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) ( Section 23(2) of the Income Tax Act).
The additional tax-free income in the case of child support is EUR 1,848 (EUR 154 per month) for the second child up to the age of 17 and EUR 3,048 (EUR 254 per month) for the third child (Tax Code §231 (1)).
Supplementary tax-free income for the spouse EUR 2 160 if the spouses’ taxable income does not exceed EUR 50 400 (TuMS §234 (1)).
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 (1)).
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).
A self-employed person pays advance payments on business income in equal amounts by 15 September and 15 December, subject to a threshold of EUR 300 (TuMS § 47(2)).
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).
Entrepreneurship 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 107 § 2).
Unemployment insurance contribution rate for the employer 0.8% (Decree No 107 § 3).
Minimum wage regulation
The minimum hourly rate of pay is EUR 3,48 (Decree No 115 of the Government of the Republic of Estonia § 1).
The minimum monthly wage is EUR 584 (Decree No 115 of the Government of the Republic of Estonia § 1).
Employment Contracts Act
The pay for one day of parental leave is EUR 27.70 ( § 63(1) TLS).
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
The fixed rate for cigarettes is EUR 81.95, but not less than EUR 138.65 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 89,63 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 for solid substitutes for tobacco is EUR 89.63 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 79,14/1000m3 (ATKEAS § 66(10)).
Excise duty on motor gas EUR 47,32 per 1000m3 (ATKEAS § 66(101))
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)).
The minimum and maximum amounts of the special water use right fee in euros per 1000m3 (KeTS § 10(4)).
Rates of the fee for the right to commercial fishing for 2020 (KeTS § 11(2)(1), Decree No 85).
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 per tonne of waste disposed of (KeTS § 21).
Family Benefits Act
The parental benefit rate is 540 euros per month ( § 2(3) of the 2020 State Budget Act).
The maximum amount of parental benefit is EUR 3548.10 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 €38.36 for a child up to 3 years old, €19.18 for each child aged 3-8 in a family with up to 3 children, €19.18 for each child aged 3-8 in a family with more than 3 children. The childcare allowance is a type of benefit that is being phased out. For children born from 1 September 2019, the childcare allowance will no longer be granted.
Family law
Monthly maintenance for one child of at least €292 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(5)(1) of the 2020 State Budget Act).
The daily rate of unemployment allowance is EUR 6.10 ( § 2(5)(4) of the 2020 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(5)(6) of the 2020 State Budget Act).
The subsistence threshold is set at EUR 150 per month ( § 2(6)(3) of the 2020 State Budget Act).
The amount of the allowance for a pensioner living alone is 115 euros per year ( § 2(6)(4) of the 2020 State Budget Act).
