Finnish government is going to propose some major changes in the Finnish stamp duty regime effective 1.1.1997. These proposals are based on a working group study released in May 1996. Stamp duty related to transfer of real estate is expected to decrease from 6 % to 4 % from the purchase price. Government has decided that the new lower tax rate applies already to transfers made after 1.7.1996.

When the general tax rate will decrease the tax base is going to be expanded so that stamp duty applies also to transfers of buildings with rental agreement to the land-base. Government is also going to propose that stamp duty should be levied on transfers of buildings. These proposals will affect negatively to reorganisations of group of companies because stamp duty will apply more extensively to reorganisations when buildings are involved.

The general tax rate of transfer of shares will remain at 1,6 %. If the shares are transferred in the stock exchange no stamp duty will apply. Exchange of shares has been treated in Finland as a single purchase and the stamp duty has levied on the value of the more valuable exchanged share. The government proposes a change in to this principle such that in an exchange of shares there will be two transactions subject to stamp duty Equity increases in cash will remain free of stamp duty.

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