Donation Tax: rules, rates, and who must pay it in Italy

The donation tax is a levy applied when a person transfers, free of charge, assets, sums of money, or real estate to another. In Italy, this tax is closely linked to the relationship between the donor and the beneficiary and to the donated amount, with precise rules established by tax law. Knowing in detail when it must be paid, what the applicable rates are, and who is required to pay is essential to avoid mistakes or unpleasant penalties.

What is the donation tax

A donation is a legal act by which a person, out of liberality, transfers an asset or a sum of money to another party without receiving anything in return. According to Article 769 of the Civil Code, a donation must be made through a public deed before a notary in the presence of two witnesses. The deed must then be registered with the Revenue Agency within 30 days of signing, along with payment of the due taxes.

If the donation involves real estate, in addition to the donation tax, the mortgage tax and cadastral tax are also required, adding to the overall fiscal burden.

When the donation tax must be paid

Payment must be made within 180 days from the signing of the donation deed. The declaration is submitted by the donor to the Revenue Agency, and the tax may be paid via form F23/F24, bank transfer, or other authorized payment systems.

Deadlines must be strictly respected: in case of late payment, penalties of up to 240% of the tax due may apply, in addition to late-payment interest.

Donation tax rates and exemptions

The taxation of donations depends mainly on two factors:

1. The relationship between the donor and the beneficiary.
2. The value of the donation and any allowance provided by law.

The main rules currently in force are as follows:

• Spouse and direct-line relatives (parents, children, grandparents, grandchildren): allowance of €1,000,000 per beneficiary. Beyond this threshold, a 4% rate applies.
• Brothers and sisters: allowance of €100,000; beyond this threshold, a 6% rate applies.
• Other relatives up to the 4th degree and relatives by marriage up to the 3rd degree: no allowance, 6% rate.
• Other individuals (not related): no allowance, 8% rate.
• Severely disabled persons (Law 104/1992): higher allowance of €1,500,000, with variable rates (4%, 6%, or 8%) depending on the degree of kinship.

Practical example: the cost of donating €100,000

Let’s imagine a father deciding to donate €100,000 to his son: the amount falls entirely within the €1,000,000 allowance, so no tax is due.

The situation changes with a donation of the same amount between an uncle and a nephew: since no allowance applies, the 6% rate is charged, resulting in a €6,000 tax.

If instead a friend donates €100,000 to another friend, the applicable rate is 8%, leading to a €8,000 tax.

Who pays the donation tax

By law, the donation tax is payable by the beneficiary (the person receiving the asset or money). However, in practice, the donor often bears the fiscal costs to simplify the procedure. In any case, responsibility for declaring and registering the deed lies with the donor or with the notary drafting the deed.

Exemptions from the donation tax

Not everyone is required to pay. Donations are exempt when made to:

• Public entities;
• Foundations and legally recognized associations with purposes of assistance, research, or public utility;
• Non-profit organizations (ONLUS) and banking foundations.

These categories benefit from exemption due to their social role in serving the community.

Donations and estate planning

A donation is also a tool for estate and succession planning. Through donations, it is possible to anticipate the transfer of assets and wealth, reducing potential inheritance disputes and taking advantage of favorable tax allowances.

However, since this is a complex matter subject to legislative changes, it is advisable to consult an expert in successions and donations, able to analyze each case and recommend the most advantageous tax solution. The experts at agenziadellesuccessioni.it can help you understand how much you will have to pay and how to properly manage the donation deed.