Tax-free donations in 2025? Here's what you need to know!

In 2025, parents will be allowed to have their child every year until 6,713 euro tax-free donation. This also applies to foster and stepchildren.

You can give other people, such as grandparents, brothers, sisters, uncles, aunts or friends, up to 2,690 euro tax-free donation. It doesn't matter what your relationship with the recipient is. As long as the amount remains within this exemption, the recipient does not have to pay tax or file a return.

How much can I donate tax-free in 2025?

The low-hanging fruit: a tax-free donation can be made to someone else every year. The amount of the annual exemption depends on the relationship between the donor and recipient and the purpose of the money. In particular, donations from parents to (foster) children enjoy a higher exemption than donations to third parties.

A brief overview of the gift exemption is included below.

What is a donation?

To start with the basics: a donation is a transfer of assets out of generosity. It is important here that the donor impoverishes and enriches the recipient. In a recent position, the tax authorities also confirmed that no donation can exist without impoverishing the donor.

Anyone can imagine a donation: someone gives money to someone else to please or help them. However, there are also some less clear forms of a donation. For example, “sales below value”. For example, if you sell a car with a daily value of €50,000 to your cousin for €10,000, the 'gap' of €40,000 is a taxed donation.

The same is possible with loans within the family on unbusiness terms. For this, see the product on our site.

If a donation is found, the next question is whether it is taxed in the Netherlands. Broadly speaking, there are two categories of untaxed donations:

1. Donations that do not fall under the Dutch gift tax at all

A donation is only taxed if it is made by someone who lives in the Netherlands at the time of the donation. So when a Dutch tax resident receives a donation from someone who lives in Belgium, they do not owe gift tax in the Netherlands.

Are you now “neighborhood free” before gift tax when you move from the Netherlands?

Not quite. Indeed, the Netherlands has the “citizenship fiction”. Residents of the Netherlands (without Dutch nationality) who move abroad remain expected to live in the Netherlands for up to 1 year after emigrating and still pay gift tax if they donate money. For former residents of the Netherlands who have Dutch nationality at the same time, this period is even 10 years!

2. Donations are subject to gift tax but are explicitly exempt

The tax law includes various gift tax exemptions. This simply means that the donation would be taxed, but that the legislator chooses not to tax. We have included a detailed explanation under point 4.

Gift tax rates 2025

In the event that a donation is taxed in the Netherlands and cannot be exempt, the last question that needs to be answered is: how high is the tax that must be paid?

You only pay gift tax on the part of the donation that exceeds your exemption. So first deduct the exemption from the amount and only then calculate how much tax you have to pay on the remainder.

Example calculation

Parents will donate €50,000 to their child in 2025. The exemption for a donation from parents to a child is €6,713. This means that you only pay tax on the amount above this exemption.

1. Donation amount: €50,000
2. Exemption: €6,713
3. Taxable amount: €50,000 - €6,713 = €43,287

According to the 2025 gift tax rates, a donation from a parent to a child applies:

• 10% tax on the first €154,197
• 20% tax on the amount above €154,197 (but that does not apply here)

Because the taxable amount is €43,287, everything falls within the 10% bracket. Gift tax payable:

• 10% of €43,287 = €4,328.70
  

Do you need help calculating the gift/inheritance tax? Then take a look at our site to see how we can support you in the field of Estate Planning!

Gift tax exemptions 2025

As mentioned, an exemption can ensure that donations that would otherwise be taxed in the Netherlands can still be enjoyed tax-free. To give you an idea of the options for giving tax-free, we have further explained the most important gift tax exemptions below.

The one-off increased exemption for children

In 2025, as a parent, you can make use of the one-off increased exemption, which allows you to donate a significantly higher amount tax-free than the standard exemption once.

In addition to the regular (mentioned above) exemption of €6,713, parents can donate once more if their child is between 18 and 40 years old:

• Freely disposable: €32.195
• For an expensive study: €67,064

However, there are a number of conditions for the increased exemption:

• The child (or their partner) must be between 18 and 40 years of age at the time of donation.
• The exemption may only be used once.
• The study must cost at least €20,000 per year, excluding living costs.
• The child must be able to demonstrate that the amount is actually used for the study, for example with invoices or an explanation from the educational institution.
• To make use of the one-off increased exemption, the child must file a gift tax return and indicate that he or she is invoking the increased exemption.
• The increased exemption for expensive studies and the freely disposable increased exemption should not be combined. So you have to choose which one to use beforehand.

Do you want to make the most of the increased exemption? Make sure you plan and document the donation properly so you don't run into unexpected tax surprises!

Business Succession Scheme (BOR)

In 2025, the business succession scheme (BOR) offers tax benefits when donating a company. This option was introduced to ensure the continuity of family businesses. After all, if gift tax has to be paid on the entire value of the company, the company will often have to be (partly) sold.

When donating from a company, an amount of up to €1,500,000 is exempt from gift tax. The excess is subject to a conditional exemption of 83%.

The terms and conditions of the BOR include:

• Active company: The scheme applies to active companies; investment activities are excluded.
• Property term: The donor must have owned the company for at least 5 years prior to the donation.
• Recipient age: The recipient must be at least 21 years old when donating. This is a new requirement; previously, the recipient had to be employed by the company for a certain period of time.
• Continuation requirement: The recipient is required to continue the business for at least 3 years.
• Declaration and request: To make use of the BOR, the gift tax return must explicitly request the application of the scheme.

Formal aspects of tax-free donation

Did you receive a donation that exceeds the exemption limit in 2025? Then you must file a gift tax return. The obligation to do so lies with the recipient of the donation. This can easily be done via the online declaration form of the tax authorities. In addition, you can tax advisor also declare the donation.

The deadline for filing the return is March 1 of the year after the donation. So if you receive a donation in 2025 that requires you to pay tax, the return must be received before March 1, 2026.

After filing, a preliminary assessment usually follows, which must be paid within six weeks. The final assessment is usually imposed within three years.

Are you late with the declaration? Then the tax authorities can impose a fine. It is therefore wise to arrange this in time to avoid surprises.

Do you need help planning a donation or filing the gift tax return? Please contact the tax specialists by Port Sight Tax

Documentation used

1. Article 33, Succession Act 1956
2. KG: 063:2023:7 Concept of gift, enrichment without impoverishment
3. Article 3 (1) Succession Act 1956
4. Article 6 (2) Implementing Regulations for the Succession Act 1956