Consumption taxes

Nature of the tax

Value Added Tax (VAT)

Tax rate

20%

Reduced tax rate

Reduced rates are 0% and 9%.
A lower 9% rate applies to books (excluding educational books), medicines and certain supplies of heating and energy.
The 0% rate applies to exports and intra-Community supply and supplies relating to international transport.
Are exempted of VAT, leasing of immovable property, postal and heath services, social and insurance services among others.

Other consumption taxes

Excise taxes are levied on tobacco, alcohol, electricity, some packaging materials and motor fuel. To get further information on the taxation system, please visit the Website of the Ministry of Finance.
More detailed information on excise duties is available on the European Commission website.

Corporate taxes

Tax rate

Capital gains taxation

Capital gains are treated as ordinary income of Estonian resident companies but they are taxed only where there is a profit distribution.

Main allowable deductions and tax credit

The 2000 Income Tax Act changed the taxation approach of Estonia and companies became subject to income tax solely with respect to distributions. In other words, under this new law, the corporate entities are exempt from income tax on undistributed profits regardless whether they are reinvested or retained. Payment to foreign afiliates are also tax exempt.

Other corporate taxes

Land tax, social security contributions, excise duties and stamp duties, local taxes, gambling tax, heavy goods vehicle tax exist in the taxation system. More information can be found on the website Investinestonia.

Individual taxes

Tax rate

Allowable deductions and tax credit

Many deductions are allowed, and some exemptions like capital gains, scholarships paid on the basis of law, fringe benefits, accommodation reimbursements for business trips, insurance contracts, compensation for the use of private vehicles, child allowances and other subsidies and compensation paid from the State.

Special expatriate tax regime

A limited list of taxable items apply to non-residents: income from work under a labour contract or contractor's agreement in Estonia ; income from a business carried on in Estonia, dividends paid by Estonian companies, interest income received from Estonia, royalties.

Double taxation treaties

Countries with whom a double taxation treaty have been signed

See the list of the convention signed

Withholding taxes

Dividends: 0% ; Interest: 0%/21% ; Royalties: 0%/15%

Bilateral agreement

Sources of fiscal information

Tax Authorities

EMTA

Other domestic resources

Estonian Investment and Trade Agency
Consult Taxation trends in the European Union.