Finland's Inheritance Tax Debate Takes
a Turn: Government Confirms No Abolition Finland's perintövero (English: inheritance tax) debate took a turn on 17 March 2026, when the Finnish government confirmed that the perintövero would not be abolished. The announcement came after Ilta-Sanomat published an analysis on 16 March examining how abolishing the perintövero would affect inheritances of different sizes. The government's position rules out one of Europe's last potential inheritance tax reforms, which elsewhere have led to significant migration flows. Finland's perintövero system is progressive: close relatives pay 7 to 19 percent of the inherited amount, while more distant relatives pay 19 to 33 percent. The system has been the subject of political debate, particularly in entrepreneurial circles, where generational transfers of business ownership can create significant tax liabilities. The government's announcement means these rates will remain in force for at least the current parliamentary term.
What
the Government Said About Abolishing the Perintövero The government told Iltalehti on 17 March 2026 that the perintövero would not be abolished "at this time." The phrase "at this time" leaves room in theory for future changes, but in practice it means the current government has no intention of reforming the perintövero system. The government's position is a clear response to economically liberal circles that have called for abolition of the perintövero in the name of competitiveness. The analysis published by Ilta-Sanomat on 16 March examined the effects of abolishing the perintövero on inheritances of different sizes. While precise calculations are not publicly available, the analysis showed that abolition would benefit the largest inheritances most. The government's decision to maintain the current system means the progressive structure remains in place. Finland's perintövero is at a mid-range level in the European context. The 7 to 19 percent bracket for close relatives is more moderate than in France or Germany, for example, but higher than in countries that have abolished inheritance tax entirely or reduced it to a minimum.
Inheritance Tax in Europe: Who Abolished It and Who Did Not In recent decades, several European countries have abolished inheritance tax or significantly curtailed it. Sweden abolished its perintövero equivalent in 2004, Norway in 2014, and Austria in 2008. These decisions were often made in the name of competitiveness and preventing capital flight. Finland has not followed this path, and the government's announcement confirms that this position will hold. In Italy, the inheritance tax for close relatives is 4 percent, but only on inheritances exceeding one million euros. Cyprus has no inheritance tax at all. These systems are particularly attractive to wealthy families planning generational transfers of assets. Finland's 7 to 19 percent bracket for close relatives means that an inheritance of, for example, 500,000 euros can result in a tax bill of tens of thousands of euros. The government's decision to maintain the perintövero means Finland remains among those European countries that tax inheritances progressively. This may particularly influence the decisions of entrepreneurs and wealthy families regarding which country they reside in and where their assets are registered.
Finland Compared to Zero-Tax Countries: What the Data Shows Finland's perintövero system differs significantly from countries that do not tax inheritances at all. In Cyprus, Italy (for inheritances below one million euros between close relatives), and Malta, inheritance tax is either zero or minimal. These countries have attracted particularly wealthy families seeking to avoid inheritance taxes in generational transfers. In Finland's system, the perintövero for close relatives starts at 7 percent and rises to 19 percent. For more distant relatives, the bracket is 19 to 33 percent. This means that an inheritance of, for example, 1,000,000 euros to a close relative can result in a tax bill of approximately 100,000 to 150,000 euros, whereas in Cyprus or Italy (for a close relative) the same inheritance would be tax-free. The government's announcement means these differences will persist. Finnish families planning large generational transfers will still need to assess whether avoiding the perintövero is sufficient reason to consider relocating or re-registering assets. According to the Libaros calculator, a Finnish person who moves to Cyprus, for example, can save approximately 14,336 euros per year in income tax (compared to Finland's effective income tax rate of 30 percent), but the saving on perintövero depends entirely on the size of the inheritance and its timing.
Finland
as a Relocation Destination: What the Perintövero Means Finland ranks at a mid-range level in the Libaros Freedom Score index: low corruption, a strong legal system, but a high overall tax burden. The perintövero is one of the factors that particularly influences the decisions of wealthy families and entrepreneurs regarding which country they reside in and where their assets are registered. The government's announcement means Finland remains among the countries that tax inheritances progressively. This may particularly affect those Finns who are considering a move to countries where inheritance tax does not exist or is minimal. Cyprus, Italy, and Malta are examples of countries that offer a zero or near-zero inheritance tax system for close relatives. Finland's perintövero system is not the strictest in Europe, but it is not the most competitive either. The government's decision to maintain the current system means that those Finns for whom the perintövero is a significant factor will still need to evaluate their options. The Libaros calculator shows that on income tax alone, a move to Cyprus or Dubai can produce an annual saving of approximately 14,000 euros, but the saving on perintövero can be several times greater if the inheritance amount is large.