VAT law
VAT rate 20% (KMS § 15(1)).
VAT rate 9% (KMS § 15(2)).
VAT rate 0% (KMS § 15(3) and (4)).
The tax free threshold is EUR 38 (KMS § 5(2)(2)).
The threshold for the obligation to register for VAT is EUR 40 000 (KMS § 19(1)) from the beginning of the calendar year.
Social Tax Act
Social tax rate 33% (SMS § 7(1)) of the taxable amount.
The monthly limit for the payment of social tax is EUR 500 ( § 2(8) of the 2019 State Budget Act).
Minimum employer’s social tax liability €165 (monthly rate x 33%).
The minimum social tax liability for self-employed persons is €495 per quarter(€1980 per year).
Income Tax Act
Income tax rate 20% (TuMS § 4(1)).
The income tax rate on payments made by a legal person (private benefits, gifts, donations, reception expenses, dividends, non-business expenses) is 20/80 (TuMs § 4(11)).
Regular dividends:
the withholding tax rate on dividends and profit distributions regularly paid to resident individuals is 7% (TuMS § 4(4));
the income tax rate on regular dividends and profit distributions paid by legal persons is 14% (14/86) (TuMS § 4(5)).
The income tax rate on advance payments by credit institutions established in Estonia is 14% (TuMS § 4(5)).
The maximum amount of tax-free income deductible from taxable income for the tax period is EUR 6,000 per year, or EUR 500 per month ( Section 23(1) of the Tax Code).
For taxable income for the tax period exceeding 14,400, the formula for tax-free income applies: 6,000 – 6,000 / 10,800 × (amount of income – 14,400) (Tax Code § 23(2)).
The additional tax-free income in the case of child support is EUR 1,848 (EUR 154 per month) for the second and each subsequent child up to the age of 17 (Tax Code §231).
Supplementary tax-free income for spouses EUR 2160 if the spouses’ taxable income does not exceed EUR 50 400 (Tax Code §234).
The non-taxable part of the employer’s lump-sum maternity allowance is EUR 2500 (TuMS § 13(3)(7)).
The tax-free daily allowance for foreign trips is limited to EUR 50 for the first 15 days of the trip, up to a maximum of 15 days per calendar month, and EUR 32 for each subsequent day (TuMS § 13(3)(1)).
There is no tax-free limit for accommodation costs related to missions, both for domestic and international missions (TuMS § 13(3)(1)). Accommodation costs related to missions are considered business expenses regardless of their size and do not give rise to any additional tax liability.
Employer contributions to the employee’s third pension pillar are not subject to income tax. The employer’s income tax-free limit is 15% of the payments made to the employee during the calendar year, but not more than EUR 6,000 per year (TuMS § 13(3)(15)).
Deductions from taxable income are allowed up to a total of EUR 1,200 per taxpayer, but not more than 50% of the taxpayer’s taxable income in Estonia for the same tax period. Mortgage interest may be deducted from income up to a maximum of EUR 300 (TuMS §282).
The taxpayer is also entitled to deduct forest management costs from taxable income in the same or the following three tax periods ( Section 37(8) of the Income Tax Act).
Special tax relief does not include professional training directly related to the employment or service relationship and the duties of a member of the management board of a legal person, the manager of a branch of a foreign company and the managing director of another permanent establishment of a non-resident (TuMS § 48(4)(10)).
The borrowing rate on which the special advantage is based is the last borrowing rate applied by the European Central Bank to its main refinancing operations before 1 January and 1 July of each year, which is published by Eesti Pank (TuMS § 48(4)(6), VÕS § 94(2)).
When a passenger car owned or possessed by an employer is used for work, professional or service purposes or for the employer’s non-business activities, the price of the special allowance is EUR 1.96 per unit of engine power (kW) per month as entered in the registration of the passenger car. In the case of a passenger car more than five years old, the price of the special allowance is EUR 1,47 per unit of engine power (kW) of the passenger car ( Section 48(8) of the Tax Code).
Law on simplified taxation of business income – business account
The corporate income tax rate is 20% if the amount does not exceed EUR 25 000 per year (ELMS § 4 p 1).
The corporate income tax rate is 40% of the amount exceeding EUR 25 000 per year (ELMS § 4 p 2).
Law on group pensions
The gross pension contribution rate is 2% (KoPS § 9).
Employers must check that their employees have joined a funded pension scheme(www.pensionikeskus.ee).
Unemployment contribution regulation
Unemployment insurance contribution rate for the insured 1.6% (Decree No 141 § 2).
Unemployment insurance contribution rate for employers 0.8% (Decree No 141 of the Government of the Republic of Estonia § 3).
Minimum wage regulation
The minimum hourly rate of pay is EUR 3,21 (Decree No 117 of the Government of the Republic of Estonia § 1).
The minimum monthly wage is EUR 540 (Decree No 117 of the Government of the Republic of Estonia § 1).
Commercial Code
Minimum share capital EUR 2500 ( § 136 of the Companies Act).
Minimum share capital EUR 25 000 ( § 222 of the Companies Act).
Law on excise duties on alcohol, tobacco, fuel and electricity
Excise duty on alcohol
Beer EUR 16,92/vol/hl (ATKEAS § 46(1)).
Fermented beverages and wine with an ethanol content of up to 6% EUR 84.41/hl (ATKEAS § 46(2)).
Fermented beverages and wine with an ethanol content of more than 6% EUR 147.82/hl (ATKEAS § 46(3) and (4)).
Intermediate product EUR 289,33/hl (ATKEAS § 46(5)).
Other alcohol EUR 25.08/vol/hl (ATKEAS § 46(6)).
Excise duty on tobacco
The fixed rate for cigarettes is EUR 77.50, but not less than EUR 124.72 per 1,000 cigarettes and the proportional rate is 30% of the maximum retail price of cigarettes (ATKEAS § 56(1) and ( 11)).
The fixed rate for cigars and cigarillos is EUR 151, but not less than EUR 211 per 1,000 cigarettes and the proportional rate is 10% of the maximum retail price of cigarettes (ATKEAS § 56(2)).
The rate of excise duty on smoking tobacco is EUR 82.99 per kilogram (ATKEAS § 56(3)).
The rate of excise duty on tobacco liquid per millilitre of liquid or alternative product is EUR 0.2 per gram of product (ATKEAS § 56(5) and (7)).
The excise duty rate on solid substitutes for tobacco is EUR 82.99 per kilogram or, in the case of alternative tobacco products, EUR 0.2 per gram of product (ATKEAS § 56(6) and (7)).
Fuel excise duty
The excise duty rate for natural gas is EUR 63,31/1000m3 (ATKEAS § 66(10)).
The excise duty rate for unleaded petrol and leaded petrol is EUR 563/1000 l (ATKEAS § 66(1) and (2)).
Excise duty on diesel fuel EUR 493/1000 l (ATKEAS § 66(6)).
The excise duty rate for special diesel fuel is EUR 133/1000 l (ATKEAS § 66(7)).
The excise duty rate for electricity is EUR 4,47 per MWh (ATKEAS § 66(12)).
Environmental Charges Act
The minimum and maximum amounts of the fees for the right to extract mineral resources belonging to the state (KeTS § 9(3)).
Lower and upper limits of the fee for the special water use right (KeTS § 10(4)).
Rates of the fee for the right to commercial fishing for 2018 (KeTS § 11(2)(1), Decree No 97 of the Government of the Republic of Estonia).
Pollutant emission ceilings for discharges of pollutants into ambient air (KeTS § 19).
Pollution charges for discharges of pollutants into water, groundwater and soil (KeTS § 20).
Pollution charges for waste disposal (KeTS § 21).
Family Benefits Act
The parental benefit rate is 500 euros per month ( § 2( 4) of the 2019 State Budget Act).
The maximum amount of parental benefit is EUR 3319.80 per month ( § 38(1) of the Family Allowance Act).
The child benefit for the first and second child in a family is €60. Child benefit for the third and each subsequent child in the family is EUR 100 (PHS § 17(3)).
Childcare allowance for a child up to 3 years of age EUR 38.36 (PHS § 18(1)(1)), EUR 19.18 for each child between 3 and 8 years of age in a family with up to 3 children (PHS § 18(1)(2)), EUR 19.18 for each child between 3 and 8 years of age in a family with more than 3 children (PHS § 18(1)(3)).
Family law
Monthly maintenance for one child of at least EUR 270 per month (PKS § 101(1)).
National Budget Act
The maximum amount of support for starting a business for the unemployed is EUR 4,474 ( § 2(6)(1) of the 2019 State Budget Act).
The daily rate of unemployment allowance is EUR 5.65 ( § 2(6)(4) of the 2019 State Budget Act).
The rate of the travel and accommodation allowance per kilometre provided to an unemployed person or a jobseeker is EUR 0.10, but not more than EUR 26 per day ( § 2(6)(6) of the 2019 State Budget Act).
The subsistence threshold is set at 150 euros per month ( § 2(7)(3) of the 2019 State Budget Act).
The amount of the allowance for a pensioner living alone is 115 euros per year ( § 2(7)(4) of the 2019 State Budget Act).
