Estonia has a proportional income tax system. Personal income tax is 20% for everyone – not all type of income is taxable. Residents of Estonia are subject to income tax on their worldwide income. Nonresidents are subject to income tax on income from Estonian sources only.

Tax residence in Estonia

For tax purposes, individuals are considered to be residents if they have a permanent place of residence in Estonia or if they remain in Estonia for at least 183 days during a period of 12 consecutive calendar months. Natural persons must inform the tax authorities about the establishment or change of their Estonian residency by submitting a special registration form to the tax authorities.

Income that is subject to income tax in Estonia

Income for income tax purposes is income derived from all sources, including salaries, wages, pensions, scholarships, grants, capital gains, lottery prizes, directors’ fees, insurance indemnities, payments from a pension fund (supplementary or voluntary pension), rent payments, royalties, interest accrued from loans, securities, leases or other debt obligations, and other payments made for services rendered (under contracts governed by the Law of Obligations, which stipulates the terms of civil law agreements).Individuals acting independently in their own name and at their own risk are subject to income tax on income derived from self-employment or entrepreneurial activities.Education allowances provided by employers to their local or expatriate employees’ children are taxable for income tax and social tax purposes.Items excluded from taxable income. In general, fringe benefits, including a company car, housing, lunch vouchers and similar items, are not treated as taxable income of the recipient. Instead, the Estonian employer pays the income tax on fringe benefits, including fringe benefits provided by a nonresident company belonging to the same group as the employer. If foreign employees working in Estonia are paid solely by a foreign company, the foreign company must register in Estonia as a nonresident employer and pay income tax and social tax (if no A1 certificate is in place) on fringe benefits provided to the employee working in Estonia. In the case of an A1 certificate, the foreign employee is not liable for Estonian social tax in accordance with the rules of European Council Regulation No. 883/2004.

Exemptions

Various items are excluded from the taxable income of residents, including, but not limited to, the following:

  • Inheritances received (accepted succession)
  • Gifts received from other individuals, state or local government authorities, resident legal persons or nonresidents through or on account of their permanent establishment registered in Estonia
  • Insurance proceeds received under specific insurance contracts
  • Dividends received from resident companies except dividends taxed at a lower rate under a special three-year distribution rule
  • Dividends received from nonresident companies, if income tax was paid on the share of profits out of which the dividends were paid or if income tax on the dividends was withheld in a foreign country
  • Income from the exchange of a holding (for example, shares) in the course of a merger, division or transformation of companies or nonprofit associations or a merger of investment funds
  • Income from the increase or acquisition of a holding in a company through a non-monetary contribution
  • Income from the exchange of units of an investment fund
  • Income from transfers of movable property used for personal purposes
  • Gains derived from transfers of real estate, structures or apartments treated as movables or as contributions to housing associations if the asset is privatized under government order, is received as restitution for the unlawful alienation of property or is used as the taxpayer’s primary or permanent place of residence
  • Gains derived from transfers of summer cottages or garden houses owned by residents for more than two years if the size of the land related to the cottage or house does not exceed 0.25 hectares
  • Employment income and service fees for working in a foreign state if the individual has stayed in the foreign state for the purpose of employment for at least 183 days during a period of 12 consecutive calendar months and if the relevant income has been included in the taxable income of the person in the foreign state and this is certified, with the amount of income tax indicated on the certificate (even if the amount is zero)
  • Per diem allowances and accommodation costs of business trips, and compensation for business use of a private car, in accordance with the prescribed rates
  • Childbirth allowances paid by an employer to an employee or public servant, in an amount not exceeding EUR 2,500
  • In-service training and retraining of employees paid for by the employer on termination of the employment or service relationship as a result of redundancy
  • Payments at prescribed rates by an employer for the treatment of damage caused to the health of an employee or public servant as a result of an accident at work or an occupational disease
  • Payments made to diplomats on the basis of the Foreign Service Act
  • Benefits paid to victims of crime under the law
  • Gambling winnings received from gambling organized on the basis of an operating permit or registration
  • Pensions in accordance with the prescribed limits
  • Scholarships that are paid by the state or that are mandatory according to the law, if they are not paid with respect to entrepreneurship, employment or management board member status
  • Property returned as restitution in the course of ownership reform.

In addition, compensation for certified expenses incurred for the benefit of another person and compensation for direct proprietary damage that is not paid with respect to entrepreneurial activities are not deemed to be taxable income of a resident, except for compensation that is paid subject to separate terms, conditions and limits, such as compensation for the business use of a private car.

Inheritance and gift tax in Estonia

Inheritance and gift taxes are not levied in Estonia. However, gifts received from nonresident entities are taxed at a rate of 20%.

Taxation of Self-employment Income in Estonia

Registered sole proprietors’ income attributable to self-employment or entrepreneurship is subject to income tax and social tax. General partnerships are taxed as separate entities.

Entrepreneur account

An individual not registered as a sole proprietor can open an entrepreneur account (a bank account in a credit institution resident in an EEA member state) for business income simplified taxation. Income derived from selling goods or services transferred to the business income account is subject to business income tax. The business income tax rate is 20% of the total amount received into the entrepreneur account if the amount does not exceed 25 000 euros per calendar year and 40% if the amount exceeds 25 000 euros received into the entrepreneur account per calendar year.

The tax should be automatically calculated, withheld and paid to the tax authorities on a monthly basis by the credit institution. The tax is used to cover all payroll tax obligations applicable to the individual proportionally. VAT registration is forbidden. No separate social security contributions are due. The individual is covered by social security, provided that the tax paid meets the minimum social tax obligation.

Who benefits from the entrepreneur account?

The entrepreneur account is useful for a person who provides services to other private persons in areas of activity that do not involve any direct expenses or who sells self-produced goods with low costs of materials or acquisition to private persons and legal persons.

Such services can be babysitting, housekeeping, gardening, repair or construction services that do not involve direct costs or in which case a customer pays for the costs. For example, a customer orders repair or construction services and buys the necessary tools and materials himself or herself.

Another example is the sale of self-produced goods to private and legal persons if the cost of raw materials or source materials is low compared to the selling price of the goods. Such a case could be the sale of handicrafts and art or the sale of food, plants etc., grown or produced by a private person. The entrepreneur account is also an appropriate solution for the new forms of entrepreneurship, allowing for the simplified taxation of fees paid by one private person to another through ride-sharing service platforms.

 

 

Who does not benefit from the entrepreneur account?

Since the total amount received into the entrepreneur account (not only the profit from the provision of services or the sale of goods) is taxed with business income tax, it is impossible to deduct costs or expenses. Therefore, in the areas of activity that involve direct or high costs, operating as a sole proprietor or through a private limited company is more beneficial. For example, when selling or distributing goods, it is important to deduct the acquisition costs from the income.

Taxation of Investment Income in Estonia

Dividends received by residents from resident companies are exempt from tax. However, dividends received from resident companies that are taxed at a lower rate under a special three-year distribution rule are included in the individual’s taxable income. Residents are taxed on all dividends and other profit distributions received from foreign companies unless income tax was paid on the profits from which the dividends were paid or if income tax on the dividends was withheld in a foreign country.Dividends paid to shareholders are not subject to withholding tax. However, dividends paid to individuals (including nonresident individuals) are subject to an additional 7% income tax withholding if those dividends are paid by a resident company and taxed at a 14% corporate income tax rate at the company level.Dividends and profit distributions paid by resident companies are subject to corporate income tax at a rate of 20% at the level of the distributing companies at the moment of the profit distribution. This tax is not a withholding tax and is paid by the company in addition to the amount of dividends distributed.

Rental payments and royalties paid to resident individuals are subject to withholding tax at a rate of 20%. However, if a dwelling is rented out under a rental agreement, under certain conditions, the tax authorities consider 20% of rental income as rental-related costs and only 80% is taxed. This deduction can be applied through the personal income tax return.

Estonian income tax for nonresidents

Nonresident individuals are taxed on the following types of income derived from Estonian sources:

  • Income from the alienation or lease of assets registered in Estonia.
  • Interest received as a result of ownership of a contractual investment fund if the fund has owned (directly or indirectly) at any time during the two-year period before the date of interest payment more than 50% of real estate located in Estonia and if the interest recipient owns at least 10% of the investment fund unless the profits of the investment fund have been already taxed.
  • Royalties and income from sales or licenses of patents, copyrights, trademarks, software, know-how and other information received from Estonian persons.
  • Liquidation distributions and payments related to a company’s reduction of its stock capital, to the extent the amount received exceeds the acquisition cost of the shares, except for the portion of the amount received that has been taxed at the level of the company making the payments.
  • Salary, wages and other employment income for work performed in Estonia if more than 183 days are spent in Estonia or if the payments are made by a resident or a nonresident registered in Estonia. Nonresident rental employee employment income becomes taxable in Estonia from day one if the user entity is an entity registered in Estonia.
  • Income of nonresident board members (this income is taxed even if the remuneration for managing the Estonian company is paid by a foreign company).
  • Dividends or other profit distributions received from Estonian resident companies that were taxed at a reduced rate of 14% at the company level.

Nonresidents are exempt from tax on the following types of income:

  • Inheritances received (accepted succession)
  • Income from the transfer of movable property used for personal purposes
  • Expropriation payments and compensation paid on expropriation
  • Income from the exchange of a holding (for example, shares) in the course of a merger, division or transformation of companies or nonprofit associations or a merger of investment funds
  • Income from the increase in or acquisition of a holding in a company through a non-monetary contribution
  • Income from the exchange of units of an investment fund
  • Interest received by nonresident individuals from resident credit institutions or branches of nonresident credit institutions entered into the Estonian commercial register
  • Per diem allowances and accommodation costs with respect to business trips and compensation for business use of a private car, in accordance with the prescribed rates
  • Gains derived from transfers of real estate, structures or apartments treated as movables or as contributions to housing associations if the asset is privatized under government order, is received as restitution for the unlawful alienation of property or is used as the taxpayer’s primary or permanent place of residence
  • Gains derived from transfers of summer cottages or garden houses owned by residents for more than two years if the size of the land related to the cottage or house does not exceed 0.25 hectares

Capital gains tax in Estonia

Capital gains derived from selling business property or securities are taxable at a rate of 20%.

Capital gains derived by resident individuals with respect to the following sources are not subject to income tax:

  • Transfer of movable property that is in personal use
  • Transfer of land and assets returned in the course of ownership reform
  • Transfer of a dwelling house or an apartment, if it has been used as a permanent home until transfer (applicable to one transfer of residence during a two-year period), received as restitution or acquired as a result of privatization with the right of pre-emption and if the size of the related land does not exceed two hectares
  • Transfer of a summer cottage or garden house if it has been owned for more than two years and if the size of the related land does not exceed 0.25 hectares
  • Natural persons can register their bank accounts as investment accounts and defer the taxation of financial income until it is withdrawn from the accounts; that is, it is possible to invest the income gained from some common financial investments without being liable to annual taxation on such income.

Nonresident individuals are taxed on gains derived from the sale of property located in Estonia, excluding transfers of permanent homes under the same criteria described above regarding residents and securities issued by companies registered in Estonia. However, this exclusion does not apply if the transferred holding is a holding in a company, contractual investment fund or other pool of assets and if both of the following circumstances exist:

  • At the time of the transfer or during the two-year period before the transfer, more than 50% of the property of the company, fund or pool of assets was directly or indirectly made up of immovables or structures as movables located in Estonia.
  • At the time of transfer, the nonresident held at least 10% of the company, fund or pool of assets.

Withholding taxes in Estonia

Type of payment Rate (%)
Dividends 0/7 (i)
Interest 20
Wages and salaries 20
Payments for services rendered in Estonia
  By nonresident legal persons from noncooperative    tax jurisdictions (ii) 20
  By other nonresidents 10
Royalties
  Paid to residents 20
  Paid to nonresidents 10
Rent 20
Payments made to nonresident athletes  and artists 10
Supplementary and voluntarily funded pension payments 10
(i) The 7% withholding tax rate applies to dividends or other profit distributions received from Estonian resident companies that were taxed at a reduced rate of 14% at the company level.
(ii) Income derived from services provided to an Estonian resident is taxed in Estonia regardless of where the services are provided or used.

Income tax deductions in Estonia

The standard income tax rate is a flat rate of 20%. The basic annual exemption ranges regressively from nil to EUR 6,000, depending on the amount of the individual’s income. Estonian residents, as well as residents of other EEA member states who derive their taxable income from Estonia and file an income tax return in Estonia, may claim deductions for the following items:

  • Gifts to nonprofit organizations registered as tax-favoured in the EEA.
  • Mandatory social security payments made in Estonia or abroad from income taxable in Estonia.
  • Acquisition of voluntary pension fund units registered in the EEA, limited to 15% of income for the tax year or to EUR 6,000, after subtracting the deductions from business income (joint limits with the employer making such payments on behalf of an employee).
  • Training expenses, include costs of educating individuals and their dependents who are under 26 years old and permanent residents of Estonia who are under 26 years old and in certified educational institutions or license training. For adults, the deductions are available only for expenses for formal education, and certain additional limitations apply to driver’s license training and hobby school costs.
  • Interest paid to EEA credit institutions on housing loans for the purpose of acquiring an apartment, dwelling house or a plot of land to build a house for personal use (including erection, expansion and reconstruction of a home). The total amount of deductible gifts, housing loan interest and training expenses for a tax year is limited to EUR 1,200 or 50% of an individual’s income after business deductions. Housing loan interest is deductible up to EUR 300.
  • An increased basic exemption of up to EUR 5,000 can be deducted from the income derived from the sale of timber felled from an immovable belonging to a forest owner, the transfer of the right to cut the standing crop growing there and Natura 2000 support for private forest land after the deductions related to forest management have been made.
  • In addition to the above deductions, the following tax exemptions apply for each tax year under the same circumstances:
    • Basic tax exemption in 2023. The amount is EUR 7,848 if the annual income is up to EUR 14,400. However, if income exceeds EUR 14,400, the amount of basic tax exemption is calculated using the following formula:
      • 7,848 – 7,848 × (income amount – EUR 14,400) / 10,800If annual income exceeds EUR 25,200, no basic exemption applies.
  •  A resident in Estonia and a resident of another state that is a contracting party to the EEA agreement may take deductions into account regardless of the share of the income derived from a foreign state.
  • Deductions do not apply to crew member remuneration, which is subject to a 0% income tax, including basic tax exemption, additional tax exemption for the provision of maintenance to a child, increased basic exemption for spouse, interest paid on housing loans, training expenses, gifts and donations, insurance premiums, acquisitions of pension fund units and mandatory social security contributions.
  • Business deductions. Registered individual entrepreneurs may deduct documented expenses directly related to entrepreneurial or self-employment activities, including expenses for work-related advanced training and retraining of employees and losses incurred from the disposal of assets (except for losses incurred on the sale of securities). If certain expenses are only partly related to the entrepreneurial or self-employment activities, only the part directly related to those activities is deductible.
  • Documented expenses for entertainment, recreation, reception (catering, transport or cultural expenses incurred to serve clients or business partners), and other expenses incurred for clients or business partners with respect to entrepreneurial or self-employment activities may be deducted from income up to a maximum amount of 2% of adjusted income. Adjusted income is financial income after adjustments for nontaxable income and expenses that are not deductible for tax purposes.

Tax credits in Estonia

Foreign dividends and employment income are exempt from tax in Estonia if these types of income are taxable abroad.Residents may claim a credit for foreign tax paid, up to the amount of Estonian tax attributable to the foreign-source income. Income tax is calculated separately for income derived in Estonia and for income derived in each foreign country. The individual must pay in Estonia the difference between the foreign income tax and Estonian income tax if the income tax calculated on income derived from abroad exceeds the amount of income tax paid in the foreign country. The overpaid amount of income tax abroad is not refunded in Estonia. If the income tax on income derived in a foreign country is paid during a tax year other than the tax year in which the income is derived, the foreign income tax is taken into account in Estonia during the tax year in which the income taxable in a foreign country is received.

Relief for losses.

Losses from entrepreneurship, except losses incurred on the sale of securities and receivables, may be offset against income derived from other sources of entrepreneurship. Losses may generally be carried forward for seven years. However, losses incurred on the sale of securities may offset only income from the sale of securities and may be carried forward indefinitely.

Social security and social tax in Estonia

Social security and social tax in Estonia

  1. Social Security contributions – Social tax is levied on employers at a rate of 33%;  employees are not liable for social tax. No ceiling applies to the amount of salary subject to social tax.
  2. In addition, unemployment insurance and pension fund (if one has joined) charges are imposed on gross salary. The unemployment insurance rates are 0.8% for employers and 1.6% for employees.
  3. The pension fund rate is 2%, which applies only to employees. Employers withhold unemployment insurance and pension fund charge. The pension fund is not mandatory, and one can opt to leave or not join the pension fund. Individuals who have not joined can join. Also, individuals can withdraw and use the money accumulated in the pension fund before reaching the pensionable age. The money withdrawn from the fund before pensionable age is subject to income tax at 20%. If the money is taken out after pensionable age, a lower tax rate of 10% or a tax exemption may apply on certain conditions.

Totalization agreements

Estonian social security legislation follows the rules provided in European Council Regulation No. 883/2004, the Brexit Withdrawal Agreement and the agreement between the European Union (EU) and the European Atomic Energy Community and the United Kingdom. Estonia has applicable totalization agreements on social security with Australia, Belarus, Canada and Ukraine. It has agreements regarding pension insurance regulation with Moldova and the Russian Federation.

Social tax for Self-employed

Self-employed persons must pay social tax at a rate of 33% on their net business income, subject to a maximum amount of annual income equal to 10 times the sum of the minimum monthly wages for the tax year (maximum amount of EUR 78,480 for 2022). Self-employed persons must make quarterly advance payments of social tax to the Tax and Customs Board by the 15th day of the third month of the second, third and fourth quarters. In 2022, each payment must be at least EUR 578.16 (EUR 2,312.64 for the calendar year).

The tax regime for seamen in Estonia

Income tax for Seamen

A special personal income tax regime for seamen applies, under which a 0% income tax rate is applied to crew member remuneration derived from work done on a ship meeting the following conditions:

  • The ship has a gross tonnage of at least 500 and is used for international carriage of goods or passengers by sea, except passenger ships engaged in regular service in the European Economic Area (EEA).
  • The ship is flying the flag of an EEA contracting state.

Social tax for Seamen

Special social tax rules apply to remuneration paid to seamen. A reduced social tax rate of 20% and a fixed tax base of EUR 750 per month are applicable for qualifying entities if the following conditions are satisfied:

  • The ship has a gross tonnage of at least 500 and is used for international carriage of goods or passengers by sea, except passenger ships engaged in regular service in the EEA.
  • The ship is flying the flag of a contracting state.
  • Crew member remuneration that is subject to social tax is also subject to unemployment insurance contributions and pension fund contributions.

Taxation of employer-provided stock options

Grants of stock options are not considered taxable. However, the income received from the transfer of employer-provided stock options or from the exercise of stock options is considered a fringe benefit that is taxable to the Estonian employer for purposes of income tax and social tax unless the time period between grant and exercise of the stock options is at least three years. An exemption from company-level fringe benefits tax also applies in the case of a shorter vesting period. This exemption applies proportionally to the actual vesting period if full ownership in the relevant company (underlying securities of an option) is transferred or if the employee dies or is totally incapacitated for work. Fringe benefits include benefits that are provided by other group entities to the Estonian employee. The taxable value of a fringe benefit is the difference between the fair market value of the securities and the purchase price paid by the employee. Except for option agreements digitally signed or certified by a notary, agreements concluded should be filed with the tax authorities within five working days after their conclusion.No tax obligations are imposed on employees with respect to the receipt of non-monetary benefits from Estonian or foreign employers. However, the employees should inform their employer if such benefits are received from foreign companies. Employees must report income and pay income tax when a gain is derived from the sale of the shares. A capital gain equals the sales price reduced by the acquisition price, by the taxable value for income tax purposes of the fringe benefit paid by the employer and by the costs related to the transfer.

Estonia Double tax relief and tax treaties

Non-residents have a tax liability in Estonia in respect of the income derived exclusively from Estonian income sources. The taxation of non-residents’ income derived in Estonia is influenced by bilateral tax treaties between countries.

  • The non-residents’ income derived exclusively from Estonian income sources is taxed in Estonia. The income tax law provides relief for foreign taxes paid up to the amount of Estonian tax imposed on foreign source income.
  • Generally, income tax is withheld when disbursement is made and non-residents themselves do not have to submit a tax return. Non-residents have to declare their income themselves if it is received from the transfer of property or as a sole proprietor’s business income or as a registered permanent establishment in Estonia.

Most of Estonia’s double tax treaties follow the Organisation for Economic Co-operation and Development (OECD) model convention.

Estonia has entered into double tax treaties with the following jurisdictions:

List of tax treaties

Jurisdiction Initialled Signed Ratified In force Effective from
1 Albania 15.09.2009 05.04.2010 27.10.2010 25.11.2010 01.01.2018
(est/eng)
2 Armenia 02.10.1997 13.04.2001 11.12.2002 23.01.2003 01.01.2001
(est/eng)
3 Austria 15.12.1999 05.04.2001 17.09.2002 12.11.2002 01.01.2003
(est/eng)
4 Azerbaijan 13.09.2002 30.10.2007 24.09.2008 27.11.2008 01.01.2009
(est/eng)
5 Bahrein 06.05.2010 12.10.2012 11.12.2013 23.12.2013 01.01.2014
(eng (PDF))
6 Belarus 27.01.1995 21.01.1997 25.03.1998 22.07.1998 01.01.1999
(est/eng)
7 Belgium 15.07.1998 05.11.1999 11.10.2000 15.04.2003 01.01.2004
(est/eng)
From 1 January 2016 the state of residence has the exclusive right to tax royalties and the term “royalties” does not contain a reference to the payments for the use of, or the right to use, industrial, commercial or scientific equipment based on the most-favoured nation clause in paragraph 6 of the Protocol of the Convention between Estonia and Belgium, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
8. Bulgaria 26.10.2007 13.10.2008 10.12.2008 30.12.2008 01.01.2009
(est/eng)
9 Canada 07.07.1994 02.06.1995 13.12.1995 28.12.1995 01.01.1996
(eng (92.03 KB, PDF))
From 1 January 2016 the following types of royalties are exempt from tax in the state in which they arise: (a) copyright royalties and other like payments in respect of the production or reproduction of any literary, dramatic, musical or artistic work (but not including royalties in respect of motion picture films nor royalties in respect of works on film or videotape or other means of reproduction for use in connection with television broadcasting); or (b) royalties for the use of, or the right to use, any patent or any information concerning industrial, commercial or scientific experience (but not including any such information provided in connection with a rental or franchise agreement) based on the most-favoured nation clause in paragraph 7 of Article 12 of the Convention between Estonia and Canada, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
10 China 19.04.1996 12.05.1998 09.12.1998 08.01.1999 01.01.2000
(est/eng)
Protocol
29.03.2011 09.12.2014 21.10.2015 18.12.2015 01.01.2016
(est)(eng (PDF))
11 Croatia 08.10.1999 03.04.2002 19.05.2004 12.07.2004 01.01.2005
(est/eng)
12 Cyprus 16.02.2011 15.10.2011 25.09.2013 08.10.2013 01.01.2014
(est)(eng (PDF))
13 Czech Republic 03.03.1994 24.10.1994 14.12.1994 26.05.1995 01.01.1996
(est/eng)
14 Denmark 14.01.1993 04.05.1993 25.11.1993 30.12.1993 01.01.1994
(est/eng)
From 1 January 2016 the state of residence has the exclusive right to tax royalties and the term “royalties” does not contain a reference to the payments for the use of, or the right to use, industrial, commercial or scientific equipment based on the most-favoured nation clause in paragraph 7 of Article 12 of the Convention between Estonia and Denmark, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
15 Finland 14.01.1993 23.03.1993 25.11.1993 30.12.1993 01.01.1994
(est/eng)
From 1 January 2016 the state of residence has the exclusive right to tax royalties and the term “royalties” does not contain a reference to the payments for the use of, or the right to use, industrial, commercial or scientific equipment based on the most-favoured nation clause in paragraph 7 of Article 12 of the Convention between Estonia and Finland, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
16 France 13.04.1995 28.10.1997 25.03.1998 01.05.2001 01.01.1996
(eng (92.57 KB, PDF)) (retroactively)
From 21 May 2006 the interest arising in a Contracting State on a loan of whatever kind granted to an enterprise of that State by a bank of the other Contracting State shall be taxable only in that other State based on the most-favoured nation clause in paragraph 9 of the Protocol of the Convention between Estonia and France, which was triggered by the Amending Protocol of the Convention between Estonia and the Netherlands entering into force from the same date.
From 11 December 2015 the state of residence has the exclusive right to tax interest based on the most-favoured nation clause in paragraph 9 of the Protocol of the Convention between Estonia and France, which was triggered by the new tax treaty entering into force between Estonia and Luxembourg from the same date.
From 11 December 2015 the state of residence has the exclusive right to tax royalties and the term “royalties” does not contain a reference to the payments for the use of, or the right to use, industrial, commercial or scientific equipment based on the most-favoured nation clause in paragraph 10 of the Protocol of the Convention between Estonia and France, which was triggered by the new tax treaty entering into force between Estonia and Luxembourg from the same date.
17 Georgia 25.05.2001 18.12.2006 21.11.2007 27.12.2007 01.01.2008
(est/eng)
Protocol
22.09.2009 17.07.2010 09.02.2011 11.03.2011 01.01.2012
(est/eng)
18 Germany 07.04.1995 29.11.1996 04.06.1997 30.12.1998 01.01.1994
(eng (108.2 KB, PDF)) (retroactively)
13.07.2018 15.12.2020 05.05.2021 (eng (PDF)) 29.06.2021 01.01.2022
19 Greece 07.02.2002 04.04.2006 08.11.2006 01.08.2008 01.01.2009
(est/eng)
20 Guernsey 13.12.2018 18.11.2019 12.02.2020 (est/eng (PDF)) 06.08.2020 01.01.2021
21 Hong Kong 21.11.2018 25.09.2019 04.12.2019 (est/eng) (PDF) 18.12.2019 in Estonia 01.01.2020, in Hong Kong 01.04.2020
22 Hungary 23.01.2002 11.09.2002 19.05.2004 05.07.2004 01.05.2005
+ changed through correspondence (est/eng)
From 1 January 2016 the state of residence has the exclusive right to tax royalties and the term “royalties” does not contain a reference to the payments for the use of, or the right to use, industrial, commercial or scientific equipment based on the most-favoured nation clause in paragraph 3 of the Protocol of the Convention between Estonia and Hungary, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
23 Iceland 14.01.1993 16.06.1994 16.11.1994 10.11.1995 01.01.1996
(est/eng)
From 1 January 2016 the state of residence has the exclusive right to tax royalties and the term “royalties” does not contain a reference to the payments for the use of, or the right to use, industrial, commercial or scientific equipment based on the most-favoured nation clause in paragraph 7 of Article 12 of the Convention between Estonia and Iceland, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
24 India 30.06.2010 19.09.2011 02.05.2012 20.06.2012 Estonia 01.01.2013
(eng (PDF)) India 01.04.2013
25 Ireland 16.05.1997 16.12.1997 16.06.1998 29.12.1998 01.01.1999
(eng)
From 1 January 2016 the state of residence has the exclusive right to tax royalties and the term “royalties” does not contain a reference to the payments for the use of, or the right to use, industrial, commercial or scientific equipment based on the most-favoured nation clause in paragraph 6 of the Protocol of the Convention between Estonia and Ireland, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
26 Isle of Man 11.04.2008 08.05.2009 25.11.2009 21.12.2009 01.01.2010
(est/eng)
27 Israel 15.06.2007 29.06.2009 25.11.2009 28.12.2009 01.01.2010
(est/eng)
28 Italy 20.12.1995 20.03.1997 25.03.1998 22.02.2000 01.01.2001
(est/eng)
29 Japan 16.03.2017 30.08.2017 20.12.2017 29.09.2018 01.01.2019
(est/eng (617.53 KB, RTF))
30 Jersey 16.02.2010 21.12.2010 23.11.2011 30.12.2011 01.01.2012
(est/eng)
31 Kazakhstan 19.12.1996 01.03.1999 07.06.2000 19.07.2000 01.01.2001
(est/eng)
32 Korea 10.12.1999 23.09.2009 16.12.2009 25.05.2010 01.01.2011
(est/eng)
33 Kyrgyzstan 22.04.2016 10.04.2017 20.12.2017 07.02.2018 01.01.2019
(est/eng (PDF))
34 Latvia 25.11.1992 31.12.1993 25.11.1993 08.12.1998 01.01.1994-
(est/eng) 01.01.2002
20.09.2001 11.02.2002 23.10.2002 21.11.2002 01.01.2002
(est/eng) (retroactively)
35 Lithuania 27.11.1992 13.09.1993 25.11.1993 31.12.1993 01.01.1994-
(est/eng) 01.01.2006
 18.10.2002  21.10.2004  12.10.2005  08.02.2006  01.01.2006
(est/eng) (retroactively)
36 Luxembourg 25.04.2002 23.05.2006 13.12.2006 23.01.2007 01.01.2008-
(est/eng) 01.01.2016
 20.09.2012  07.07.2014  11.02.2015  11.12.2015  01.01.2016
(est/eng)
37 Malta 14.01.2000 03.05.2001 11.12.2002 22.01.2003 01.01.2004
(est/eng)
38 Mauritius 29.03.2019 19.02.2021 15.09.2021 (est/ eng) (PDF) 12.10.2021 01.01.2022
39 Mexico 18.11.2011 19.10.2012 16.10.2013 04.12.2013 01.01.2014
(eng (PDF))
40 Moldova 12.07.1996 23.02.1998 16.06.1998 21.07.1998 01.01.1999
(eng)
41 Netherlands 01.10.1993 14.03.1997 05.11.1997 08.11.1998 01.01.1995
(eng)
Protocol
11.11.2004 14.07.2005 31.03.2006 21.05.2006 01.01.2005
(est/eng)
04.09.2007 26.06.2008 11.03.2009 22.05.2009 01.01.2010
(est/eng)
From 1 January 2016 the state of residence has the exclusive right to tax royalties and the term “royalties” does not contain a reference to the payments for the use of, or the right to use, industrial, commercial or scientific equipment based on the most-favoured nation clause in subparagraph 3 of paragraph X of the Protocol of the Convention between Estonia and the Netherlands, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
42 North Macedonia 24.09.2008 20.11.2008 08.04.2009 21.05.2009 01.01.2010
(est/eng)
43 Norway 14.01.1993 14.05.1993 25.11.1993 30.12.1993 01.01.1994
(est/eng)
From 8 October 2014 the tax treaty between Estonia and Norway was supplemented by the mutual agreement of competent authorities to include Export Credit Norway to the list of institutions in subparagraph a) of paragraph 3 of Article 11. For further information please read the letter from the Royal Ministry of Finance of Norway (62.63 KB, PDF) from 11th of September 2014 and the corresponding letter from the Ministry of Finance of Estonia (39.29 KB, PDF).
From 1 January 2016 the state of residence has the exclusive right to tax royalties and the term “royalties” does not contain a reference to the payments for the use of, or the right to use, industrial, commercial or scientific equipment based on the most-favoured nation clause in paragraph 7 of Article 12 of the Convention between Estonia and Norway, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
44 Poland 01.07.1993 09.05.1994 23.11.1994 09.12.1994 01.01.1995
(eng (72.31 KB, PDF))
45 Portugal 03.07.1998 13.05.2003 19.05.2004 23.07.2004 01.01.2005
+ changed through correspondence (est/eng)
46 Romania 06.02.1998 23.10.2003 26.10.2005 29.11.2005 01.01.2006
(est/eng)
47 Serbia 03.04.2009 24.09.2009 17.12.2009 14.06.2010 01.01.2011
(est/eng)
48 Singapore 02.10.1998 18.09.2006 17.10.2007 27.12.2007 01.01.2008
(est/eng)
Protocol
26.07.2010 03.02.2011 23.11.2011 30.03.2012 30.03.2012
(est/eng)
49 Slovakia 15.05.1998 21.10.2003 26.10.2005 29.03.2006 01.01.2007
(est/eng)
50 Slovenia 26.10.1999 14.09.2005 17.05.2006 26.06.2006 01.01.2007
(est/eng)
51 Spain 13.07.2001 03.09.2003 15.12.2004 28.12.2004 01.01.2005
(est/eng)
From 1 January 2005 the interest arising in a Contracting State on a loan of whatever kind granted to an enterprise of that State by a bank of the other Contracting State shall be taxable only in that other State based on the most-favoured nation clause in Article VII of the Protocol of the Convention between Estonia and Spain, which was triggered by the Amending Protocol of the Convention between Estonia and the Netherlands effective from the same date.
From 1 January 2016 the duration for a building site or construction or installation project or a supervisory activity connected therewith to constitute a permanent establishment is extended to twelve months (instead of nine) and the definition does not contain a reference to assembly project based on the most-favoured nation clause in Article III of the Protocol of the Convention between Estonia and Spain, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
From 1 January 2016 the state of residence has the exclusive right to tax interest based on the most-favoured nation clause in Article VII of the Protocol of the Convention between Estonia and Spain, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
From 1 January 2016 the state of residence has the exclusive right to tax royalties and the term “royalties” does not contain a reference to the payments for the use of, or the right to use, industrial, commercial or scientific equipment based on the most-favoured nation clause in Article VIII of the Protocol of the Convention between Estonia and Spain, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
52 Sweden 14.01.1993 05.04.1993 25.11.1993 31.12.1993 01.01.1994
(est/eng)
From 1 January 2016 the state of residence has the exclusive right to tax royalties and the term “royalties” does not contain a reference to the payments for the use of, or the right to use, industrial, commercial or scientific equipment based on the most-favoured nation clause in paragraph 7 of Article 12 of the Convention between Estonia and Sweden, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland effective from the same date.
53 Switzerland 30.03.2001 11.06.2002 19.05.2004 12.07.2004 01.01.2005
(est/eng)
Protocol
25.04.2013 25.08.2014 11.02.2015 16.10.2015 01.01.2016
(est/eng)
From 1 January 2005 the interest arising in a Contracting State on a loan of whatever kind granted to an enterprise of that State by a bank of the other Contracting State shall be taxable only in that other State based on the most-favoured nation clause in paragraph 4 of the Protocol of the Convention between Estonia and Switzerland, which was triggered by the Amending Protocol of the Convention between Estonia and the Netherlands effective from the same date.
54 Thailand 25.05.2007 25.09.2012 11.12.2013 23.12.2013 01.01.2014
(eng (PDF))
55 Turkey 09.01.1998 25.08.2003 19.01.2005 21.02.2005 01.01.2006
(est/eng)
56 Turkmenistan 21.10.2011 28.11.2011 13.02.2013 15.03.2013 01.01.2014
(eng (PDF))
57 Viet Nam 16.08.2013 26.09.2015 19.10.2015 14.11.2016 01.01.2017
(eng (PDF))
58 Ukraine 02.11.1995 10.05.1996 11.12.1996 30.12.1996 01.01.1997
(eng (105.38 KB, PDF))
59 United Arab Emirates 14.10.2010 20.04.2011 15.02.2012 29.03.2012 01.01.2011
(est/eng) (retroactively)
60 United Kingdom 22.10.1993 12.05.1994 23.11.1994 19.12.1994 01.01.1995
(eng (106.19 KB, PDF))
From 21 May 2006 the interest arising in a Contracting State on a loan of whatever kind granted to an enterprise of that State by a bank of the other Contracting State shall be taxable only in that other State based on the most-favoured nation clause in paragraph 6 of the Exchange of Notes of the Convention between Estonia and the UK, which was triggered by the Amending Protocol of the Convention between Estonia and the Netherlands entering into force from the same date.
From 16 October 2015 the state of residence has the exclusive right to tax interest based on the most-favoured nation clause in paragraph 6 of the Exchange of Notes of the Convention between Estonia andthe UK, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland entering into force from the same date.
From 16 October 2015 the state of residence has the exclusive right to tax royalties based on the most-favoured nation clause in paragraph 7 of the Exchange of Notes of the Convention between Estonia and the UK, which was triggered by the Amending Protocol of the Convention between Estonia and Switzerland entering into force from the same date.
61 United States of America 06.06.1997 15.01.1998 21.10.1998 30.12.1999 01.01.2000
(est/eng)
62 Uzbekistan 13.05.2011 28.09.2012 11.12.2013 23.12.2013 01.01.2014
(eng (PDF))

 

In preparation:

Jurisdiction Initialled Signed Ratified
Bosnia and Herzegovina 02.06.2010
Morocco 29.04.2011  25.09.2013 Ratified by Estonia 15.10.2014
(est/eng (PDF))
Oman 05.12.2019
Russia 10.02.2000 05.11.2002 Ratified by Estonia
19.05.2004
(est/eng)
South-Africa 27.05.1999
Qatar 29.08.2019
Tajikistan 18.06.2015
Pakistan 21.10.2016

Tax filing and tax payment procedures in Estonia

The tax year in Estonia is the calendar year. An individual must file an income tax return if his or her annual income exceeds the amount of the basic exemption applicable to him or her and if he or she would be required to pay additional income tax based on the income tax return or if he or she would like to claim applicable tax deductions. Resident individuals also need to submit a tax return to report their foreign income. Individual income tax returns must be filed by 30 April of the year following the tax year. Individuals must pay income tax due by 1 October of the year following the tax year. Spouses cannot file a joint tax return. However, a spouse may use the other spouse’s basic exemption up to EUR 2,160, depending on the other spouse’s taxable income, provided that the sum of the spouse’s taxable income does not exceed EUR 50,400. Employers must withhold the appropriate amount of income tax from employees’ salaries. Tax liability is determined by deducting taxes withheld and creditable amounts of foreign taxes paid from the computed amount of income tax.

 

 

 

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