A death estate as an agricultural, forestry or business operator
If the deceased person was an agricultural, forestry or business operator during their lifetime, the operations are transferred to their death estate. The parties to the estate have joint liability for the estate’s taxes until the estate is distributed.
This means that they must file the same tax returns for the agricultural, forestry or business operations as the deceased person used to do. They must do this on their own initiative, and the returns must be filed by their due dates.
However, the estate does not need to file a tax return for forestry operations or a VAT return for forestry if there is nothing to report for the previous year.
A tax return for agricultural operations and a business tax return must always be filed, even in the case of no activities. As for VAT returns, the filing and payment dates depend on the company’s tax period, which is either a month, a quarter or a year.
Even if there are multiple parties to the estate, a single tax return is filed in the name of the estate.
Managing the estate’s taxes in MyTax
The deceased person’s tax information cannot be accessed through MyTax. However, the tax matters of the agricultural, forestry or business operations that have been transferred to the estate can be managed in MyTax if the estate already has a Business ID. The death estate will have the same Business ID as the deceased person had.
- In order that the estate’s taxes could be managed electronically, the parties to the estate must grant someone a Suomi.fi authorisation for tax matters. The authorised person can be one of the parties to the estate. How to grant a Suomi.fi authorisation for tax matters
- In addition to the Suomi.fi authorisation, the authorised person must have personal online banking codes or a mobile certificate to log in to MyTax. After logging in, they must select “Act on behalf of a company” to see the estate’s information.
Filing a tax return – when operations continue unchanged
Taxes for the year of death are assessed in the same way as if the deceased person were alive. The estate files the tax returns in the spring following the year of death.
Agriculture: If spouses have operated a business together and one of them dies, the rules applicable to the two of them will be applied up until the end of the year of death.
Business operations: If spouses have operated a business together and one of them dies, the rules applicable to the two of them will be applied up until the end of the year of death.
See the instructions:
Forestry: The estate pays tax on income from the deceased person’s forests, and the surviving spouse pays tax on income from their own forests. Because of this, the estate and the surviving spouse must each file VAT returns and tax returns for forestry.
If the estate and the surviving spouse own forests together, they form partnerships. The shares of ownership must be the same for all forests included in a partnership. Another situation where a forestry partnership is formed is when a forest estate is divided between several inheritors in estate distribution, and each inheritor is assigned a designated share. In the above circumstances, the tax return and VAT returns for forestry are filed by the partnership.
See the instructions:
Forestry partnerships (available in Finnish and Swedish)
Agriculture: If the deceased person owned a farm, either alone or together with their spouse, the death estate is liable for the taxes on the agricultural operations. The estate is responsible for filing the tax return for agricultural operations up until the division of assets and distribution of the estate. In other words, no agricultural partnership is formed in this case.
However, an agricultural partnership is formed if the agricultural operations that the deceased person conducted together with their spouse include assets, such as fields, that the surviving spouse owns alone. In this case, the surviving spouse and the death estate form an agricultural partnership. The partnership files a single income tax return for agriculture.
An agricultural or forestry partnership is also formed if a farm is divided between several inheritors in estate distribution, and each inheritor is assigned a designated share.
See the instructions:
Agricultural partnerships (available in Finnish and Swedish)
Estate conducting business operations: An estate conducting business operations is independently liable for paying taxes for 3 years after the deceased person’s year of death. Every year, the estate files, in its own name,
- a business tax return (Form 5)
- VAT returns according to its tax period.
If the estate also has activities other than business operations, also read the instructions on how estates file tax returns on rental income, for example, and on agricultural and forestry income.
See the instructions:
Taxation of self-employed individuals
Estate’s rental income and taxes
Unregistered partnership conducting business operations: If the deceased person conducted business operations together with their spouse, the estate and the surviving spouse can continue the operations as an unregistered business partnership. The partnership is affected by the ownership of business assets and other circumstances. However, the rules on spouses operating a business together will not be applied.
Unregistered business partnerships file a tax return on their business operations.
- Based on the tax return, the result of the business operations is divided into income shares between the partners, i.e. the surviving spouse and the estate.
- The surviving spouse and the estate pay tax on the income in proportion to their income shares.
- The unregistered business partnership also files VAT returns according to its tax period.
When an inheritor or the surviving spouse continues the business operations, it is often more practical to distribute the estate or change the business form than to act as an unregistered business partnership. This helps to avoid confusion regarding the actual owner of the assets and the allocation of income.
See the instructions:
Taxation of general and limited partnerships
Generational transfer in inheritance situations (available in Finnish and Swedish, link to Finnish)
If the deceased person’s tax return has not been filed on time because of the person’s death, the inheritors must see that the return is filed.
A tax return can be filed even if the filing deadline has passed. If you cannot use MyTax to file the return because you do not have a Suomi.fi authorisation yet, you can file the tax return on paper.
See the instructions:
When agricultural, forestry or business operations are terminated
The estate usually terminates the business operations if there is no successor willing to continue the business.
When the estate terminates its business or agricultural operations or activities subject to VAT,
- file a notification of termination
- remove the estate from the Tax Administration’s registers
- file all the required tax returns.
If only the activities subject to VAT are terminated, remove the estate from the VAT register.
If the estate is not distributed, it will continue to receive a pre-completed tax return every year.
Termination of business – businesses and organisations
How to unregister from the Finnish Tax Administration's register in MyTax
The estate usually terminates the business operations if there is no successor willing to continue the business. The business operations conducted by the estate may also end when the estate is distributed or when the assets of the estate are transferred to a sole inheritor without estate distribution.
Follow the instructions below in the following situations:
- The estate terminates its business operations or activities subject to VAT, or the estate is distributed.
- The estate terminates its agricultural or forestry operations or activities subject to VAT.
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- File a notification of termination.
- Remove the estate from the Tax Administration’s registers.
- Submit the deed of estate distribution to the Tax Administration.
- File all the required tax returns.
Termination of business – businesses and organisations
How to unregister from the Finnish Tax Administration's register in MyTax
Frequently asked questions
Tax return for agricultural operations
Use this tax return to file:
- agricultural income, such as income from sales of farmed crops
- agricultural costs, such as purchases of fertilizers and seeds
- agricultural assets and liabilities
- income from the rental of farm property, such as a field or land for a wind farm.
Note: The estate has an obligation to keep records of the income and costs of its agricultural operations.
Tax return for forestry
Use this tax return to file:
- forestry income, such as income from timber sales
- forestry costs, such as travel expenses related to forestry operations
- records related to the forestry deduction and reserves.
Note:
- The estate has an obligation to keep records of the income and costs of its forestry operations.
- If the estate is liable to pay VAT, the Business ID of the estate is used in documents related to timber sales.
Business tax return
Use this tax return to file:
- business income, such as income from product sales
- business expenses, such as goods and services purchased for the business operations
- business assets and liabilities.
Note: A business tax return must always be filed – even when the estate has not had any activities.
VAT return
Use this tax return to file:
- VAT on timber sales and on other sales revenue
- deductible VAT, i.e. VAT included in the prices of goods and services bought for the forestry or business operations.
Do not use the estate’s business tax return or tax return for agricultural operations or forestry to file the deceased person’s, surviving spouse’s or inheritors’ personal tax information.
When the estate has been divided, i.e. the surviving spouse’s portion of the farm or forest has been separated from the portion of the estate, the surviving spouse and the estate form a tax partnership (agricultural partnership or forestry partnership).
The partnership is liable for the agricultural and forestry income and the related tax returns. If, after the division, the surviving spouse declares that they will retain the right of possession to all the assets of the agricultural and forestry operations, then tax on the agricultural or forestry income will be imposed on the surviving spouse.
Note: When the estate’s assets have been divided, remember to send a photocopy of the deed of division and deed of estate distribution to the Tax Administration. See the instructions: Distribution of estate – send a photocopy of the deed of distribution to the Tax Administration
The estate’s liability to pay tax on business income ends when the estate is distributed.
- The estate pays tax on the income that has accrued by the date of estate distribution.
- After the estate distribution, those who inherited the business operations are liable for the taxes.
When the assets are divided, a similar procedure is followed:
- The donor pays tax on the income accrued for the private undertaking or part of the undertaking by the date of division.
- After the date of division, the recipient is liable for the taxes.
If assets of the private undertaking are transferred from the business in connection with estate distribution, they may be regarded as withdrawals. Read more about the definition and the tax consequences in the Tax Administration’s detailed guidance on the withdrawal of assets for personal use.
Parties to the death estate must see that both the deceased person’s and the estate’s taxes are paid. It should be noted that the distribution of an estate does not have retroactive effects on taxes that have been or will be imposed on business operations. The parties to the estate carry joint liability for the taxes imposed on business operations conducted by the estate.
See the instructions:
- Paying the estate’s taxes
- Distribution of inheritance and ceased estate
- Withdrawing assets for personal use or transferring assets to another source of income (in Finnish and Swedish)
Note: When the estate’s assets have been divided or the estate has been distributed, remember to send a photocopy of the deed of division and deed of estate distribution to the Tax Administration. Read more: Distribution of the estate – send a photocopy of the deed to the Tax Administration