Income Tax Rate in Estonia

Estonia does not have a progressive system for income tax. The income tax rate applicable to natural persons regardless of residence is 20%. The sole proprietor income tax rate is also 20%.

Deadlines for income tax returns

February 15 is the start date for filing income tax returns in Estonia for natural persons using form A.

April 30 is the deadline for filing income tax returns in Estonia for the reporting year.
October 1 is the due date for income tax payment in Estonia for the calendar year following the taxation period.

September 15 is the deadline for sole proprietors to make their advance payment of income tax for the 3rd quarter if taxable income was received in the previous year.

December 15 is the deadline for sole proprietors to make their advance payment of income tax for the 4th quarter if taxable income was received in the previous year.

Non-taxable minimum in Estonia

In 2024, with an annual income of up to 14400 EUR, the non-taxable income in Estonia is 7848 EUR per year or 654 EUR per month. The non-taxable income depends on the level of income, decreasing as it increases:

• For annual income between 14400 EUR and 25200 EUR, the nontaxable income decreases according to the formula 7848 – 7848 ÷ 10800 × (amount of income – 14400);
• For annual income above 25200 euros, the non-taxable income is zero.

The non-taxable income for a person who has reached retirement age is 9312 EUR per year. For a pension-age person, this amount is always stable, even if the individual does not receive a pension.

An entrepreneur – natural person is exempt from paying advance payments in the first year of activity and if the amount of one advance payment does not exceed 300 EUR.

Deductions

Income tax in Estonia can be reduced by deducting:

• Non-taxable income;
• Business-related expenses (for taxable income or business development purposes);
• Pension plan contributions (up to limits);
• Educational expenses (up to limits);
• Housing loan interest;
• Presents and donations (up to limits).

Getting tax number in Estonia

Estonia does not have a taxpayer identification number (TIN) system. However, there are three types of identification codes:

• Company Registration Code;
• Personal Identification Code (isikukood);
• Non-Resident Code.

Sole proprietors who have established a permanent establishment in Estonia must register with the Estonian Tax and Customs Board. Registration with the Tax and Customs Board requires an individual entrepreneur to submit an application under Form R2. Application requires the following documents to be enclosed:

• Confirmation of the existence of the legal entity (e.g. extract from the register);
• Confirmation of the authority of the responsible person at the place of business location;
• Notarized signature of the responsible person;
• Written agreement between the tax representative and the non-resident (if applicable).

The application can be submitted in the e-MTA e-service environment, via email to emta@emta.ee (signed with a digital signature), or directly to the Tax and Customs Board.

Procedure for refunding overpayments

Refund of overpaid tax is initiated by filing an income tax return. When completing an income tax return, it is necessary to provide bank details to which the tax overpayment will be made. It is possible to find the income tax refund decision in the e-MTA e-services environment.

The due date for refunds of overpaid income tax is October 1 of the calendar year subsequent to the taxation period.

Penalty

Penalty for late filing of income tax in Estonia:

• 0.06% of the amount of unpaid tax on a daily basis.

Penalty for non-submission of income tax return in Estonia:

• 300 fine units (currently 4 euros per unit) for individuals.