Information about Estonian Taxes
The Estonian taxes consists of national taxes and local taxes collected by local governments in their jurisdiction. National taxes include income tax, social tax, land tax, gambling tax, value-added tax, duty and excise taxes and heavy vehicle tax.
Estonia does not impose any gift, inheritance or estate taxes. Various transactions may be subject to payment of state fees, for example for registering new company you must pay 190 EUR for government fees.
Estonian companies pay Corporate Income Tax only on distributed profits (when dividends are paid out). Tax rate is 20% of the amount of taxable payment. Dividends paid to non-residents are not subject for withholding tax.
Fringe benefits are taxable at the level of employer and income tax on these benefits is payable on monthly basis.
The general VAT rate is 20% of the taxable value of a good or service.
A tax rate of 9% applies to some goods and services – for instance books (including textbooks and workbooks), periodicals, accommodation services, and medicines, health and hygiene products specified by the Ministry of Social Affairs, and medical equipment for use of disabled persons.
A 0% VAT rate is in effect for a number of goods, including exported goods, and consultation services provided to VAT payers in another EU member state as well as for watercraft and aircraft used in international traffic. A 0% VAT rate also applies to services provided outside Estonia, a number of services related to water and air transport and carriage of goods.
VAT declarations and paying VAT
VAT must be declared and paid monthly. VAT declarations can be submitted electronically (through bank link or ID card) in Tax Authorities webpage.
If the taxable annual turnover of your company exceeds 16 000 euros, you are required to register the company with the Tax and Customs Board as a VAT payer. If turnover is below that limit, registration is not obligatory.
Employers registered in Estonia must pay 33% of Social Tax from gross salary payments made to employees. Social Tax is also paid on fringe benefits.
Employees do not pay additional social taxes to government.
Check also Estonian Tax Authorities tax calendar of how and when to pay taxes.
This post is also available in: Estonian