Finnish taxes on an inheritance that comes from a foreign country

If you receive a foreign inheritance, you must usually pay Finnish inheritance tax on it. Taxation depends on what countries were the deceased person’s country of residence and your (i.e. the heir’s or beneficiary’s of a will) country of residence at the date of death.

You must pay Finnish inheritance tax in the following circumstances:

When you live in Finland and receive an inheritance from another country, you must pay inheritance tax. The citizenship of the deceased person, and your citizenship as the heir or beneficiary, do not affect the liability to pay inheritance tax.

Example: Agnes, the decedent, was a citizen of Poland and lived in Warsaw before she died. The only heir was her son Pavel, who lives in Finland, but whose citizenship is Polish. The estate that Agnes left behind consisted entirely of real property and personal effects located in Poland.

In these circumstances, Pavel must pay Finnish inheritance tax on all assets he inherited because he was a tax resident of Finland on the date of death.

Although an inheritor living in Finland must usually pay tax on a foreign inheritance, exceptions can be made from this general rule based on a bilateral tax treaty. Such treaties governing inheritance tax are in force with Denmark, Iceland, France, the Netherlands, Switzerland and the United States of America.

How to file the tax return on a foreign inheritance

Read more: how tax treaties affect inheritance taxes (in Finnish and Swedish, link to Finnish)

If the decedent’s tax residence was Finland at the date when he or she passed away, you must pay Finnish inheritance tax on all the inherited assets, even if some of them are located in other countries.  However, in the case of France, the Netherlands and Switzerland, the existing bilateral tax treaties between Finland and those countries provide for exceptions to the above rule.

The valuation of assets and property must always be based on fair market values, i.e. the probable selling prices of the assets and property.

Read more: inheritance tax in Finland

Read more: how tax treaties affect inheritance taxes (in Finnish and Swedish, link to Finnish)

If you inherit immovable property located in Finland, it is invariably subject to Finnish inheritance tax.

“Immovable property” refers to various types of real estate property, including:

  • Land in a zoning area, in lots
  • Leisure property, summer cottages, etc.
  • Farms for agriculture or forestry
  • Other land, including parcels that have not undergone a cadastral process and any buildings, owned by the landowner, located on such land

For purposes of inheritance taxation, “immovable property” additionally includes corporate stock or shares in an entity where property located in Finland makes up more than 50% of corporate assets (such as housing companies and real-estate companies). This category of assets, if inherited, is subject to Finnish inheritance tax as well. However, in the case of France, the Netherlands and Switzerland, the existing bilateral tax treaties between Finland and those countries may contain exceptions.

How to file a tax return on an inheritance.

Read more: how tax treaties affect inheritance taxes (in Finnish and Swedish, link to Finnish) 

No inheritance tax return is necessary if both the decedent (the deceased person from whom you are inheriting) was a permanent resident of a foreign country, and you who are the inheritor are also a permanent resident of a foreign country at the date of the decedent's death, and the assets left behind contain no immovable property as described above.