Study on inheritance taxation in the EU

Study on inheritance taxation in the EU

April 13, 2015

The European Commission Directorate-General for Taxation and Customs Union commissioned Copenhagen Economics to conduct a study on inheritance taxes in EU Member States and possible mechanisms to resolve problems of double inheritance taxation in the EU. The domestic rules on inheritance taxes vary substantially among the 27 Member States of the EU. A majority of the 27 Member States (18) have an inheritance or an estate tax, which is respectively levied on the heirs or the estate of a deceased person.


The domestic rules on inheritance taxes in the European Union give rise to two potential cross-border problems, namely discrimination and double taxation. Rules are discriminatory when they contain provisions that conflict with the non-discrimination principle, e.g. when they provide different and less favourable methods for the valuation of assets forming part of an inheritance if those assets are located in another Member State. Double taxation arises when the same inheritance or estate is taxed in more than one Member State. This is typically caused by a conflict between the so-called connecting factors, rules that determine if a particular inheritance or estate is connected to the tax jurisdiction of a given Member State, of the tax rules of two or more Member States.


From a macro perspective, the study concludes that the scale of the double taxation problem in the field of inheritance is relatively small. Despite the problem’s limited national magnitude, double taxation can however pose a significant problem for the individuals concerned. The flows between the ‘old’ EU-15 Member States, and especially the large migrant streams from UK to Spain and Germany to Spain, appear particularly exposed to double taxation as these Member States typically have relatively high effective inheritance tax rates. Overall, the study estimates the annual number of cross-border inheritance cases in the EU to be in the range 290,000-370,000.


The study can be found on the website of the European Commission here

An annex to the study on country-specific inheritance tax rules in each of the 27 EU Member States can be found here For further information contact managing economist Helge Sigurd Næss-Schmidt