The The Tax Agency is clear about the consequences of trying to hide a donation under the guise of a loan. These practices can lead to significant financial penalties, in addition to the obligation to pay the corresponding taxes. Donations, regulated by Law 29/1987 on Inheritance and Donation Tax, are subject to a tax that varies according to the amount donated, the degree of relationship and the specific bonuses of each autonomous community, such as 99% in Andalusia for parents and children.
Lending money to a child, for example, is a very common act today, but if you try to pass off said loan for a donation, administration is clear, can have important tax consequenceswhich will be at least 50% of the amount that has not been paid to the Treasury, plus of course the corresponding amount.
The Civil Code in its article 618 establishes that a donation is “an act of liberality by which a person freely disposes of something in favor of another, who accepts it”. Besides, It will be considered a donation “provided that they do not constitute enforceable debts”.
For its part, a loan between individuals is regulated by Royal Legislative Decree 1/1993, which approves the Consolidated Text of the Tax on Property Transfers and Documented Legal Acts (ITP-AJD). This type of operations is currently exempt from taxation, but it is mandatory:
- Formalize the loan through a private document that includes the data of both parties, the amount, the interest rate (even if it is 0%), the repayment period and the payment method.
- Submit form 600 within 30 days of signing the loan.
Although it is not mandatory to make it a public deed, it may be advisable to provide greater legal security to the agreement.
Treasury fines hidden loans
The Tax Agency severely sanctions hidden loans, that is, those cases in which a loan is simulated to avoid paying the loan. Inheritance and Donation Tax. The fines vary depending on the infraction committed, as established in the General Tax Law (Law 58/2003):
- Minor violation: when the base of the sanction does not exceed 3,000 euros, whether or not there is concealment, or when the base exceeds that amount and there is no concealment. Minor infractions will be subject to a proportional financial fine of 50% of the amount that has not been paid to the Administration.
- serious violation: when the base of the sanction is greater than 3,000 euros and there has been concealment. This violation will be punishable by a proportional monetary fine of 50 to 100%. In addition, they are also considered serious when it is any type of amount and false documents have been used.
- Very serious violation: occurs when fraudulent means are used or when withheld amounts or passed-on account payments are stopped, when said amounts exceed 50% of the base of the sanction.