Gift taxes in international situations
If one donor gives you gifts in the course of 3 years for a total value of at least €5,000 and any of the following applies, you must pay gift tax:
- The donor or you, the recipient, live in Finland on the date when the gift is given.
- The gift consists of a house, an apartment, or a summer cottage.
- The gift consists of other immovable property located in Finland, or if corporate stock or shares are given of a company in which more than 50% of corporate assets consist of Finnish-located immovable property.
The following are examples of circumstances where recipients must pay gift tax to Finland:
- A gift of a house or apartment not located in Finland is made to you. You live in a foreign country but the donor lives in Finland at the date when you get the gift.
- You receive a sum of money from a person living in a foreign country. You live in Finland at the date when you get the gift.
- You receive a summer cottage located in Finland as a gift. Both you and the donor live in a foreign country.
If you buy property under a condition that you only have to pay 75% of its fair market value, it is considered a gift-like sale. The amount subject to gift tax is the difference between what you paid and the fair market value.
Subject to certain restrictions, if you have paid gift tax to a foreign country, you can receive credit for it when your Finnish gift tax is assessed. This requires that you live in Finland. Give the necessary details when you submit your gift tax return.
Instructions for gift tax filing and paying
Find out the gift's taxable value
After you have received a gift, you must valuate it in order to complete the gift tax return form. Use the fair market value, i.e. the probable selling price. This means the amount the seller would have received for it on the date when the gift was given to you. This value is the base for the gift tax assessment to be carried out by the Finnish Tax Administration.
Submit the gift tax return
Gift recipients must submit a return within 3 months from the date of gift.
You need the following information for completing the return form:
- gift value
- gift date
- family relationship between donor and recipient
The above information also has an impact on how much gift tax you must pay.
To submit the return you have the following options:
- File a paper form.
- File the return electronically in MyTax where you can log in securely to handle your tax affairs.
If you cannot log in to MyTax, complete your gift tax return on paper.
Pay the gift tax
After you submit the return, you receive the Tax Administration’s decision on your gift tax in approximately 6 months. Instructions for payment are enclosed.
The first due date is some 3 months after the date when you receive the decision. If your gift tax is less than €500, you must pay it on one single due date. Amounts above €500 are divided in 2 separate instalments. In this case, the second due date is 2 months later than the first due date.
Other taxes relating to property and assets
Please note that if you receive immovable property in Finland – a summer cottage, etc. – you become liable for other taxes that are related to your ownership of the property. For example, owners of real estate must pay real estate tax every year.