision). In particular, from the entry into force of Law 5036/2023 (28/3/2023), the following apply:
a) When drawing up a notarial document with the in which the ownership of a property is transferred or real rights are assigned with a compelling reason to a property, acquired due to death, donation or parental benefit, the certificate of article 105 of the Code is no longer required to be attached to the transfer contract, but an explicit mention is made by the notary in the contract that has been submitted by the debtor, the case-by-case declaration (inheritance, donation or parental benefit tax).
Also, in the above cases, the procedure for withholding the tax due the price of its sale and performance in D.O.Y. by the notary public (article 17 of Law 5036/2023 which amends paragraph 5 of article 82 of the Code).
b) In other cases of transfer it continues that the obligation to attach the certificate of article 105 of the Code applies.
In particular, a certificate is required:
– ba) when drawing up a notarial document, by which ownership is transferred by donation or parental provision or real rights are assigned from these causes in real estate or movable property, acquired due to death, donation or parental provision,
– bb) when drawing up a notarial document by which a claim acquired from any of the above causes is paid off or assigned.
Consequently, from 28/3/2023 the D.O.Y. they cease to issue certificates of article 105 of the Code for the transfer of real estate or the establishment of real rights over them with compelling reason. The applications that may be pending in the D.O.Y. for the issuance of certificates, as long as they concern the transfer of real estate with compelling reason, they are placed on file.
2. With the provisions of article 18 of law 5036/2023, par. 5 in article 83 of the Code and it is defined that the last owner, who has acquired the property subject to inheritance, donation or parental benefit tax by contract for consideration, is exempted from joint and several liability with the original liable party. That is, the last owner (buyer of the property) is no longer responsible for the payment of any tax (inheritance, donation or parental benefit) that has been assessed against the seller of the property. The responsibility of the last owner is still valid in other cases and in particular when the last owner has acquired the property with a contract of donation or parental provision.
3. With the provisions of article 19 of law 5036/2023, paragraph 5 of article 102 of the Code is amended and matters of limitation of the State’s right to impose taxes on inheritances, donations, parental benefits and winnings from games of chance are regulated. In particular, the following are defined:
a. In cases with the time of creation of the tax liability until 31-12-2008, the right of the public to impose taxes on inheritances, donations, parental benefits and winnings from games of chance is time-barred. For the above cases, if any are pending in the D.O.Y. declarations (initial or amending) of inheritance, donation and parental benefit tax, which on 3/28/2023 have not been processed and have not been used for the drawing up of a notarial deed, no action is taken by the D.O.Y. and related statements are placed on file. Also, for the above cases from 28/3/2023, an audit order cannot be issued or an audit can be carried out or tax assessment acts can be notified, while the cases that may be pending for a tax audit are placed on file. When calculating the tax on inheritances, donations and parental benefits in cases, for which the tax liability arises from 28/03/2023, previous donations and parental benefits, which were set up up to 31-12-2008, are not taken into account.
Furthermore, in these cases, from 28/3/2023, the issuance of a certificate of Article 105 of the Code and the related applications for the issuance of a certificate that may be pending in D .O.Y. are likewise placed on file. Instead of the certificate:
- i) for the acquisitions due to death, a death certificate from which it can be concluded that the death of the heir or donor due to death occurred up to and including 31.12.2008, as well as a responsible declaration of the debtor that there is no case of shifting the time of generation of the tax liability,
- ii) for living donations and parental benefits, a copy of the relevant contract drawn up up to and including December 31, 2008 or a certification by the notary who drew up the contract that , this was drawn up up to and including December 31, 2008, as well as a responsible declaration by the debtor (and not the notary) that there is no case of shifting the time of generation of the tax liability.
b. For cases in which the tax liability arose from 1.1.2009 up to and including 31.12.2014, a certificate is required for as long as the State has not waived its right to notify the act of imposing a tax and a fine. The provisions of paragraph 1 of article 102 of the Code apply to these statutes of limitations.
Examples
- i) For a death in the year 2010 an inheritance tax return is submitted by the heir in the year 2012 for a property. The State loses its right to notify a tax and fine act after ten years from the end of the year in which the declaration was submitted, so on 12/31/2022. If this property is transferred by donation or parental benefit from 1/1/2023 onwards, no certificate is required, due to the statute of limitations of the State’s right to levy the tax.
- ii) For death on 1/31/2009 the property heir has not submitted an inheritance tax return. The deadline for submission of the declaration expired within the year 2009 and the State loses its right to notify an act of imposition of tax and fine after the lapse of fifteen years from the end of the year 2009, so on 31/12/2024. If this property is transferred by donation or parental benefit from 1/1/2025 onwards, a certificate will not be required, due to the statute of limitations of the State’s right to impose the tax.
iii) For death on 1/1/2010, the heir acquires two properties by intestate. The deadline for submission of the declaration expired within the year 2010. An inheritance tax declaration is submitted in the year 2011 for the one property. In the year 2023, both inherited properties are transferred by parental provision.
Regarding the property for which an inheritance tax declaration has been submitted, no certificate is required, due to the statute of limitations of the State’s right to enforce the tax.
As regards the second property, for which no inheritance tax declaration was submitted, the State waives its right to notify an enforcement act tax and fine after the lapse of fifteen years from the end of the year 2010, so on 31/12/2025. Therefore, for this property before its transfer, an inheritance tax declaration must be submitted by the heir and a certificate issued.
c. In the cases for which the tax liability arises from 1/1/2015 onwards, a certificate is required for five (5) additional years from the end of the year in which the deadline for submitting the declaration expires and in any case not required after the lapse of ten (10) years from the end of the year in which the deadline for submitting the gift inheritance and parental benefit tax return expires (refer to the provisions of articles 62, 63 and 68 of the Code on deadlines for submitting the declarations ). That is, in the above cases, the certificate is required for as long as the State has not waived its right to notify the act of imposing a tax and a fine in accordance with the provisions of Article 36 of the Tax Code.
Examples
j) For death on 1/1/2015 the heir acquires two properties by intestate. The deadline for submitting the return was in 2015. A late initial inheritance tax return is submitted in 2016 for the one property. In the year 2017, an amending declaration is also submitted for the aforementioned property. In the year 2023, both inherited properties are transferred by parental allowance.
Regarding the property for which inheritance tax declarations have been submitted, from 1/1/2021 no certificate is required, due to the statute of limitations of the State’s right to levy the tax.
Regarding the second property, for which no inheritance tax declaration was submitted, the State deducts of his right to be notified of a tax and penalty act after ten years from the end of the year 2015, i.e. on 12/31/2025. Therefore, for this property before its transfer, an inheritance tax declaration must be submitted by the heir and a certificate issued.
If the above property is transferred by donation /parental provision from 1/1/2026 onwards no certificate required.
- ii) Time of death 2017. Will published 4/7/2022. Expiration of the nine-month deadline for submitting a declaration for the assets left by the heir with the will on 4/5/2023. Submission of a timely inheritance tax return.
In this particular case, a certificate is not required in the case of a donation or parental benefit from 1/1/2029, in order for the assets data, which have been included in the inheritance tax declaration, and from 1/1/2034, for assets for which no inheritance tax declaration has been submitted.
iii ) Acquisition of property with parental support contract in February 2015. In this case, a certificate is no longer required in case of donation or parental support from 1/1/2021.
- iv) Time of death 1/2/2017. Expiration of the nine-month deadline for submitting an inheritance tax return 2/11/2017. Late declaration submission 1/3/2022. In this particular case, a certificate is no longer required in the case of a donation or parental benefit from 1/1/2023.
2. With the provisions of article 21 of Law 5036/2023 amends paragraph 1 of article 107 of the Code, which concerns the obligations of persons (Banks, companies, natural or legal persons, entities, etc.) to return movable assets, sums of money, etc. which they own (and which are the subject of the cause of death or gift of possession). In particular, in order for these assets to be transferred from the above-mentioned persons who own them to the beneficiary (heir, donee), the latter must provide these persons with a certificate of article 105 on payment or non-payment of the corresponding tax. However, if it is specifically about sums of money (such as deposits, insurance benefits due to death or donation, etc.), and for the greater convenience of taxpayers and to simplify the procedure, the return of these by Banks, companies, entities, etc., is also carried out by withholding the tax from these persons – by presenting the certificate of article 105 of the Code – and returning the tax to the tax administration, with the care of these persons or entities until the next return of the assets.
THE ADMINISTRATOR OF THE INDEPENDENT PUBLIC REVENUE AUTHORITY
GEORGIOS PITSILIS
