{"id":6437,"date":"2016-11-08T00:00:00","date_gmt":"2016-11-08T00:00:00","guid":{"rendered":"https:\/\/new.leinonen.eu\/est\/important-tax-amendments-that-have-entered-and-will-enter-into-force-in-2016\/"},"modified":"2016-11-08T00:00:00","modified_gmt":"2016-11-08T00:00:00","slug":"important-tax-amendments-that-have-entered-and-will-enter-into-force-in-2016","status":"publish","type":"post","link":"https:\/\/leinonen.eu\/est\/news\/important-tax-amendments-that-have-entered-and-will-enter-into-force-in-2016\/","title":{"rendered":"Important\ntax amendments that have entered and will enter into force in 2016"},"content":{"rendered":"<div>\n<p><b>INCOME TAX<\/b><\/p>\n<p><b>Maximum daily allowance increased<\/b><\/p>\n<ul>\n<li>The tax exempt limit  of daily allowances during assignments abroad is 50 euros for the  first 15 days of an assignment abroad.<\/li>\n<li>At most for 15 days  per calendar month. It is still 32 euros for each following day.<\/li>\n<li>Until now, any money  paid over the maximum was taxed as a fringe benefit, but from 2016  onwards it is regarded as salary.<\/li>\n<\/ul>\n<p> <\/p>\n<p><b>Income from rent defined in the Income Tax Act<\/b><\/p>\n<ul>\n<li>The Income Tax Act  defines income from rent as rent, consideration for constitution of  right of superficies and tolerating a real encumbrance, and other  consideration received for tolerating a restriction on the use of an  object arising from law or transaction.<\/li>\n<li>Income from rent  does not include:<\/li>\n<li>bearing accessory  expenses for the purposes of \u00a7 292 of the Law of Obligations Act  and duties for the purposes of \u00a7 293 on behalf of the recipient of  income from rent or compensating the recipient of income from rent  for bearing them;<\/li>\n<li>Pursuant to clause  19 (3) 15) of the Income Tax Act, payment made for tolerating  utility networks and utility works to the extent of the land tax  paid on the land related to the obligation to tolerate.<\/li>\n<\/ul>\n<p> <\/p>\n<p><b>Income tax incentive related to natural person\u2019s apartment rent<\/b><\/p>\n<ul>\n<li>For the purposes of  the Law of Obligations Act, 20% is deducted in the tax return from  the rent received on the basis of a residential lease contract to  cover the expenses related to rental.<\/li>\n<li>The deduction  applies to resident <b>natural persons,<\/b> non-residents and  contractual investment funds.<\/li>\n<li>This deduction is  not applied to sole proprietors.<\/li>\n<li>This deduction  applies to all taxable persons irrespective of the amount of  expenses incurred and the existence of documentary evidence.<\/li>\n<li>The amount of  deduction is not limited.<\/li>\n<li>In the case of  income from rent, income tax is still withheld from payouts, which  means that deduction is not considered during the withdrawal stage,  but only upon the submission of a natural person\u2019s tax return.<\/li>\n<\/ul>\n<p> <\/p>\n<p><b>Tax exempt income<\/b><\/p>\n<ul>\n<li>2016 2040 per year 170 per month<\/li>\n<li>2017 2160 per year 180 per month<\/li>\n<li>2018 2280 per year 190 per month<\/li>\n<li>2019 2460 per year 215 per month<\/li>\n<\/ul>\n<p>      <\/p>\n<p><b>Additional tax exempt income of pensions increased<\/b><\/p>\n<ul>\n<li>2700 per year (up to 225 euros per  month)<\/li>\n<li>(a pension of 395 euros is exempt  from tax)<\/li>\n<\/ul>\n<p> <\/p>\n<p><b>Training expenses<\/b><\/p>\n<ul>\n<li>The income tax  incentive on expenses related to <b>hobby training <\/b>for adults  was abolished with an amendment.<\/li>\n<li>The right to deduct  expenses related to formal education and the hobby education of  persons up to 18 years of age remained unchanged.<\/li>\n<li>The expenses for the  student&#8217;s participation in in-service training are considered  training expenses if the person conducting the training holds an  activity licence for conducting the in-service training or they have  submitted a notice of economic activities therefor.<\/li>\n<\/ul>\n<p> <\/p>\n<p>The expenses paid for obtaining a driving licence for driving motor vehicles of:<\/p>\n<ul>\n<li>category AM;<\/li>\n<li>category A, sub-category A1 or A2;<\/li>\n<li>category B, sub-category B1;<\/li>\n<\/ul>\n<p>are no longer considered training expenses.<\/p>\n<p>If teaching a person to drive is necessary for work or enterprise-related purposes, the expenses paid by an employer for the relevant training of their employees or paid by a sole proprietor to train themselves are still subject to tax exemption. <\/p>\n<p><b>Limit of gifts and donations<\/b><\/p>\n<ul>\n<li>A limit (5% of  income earned in the taxation period) was applied to <u>natural  persons<\/u> until now, but it will be abolished from 1 January 2016.<\/li>\n<li>As a result of the  amendment, gifts and donations became equal to training expenses and  housing loan interest from the viewpoint of deductions, to which  only the general limits (50% of taxable income, but not more than  1200 euros) are applied.<\/li>\n<\/ul>\n<p> <\/p>\n<p><b>Restriction on total amount of deductions from income<\/b><\/p>\n<ul>\n<li>The total amount of  the restriction on deduction of housing loan interest, training  expenses, charitable gifts and donations from income was 1920 euros,  but it was reduced to <b>1200 <\/b>euros with the amendment.<\/li>\n<li>The amendment will  apply to housing loan interest paid from 2016 onwards and other  deductible expenses.<\/li>\n<\/ul>\n<p> <\/p>\n<p><b>VALUE ADDED TAX<\/b><\/p>\n<p><b>Amendments enforced on 1 May 2016<\/b><\/p>\n<p>The list of persons to whom goods or services can be sold at 0% tax, i.e. with a VAT exemption certificate, was extended.<\/p>\n<ul>\n<li>\n<p>Sale to the armed forces of NATO  member states and the civilian staff accompanying them when such  forces are taking part in the common defence effort in Estonia.<\/p>\n<\/li>\n<\/ul>\n<ul>\n<li>\n<p>Sale of goods or provision of  services to the headquarters of an international organisation  situation in <b>another Member State<\/b> or to an international  military headquarters.<\/p>\n<\/li>\n<\/ul>\n<p><b>Amendments enforced on 1 May 2016<\/b><\/p>\n<ul>\n<li>\n<p>Sale of goods or  services to an international military headquarters situated in  Estonia, provided that the relevant incentive is stipulated in an  international agreement ratified by the Riigikogu.<\/p>\n<\/li>\n<\/ul>\n<ul>\n<li>\n<p>Goods and services  can be sold to an EU institution located in Estonia when the total  cost of the goods or service without VAT is at least <b>53 euros<\/b>  according to the invoice. This amount can also be smaller in the  case of fuel, utility expenses and communication services.<\/p>\n<\/li>\n<\/ul>\n<p>When goods are sold or a service is provided at 0% VAT to an EU institution, NATO armed forces or an international military headquarters located in <b>Estonia,<\/b> then the certificate is approved by the Ministry of Foreign Affairs or the Ministry of Defence. <\/p>\n<p><b>Approval of tax-free certificate<\/b><\/p>\n<ul>\n<li>\n<p>The goods exported  in the case of tax-free sales to natural persons can be inspected  and the tax-free certificate can be approved by the <b>customs <\/b>or  the <b>Police and Border Guard Board.<\/b><\/p>\n<\/li>\n<\/ul>\n<p><b>Long-term cross-border services<\/b><\/p>\n<ul>\n<li>\n<p>In the case of  long-term (over a year) cross-border services when the recipient  must be subjected to reverse taxation, the turnover is deemed to  have occurred on 31 December <b>every year <\/b>(including the first  year of service provision).<\/p>\n<\/li>\n<\/ul>\n<p><b>Reverse taxation of import<\/b><\/p>\n<ul>\n<li>The terms and  conditions of using the special arrangements must be complied with  within 12 months <b>before the notification of commencement of the  use of special arrangements.<\/b> <\/li>\n<li>The tax authority  checks the compliance with the terms and conditions within 30 days  of receipt of the notification and informs the taxable person  whether or not they comply with the terms and conditions.<\/li>\n<li>If non-compliance  with the terms and conditions within the last 12 months is  identified during a monthly inspection, the <b>right to use special  arrangements can be suspended until the end of the next month.<\/b> <\/li>\n<li>During tax  proceedings, the <b>right to use special arrangements can be  suspended until the completion of the tax proceedings.<\/b> <\/li>\n<li>The right to use  special arrangements can be annulled on the basis of a written  notification of the taxable person or by deleting them from the  register of VAT payers.<\/li>\n<li>The tax authority  can annul the right to use special arrangements <b>with a notice of  assessment or if the right use them has been suspended for six  consecutive months.<\/b> <\/li>\n<\/ul>\n<p> <\/p>\n<p><b>The limit of accommodation services increases<\/b><\/p>\n<ul>\n<li>\n<p>The VAT rate on accommodation  services and accommodation services with breakfast will increase  from 9% to 14% <b>from 2017 onwards.<\/b><\/p>\n<\/li>\n<\/ul>\n<p><b>SOCIAL TAX<\/b><\/p>\n<ul>\n<li>\n<p>The tax rate will be 32.5% (12.5%)  from 1 January 2017.<\/p>\n<\/li>\n<\/ul>\n<p> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>INCOME TAX Maximum daily allowance increased The tax exempt limit of daily allowances during assignments abroad is 50 euros for the first 15 days of an assignment abroad. At most for 15 days per calendar month. It is still 32 euros for each following day. Until now, any money paid over the maximum was taxed [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[114],"class_list":["post-6437","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Important tax amendments that have entered and will enter into force in 2016 &#8211; Leinonen Estonia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/leinonen.eu\/est\/news\/important-tax-amendments-that-have-entered-and-will-enter-into-force-in-2016\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Important tax amendments that have entered and will enter into force in 2016 &#8211; Leinonen Estonia\" \/>\n<meta property=\"og:description\" content=\"INCOME TAX Maximum daily allowance increased The tax exempt limit of daily allowances during assignments abroad is 50 euros for the first 15 days of an assignment abroad. At most for 15 days per calendar month. It is still 32 euros for each following day. Until now, any money paid over the maximum was taxed [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/leinonen.eu\/est\/news\/important-tax-amendments-that-have-entered-and-will-enter-into-force-in-2016\/\" \/>\n<meta property=\"og:site_name\" content=\"Leinonen Estonia\" \/>\n<meta property=\"article:published_time\" content=\"2016-11-08T00:00:00+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@leinonengroup\" \/>\n<meta name=\"twitter:site\" content=\"@leinonengroup\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Leinonen Estonia\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/leinonen.eu\/est\/news\/important-tax-amendments-that-have-entered-and-will-enter-into-force-in-2016\/\",\"url\":\"https:\/\/leinonen.eu\/est\/news\/important-tax-amendments-that-have-entered-and-will-enter-into-force-in-2016\/\",\"name\":\"Important tax amendments that have entered and will enter into force in 2016 &#8211; Leinonen Estonia\",\"isPartOf\":{\"@id\":\"https:\/\/leinonen.eu\/est\/#website\"},\"datePublished\":\"2016-11-08T00:00:00+00:00\",\"author\":{\"@id\":\"\"},\"breadcrumb\":{\"@id\":\"https:\/\/leinonen.eu\/est\/news\/important-tax-amendments-that-have-entered-and-will-enter-into-force-in-2016\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/leinonen.eu\/est\/news\/important-tax-amendments-that-have-entered-and-will-enter-into-force-in-2016\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/leinonen.eu\/est\/news\/important-tax-amendments-that-have-entered-and-will-enter-into-force-in-2016\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/leinonen.eu\/est\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Important tax amendments that have entered and will enter into force in 2016\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/leinonen.eu\/est\/#website\",\"url\":\"https:\/\/leinonen.eu\/est\/\",\"name\":\"Leinonen Estonia\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/leinonen.eu\/est\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"\",\"url\":\"https:\/\/leinonen.eu\/est\/news\/author\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Important tax amendments that have entered and will enter into force in 2016 &#8211; Leinonen Estonia","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/leinonen.eu\/est\/news\/important-tax-amendments-that-have-entered-and-will-enter-into-force-in-2016\/","og_locale":"en_US","og_type":"article","og_title":"Important tax amendments that have entered and will enter into force in 2016 &#8211; Leinonen Estonia","og_description":"INCOME TAX Maximum daily allowance increased The tax exempt limit of daily allowances during assignments abroad is 50 euros for the first 15 days of an assignment abroad. At most for 15 days per calendar month. It is still 32 euros for each following day. 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