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Measure Name
Date when measure came into force
PIT tax rate decrease to 20% 2015/01/01
Increase of pensions tax-free allowance 2014/01/01
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Generic Tax Name Personal income tax
Tax name in the national language Füüsilise isiku tulumaks
Tax name in English Personal income tax
Member State EE-Estonia
Tax in force since 2000/01/01
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other

Social security contribution Employers
Employees
Other
 
Legal base

Income Tax Act, current law entered into force 01.01.2000 (State Gazette 1999, 101, 903).
Last amended 18.12.2014 (State Gazette I, 23.12.2014, 4), entered into force 01.01.2015.

 
Who sets
The tax rate is set by




The tax base is set by




The reliefs are set by




Comments
 
Beneficiary





Comments

Without taking the deductions into account, 11.6 (from 01.01.2014) per cent of the taxable income of a resident natural person is received by the local government. The remaining part of income tax and income tax paid on pensions and gains derived from the transfer of property is received by the state.

 
Geographical Scope

Estonia.

 
Taxpayers
Domestic-source income of non-residents is Taxed
Not Taxed
Comments

Employment incomes of married couples are Taxed jointly
Taxed separately
Comments


Comments

Married couples are able to submit a joint declaration if they wish to do so.

 
Tax object and basis of assessment
As general rule, taxable income under personal income tax includes























Comments

Income considered Domestic income
Worldwide income (subject to double-tax relief)
Comments

Benefits in kind
The following benefits in kind are usually (partially or fully) taxable












Comments


Comments

Benefits in kind are taxed under the corporate income tax regulation.

 
Deductions, Allowances, Credits, Exemptions
Deduction for professional expenses.
The deduction is:





Comments

These expenses are deductible in case the individual is registered as private entrepreneur.


Deductions from the tax base
The following items are usually (partially or fully) deductible

















Comments

Allowances
The basic yearly allowance for an individual amounts to: 1,848.00  EUR/National currency
The basic yearly allowance for a couple amounts to: 3,696.00  EUR/National currency
Additional allowance for 1st child 0.00  EUR/National currency
Additional allowance for 2nd child 1,848.00  EUR/National currency
Additional allowance for 3rd child 1,848.00  EUR/National currency
Additional allowance for additional child 1,848.00  EUR/National currency
Additional allowance for old age dependents 2,640.00  EUR/National currency
Comments

Credits
The basic yearly credit for an individual amounts to:
The basic yearly credit for a couple amounts to:
Additional credit for 1st child
Additional credit for 2nd child
Additional credit for 3rd child
Additional credit for additional child
Additional credit for old age dependents
There are tax credits for:

















Comments

Losses
Losses can be
Carried-forward for Indefinite
 Years
Carried-back for Indefinite
 Years
Transferred to spouse or partner
Comments

Exemptions
The following income is exempted from income tax























Comments


Comments

Losses can be carried-forward only by self-employed persons.

The deductions related to interest, education and donations and gifts are altogether limited to 1,920 EUR per taxpayer during a period of taxation, and to not more than 50 per cent of the taxpayer's income of the same period of taxation, after the deductions relating to enterprise have been made.

 
Rate(s) Structure
The following personal income tax rates apply to aggregate annual income (allowances not included)
Bracket 1 From   EUR/Natcur
To   EUR/Natcur
Rate: 20.00 %
Comments

Regional taxes
Regional taxes are (rate in capital region) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Local/municipal taxes
Local taxes are (rate in capital city) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Special surcharges
There are special surcharges in the form of:
Surcharge 1 : Name:
A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Separate taxation
Separate taxation applies to the following items: Employment income
Income from business or self-employed activities
Income from sport and entertainment activities
Benefits in kind (company car, meal cheques, etc) 20.0 %
Pension income
Owner-occupied immovable property
Dividends
Interests from government bonds
Interests from corporate bonds
Interests from special saving accounts
Interests from deposits
Royalties
Income from renting immovable property
Income from renting movable property
Capital gains on immovable property
Capital gains on movable property
Inheritance
Annuities from life insurance
Prizes and awards
Scholarships
Income from occasional activities
Revenues from donations and gifts
Revenues from lotteries and games activities
Comments

Withholding taxes
The tax is withheld when paid to residents on: Dividends:
Final Creditable
Interests from governments bonds: 20.00 %
Final Creditable
Interests from corporate bonds: 20.00 %
Final Creditable
Interests from special saving accounts:
Final Creditable
Interests from deposits:
Final Creditable
Comments


Comments

Benefits in kind are taxed under corporate income tax regulation.

The tax rate of 10% is applicable to the following payments made by an insurer holding to a policyholder under an insurance contract for a supplementary funded pension or payments made to a unit-holder of a voluntary pension fund:

  • payments made after the policyholder or unit-holder has reached 55 years of age but not before five years have passed since the entry into the system;
  • payments made in the event of the total and permanent incapacity for work of the policyholder or the unit-holder;
  • payments made in the event of liquidation of the insurer or the pension fund.
 
Tax due date

The taxable period is one calendar year. Personal income tax returns shall be submitted to the tax authority by 31st of March of the following year. Taxpayer is required to transfer any additional amount due which is specified in the tax notice to the bank account of the Tax and Customs Board not later than by 1 July of the calendar year following the period of taxation.

 
Tax collector

The tax is collected by the Tax and Customs Board.

 
Special features

E-declaration:

The Tax and Customs Board shall complete the income tax return concerning the income of a resident natural person during a period of taxation and the deductions made on the basis of the data at the disposal of the Tax and Customs Board and make the pre-completed tax return available to the taxpayer through the e-service of the Tax and Customs Board.If the taxpayer uses the pre-completed tax return, he or she is required to verify the correctness of the data contained in the tax return and submit an amended and supplemented tax return in event of incorrectness or deficiency of the data.

Tax changes:

On 01/01/2015 (approved 02/07/2014) came into effect the increase of basic tax exempt from 1,728€ in 2014 to 1,848€ in 2015. Estimated cash based revenue effect in 2015 is ca -14 mil €, 2016 ca -19 mil, 2017 ca -20 mil, 2018 ca -21 mil. The goal is to lower tax burden of labour.

On 01/01/2015 (approved 30/06/2014) came into effect the increase of pensions additional tax-exempt from 2,520€ to 2,640€ in a year. Estimated cash based revenue effect in 2015 is ca -3 mil €, in 2016 -5, 2017-2018 -6 mil. The goal is to keep average old age pension untaxed.

On 01/01/2015 (approved 26/09/2014) came into effect the lowering unemployment insurance payment rate from 2.0% to 1.6% which affects PIT revenues. Estimated cash based revenue effect in 2015-2016 ca 4 mil €, 2017 -2018 ca 5 mln € per year. PIT increases due to increase in tax base. Low unemployment rate and sufficient reserves allow lowering the rate and decrease tax burden of labour.

On 01/01/2015 (approved 02/07/2014) came into effect the taxing agricultural subsidies. Estimated cash based revenue increase in 2015-2018 1.5 mil € per year. Goal is to increase tax revenues by widening tax base.

 
Economic function







Comments
 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d51ma

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 931.30 EUR 5.17
2011 845.80 EUR 5.08
2010 776.40 EUR 5.28
2009 788.60 EUR 5.58
2008 1,010.90 EUR 6.12
2007 935.70 EUR 5.76
2006 746.40 EUR 5.52
2005 622.20 EUR 5.53
2004 608.10 EUR 6.26
2003 563.60 EUR 6.47
2002 498.90 EUR 6.42
2001 453.70 EUR 6.50
2000 421.40 EUR 6.83
1999 417.50 EUR 7.76
1998 398.40 EUR 7.94
1997 334.90 EUR 7.48
1996 278.20 EUR 7.44
1995 233.80 EUR 8.06

Comments