Tax rates in Estonia 2019

We have put together a compact overview of current tax rates in Estonia, which might be helpful for you.  For more detailed information please visit Tax and Customs Board homepage

or contact Leinonen Tax advisors for assistance.

INCOME TAX

Corporate income tax

 

 

 

 

 

 

 

 

Tax rate

N/A

No corporate income tax is paid and undistributed profit is exempt from income tax.

 

 

 

20%, i.e. 20/80 of the net amount

Profit is taxed upon distribution of profit, e.g. when distributing dividends. Additionally, income tax must be charged on fringe benefits, costs of entertaining guests, gifts, donations, expenses not related to enterprise and transfer price.

Additionally, income tax must be charged on reducing a company’s capital, repurchase of shares and payment of liquidation proceeds in the amount that exceeds the monetary and non-monetary payments made to a company’s equity.

14%, i.e. 14/86 of the net amount

Regularly paid dividends are subject to a discount rate of 14/86. Please note: if the payment is made to a private person, income tax of 7% is charged on dividends.

The income tax withheld can be 5% or 0% (depending on the tax agreement) in the case of a non-resident shareholder.

Taxation period

Calendar month. Income tax must be declared and paid by the 10th day of the month following the month on which the payment is made.

Personal income tax

Tax rate

20%

Taxation period

Calendar year. Natural persons must submit their income tax returns by the 31 March of the year following the taxation period.

WAGE TAXES

Income tax

20% income tax withheld by employer

Basic exemption

The annual basic exemption is up to 6,000 euros (500 euros per month). If a person’s annual income is up to 14,400 euros, they can use the exemption in full. If the annual income is between 14,400 to 25,200 euros, the amount of the basic exemption is reduced pursuant to the following formula: 6,000 – 6,000 / 10,800 × (amount of income – 14,400).

Social security contributions

Employer’s obligation to pay on gross wages

Withheld from employee’s wages

33% social tax20% for social security and 13% for health insurance

0.8% unemployment insurance premium

1.6% unemployment insurance premium

2% funded pension contribution (if the person as joined 2nd pillar or the employee is born after 1983 20% for social security and 13% for health insurance kui

VALUE ADDED TAX

Tax rate

20% standard rate

9%

0%

Taxation period

Calendar month. Value added tax returns are submitted by the 20th day of the month following the taxation period.

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