Taxes

Year 2015 in figures

Value Added Tax Act

  • Rate of value added tax 20% (subsection 15 (1) of the Value Added Tax Act)
  • Rate of value added tax 9% (subsection 15 (2) of the Value Added Tax Act)
  • Rate of value added tax 0% (subsections 15 (3) and (4) of the Value Added Tax Act)
  • Tax free tax exempt limit 38 euros (clause 5 (2) 2) of the Value Added Tax Act)
  • Limit on the obligation to register as a person liable to value added tax 16,000 euros (subsection 19 (2) of the Value Added Tax Act)

Social Tax Act

  • Rate of social tax 33% (subsection 7 (1) of the Social Tax Act) of the taxable amount
  • Monthly rate serving as a basis for payment of social tax 355 euros (subsection 2 (10) of the 2015 State Budget Act)
  • Employer’s minimum social tax obligation 117.15 euros (monthly rate x 33%)
  • Sole proprietor’s minimum social tax obligation 351.45 euros a quarter (1,405.80 euros a year)

Income Tax Act

  • Income tax rate 20% (clause 4 (1) 2) of the Income Tax Act)
  • Income tax rate on payments made by legal person (fringe benefits, gifts, donations, reception costs, dividends, costs not related to enterprise) 20/80 (clause 4 (11) 2) of the Income Tax Act)
  • Amount of basic exemption deductible from taxable income of a period of taxation 1,848 euros a year, i.e. 154 euros a month (§ 23 of Income Tax Act)
  • Increased basic exemption in the event of pension is 220 euros a month, i.e. 2,640 euros a calendar year (additional tax exemption applies only to the recipients of the first and the second pillar pension and the exemption is applied by the payer of the pension) (§ 232 of the Income Tax Act)
  • There is no tax exempt limit on accommodation expenses related to business trips both in the event of domestic as well as foreign business trips (clause 13 (3) 1) of the Income Tax Act). Accommodation expenses related to business trips are deemed to be expenses related to enterprise regardless of the amount thereof and they involve no additional tax liability
  • Income tax is not charged on contributions made by the employer to the employee’s third pension pillar. The limit exempt from income tax for the employer is 15% of the payments made to the employee during a calendar year, but no more than 6,000 euros a year (clause 13 (3) 15) of the Income Tax Act)
  • Deductions permitted to be made from taxable income are limited to 1,920 euros per taxpayer, and to not more than 50% of the taxpayer’s income taxable in Estonia for the same period of taxation (§ 282 of the Income Tax Act). This concerns the right to deduct housing loan interest, training expenses and gifts and donations and is applied to expenses incurred as from 01 January 2012
  • A taxpayer also has the right, in the same period of taxation or in three following periods of taxation to deduct from taxable income expenses relating to forest management (subsection 37 (8) of the Income Tax Act)
  • Fringe benefits do not include formal education acquired within the adult education system which is directly related to employment and service relationship and functions of a member of management board of a legal person, director of a branch of a foreign company and manager of another permanent establishment of a non-resident (clause 48 (4) 10) of the Income Tax Act)
  • The loan interest rate serving as a basis for fringe benefit is the last interest rate applicable to the main refinancing operations of the European Central Bank before 1 January or 1 July of each year, the publication of which is organised by Eesti Pank (clause 48 (4) 6) of the Income Tax Act, subsection 94 (2) of the Law of Obligations Act)

Funded Pensions Act

  • The rate of contribution to funded pension depends on whether the person required to make contributions to funded pension submitted an application in 2013 for increasing their share of contribution to funded pension from 2% to 3% in years 2014-2017. 3% of contribution to mandatory funded pension must be withheld on payments made to persons who submitted an application for temporary increase in the rate of the contribution and 2% of contribution to mandatory funded pension must be withheld on payments made to persons who did not submit the application. The employer must verify the per cent of the rate of contributions to funded pension to be made by its employees (www.pensionikeskus.ee).

Regulation on unemployment insurance premium

  • Rate of unemployment insurance premium for the insured person 1.6% (§ 2 of Government of the Republic Regulation No. 151)
  • Rate of unemployment insurance premium for the employer 0.8% (§ 3 of Government of the Republic Regulation No. 151)

Regulation on minimum rate of remuneration

  • Minimum rate of remuneration in an hour 2.34 euros (subsection 1 (2) of Government of the Republic Regulation No. 166)
  • Minimum rate of remuneration in a month 390 euros (subsection 1 (2) of Government of the Republic Regulation No. 166)

Parental Benefit Act

  • Rate of parental benefit 355 euros (subsection 2 (5) of the 2015 State Budget Act)
  • Maximum amount of parental benefit 2,548.95 euros (3 x €849.65, subsection 3 (4) of the Parental Benefit Act)

Commercial Code

  • Minimum share capital of a private limited company 2,500 euros (§ 136 of the Commercial Code)
  • Minimum share capital of a public limited company 25,000 euros (§ 222 of the Commercial Code)

Alcohol, Tobacco, Fuel and Electricity Excise Duty Act
State Family Benefits Act

  • Child allowance for the first and second child of a family is 45 euros. Child allowance for the third and each subsequent child of a family is 100 euros (subsection 5 (4) of the State Family Benefits Act)

State Budget Act

  • The child allowance rate serving as a basis for the calculation of single parent’s child allowance, conscript’s child allowance or child allowance of a person in alternative service, and start in independent life allowance is 9.59 euros a month (subsection 2 (4) of the 2015 State Budget Act)
  • Rate of child care allowance 76.70 euros a month (subsection 2 (4) of the 2015 State Budget Act)
  • Maximum rate of business start-up subsidy meant for the unemployed 4,474 euros (clause 2 (7) 1) of the 2015 State Budget Act)
  • Daily rate of unemployment allowance 4.01 euros (clause 2 (7) 3) of the 2015 State Budget Act)
  • Rate of subsistence level 90 euros a month (clause 2 (8) 1) of the 2015 State Budget Act)
  • Rate of state funeral benefit 250 euros (subsection 2 (9) of the 2015 State Budget Act)