Value Added Tax Act (VATA)

• Rate of value added tax is 20% (§ 15 (1) of the VATA)
   
• Rate of value added tax is 9% (§ 15 (2) of the VATA)
   
• Rate of value added tax is 0% (§ 15 (3) and (4) of the VATA)
   
• Tax-free threshold is 38 euros (§ 5 (2) 2) of the VATA)
   
• Threshold for obligation to register for VAT is 16,000 euros (§ 19 (2) of the VATA) 

Social Tax Act (STA) 

• Rate of social tax is 33% (§ 7 (1) of the STA) of gross wages
   
• Monthly rate which is the basis for payment of social tax is 355 euros (§ 2 (10) of the 2015 State Budget Act)
   
• Minimum social tax liability of employers is 117.15 euros (monthly rate x 33%)
   
• Minimum social tax liability of sole proprietors is 351.45 euros per quarter (1405.80 euros per year) 

Income Tax Act (ITA) 

• Rate of income tax is 20% (§ 4 (1) 2) of the ITA)
   
• Rate of income tax on payments of legal persons (fringe benefits, gifts, donations, costs of entertaining guests, dividends, and expenses not related to business) is 20/80 (§ 4 (1¹ ) 2 of the ITA)
   
• Amount of basic exemption deductible from income during a period of taxation is 1848 euros per year, that is 154 euros per month (§ 23 of the ITA)
   
• Increased basic exemption in event of pension is 220 euros per month, that is 2640 euros per calendar year (increased tax exemption applies only to those receiving I and II pillar pension, and the person applying the exemption is the person paying the pension) (§ 232 of the ITA)
   
• There is no tax exemption threshold for accommodation expenses related to business trips both in event of business trips within the country and abroad (§ 13 (3) 1) of the ITA). Irrespective of the amount, accommodation expenses related to business trips are deemed business-related expenses, and it does not give rise to additional tax liability.
   
• Income tax is not charged on contributions made by employers to employees’ III pension pillar. The tax exemption threshold for employers is 15% of payments made to employees during a calendar year, but no more than 6000 euros per year (§ 13 (3) 15) of the ITA)
   
• From taxable income it is allowed to deduct up to 1920 euros in total per taxpayer, but no more than 50% of the taxpayer’s income taxable in Estonia for the same period of taxation (§ 28² of the ITA). It applies to the right to deduct housing loan interest, training expenses as well as gifts and donations, and it is applied to expenses incurred after 01.01.2012.
   
• During the same period of taxation or three following periods of taxation, the taxpayer also has the right to deduct from taxable income expenses related to forest management (§ 37 (8) of the ITA)
   
• Fringe benefit is not formal education acquired within the adult education system which is directly related to the employment or service relationship and functions of a member of the management board of a legal person, the director of a branch of a foreign company and the manager of another permanent establishment of a non-resident (§ 48 (4) 10) of the ITA)
   
• The loan interest rate which serves as the basis for fringe benefits is the last interest rate applicable to the main refinancing operations of the European Central Bank before 1 January and 1 July of each year, the publication of which is organised by the Bank of Estonia (§ 48 (4) 6) of the ITA, § 94 (2) of the Law of Obligations Act) 

Funded Pensions Act (FPA) 

• Rate of contribution to the funded pension depends on whether a person obligated to make contributions to the funded pension filed an application in 2013 to increase the contribution made by the person from 2% to 3% for the period 2014–2017. If a person filed an application to temporarily increase his/her rate of contribution, 3% of payments made to him/her shall be withheld as a contribution to the mandatory funded pension; if a person did not file such an application, then as usual, 2% of payments made to him/her shall be withheld as a contribution to the mandatory funded pension. Employers are required to check the percentage of their employees’ contribution to the funded pension (www.pensionikeskus.ee).  

Regulation governing unemployment insurance premium 

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

Regulation governing minimum wage 

• Minimum hourly wage is 2.34 euros (§ 1 (2) of the Government of the Republic Regulation No. 166) 
   
• Minimum monthly wage is 390 euros (§ 1 (2) of the Government of the Republic Regulation No. 166) 

Parental Benefit Act (PBA) 

• Rate of parental benefit is 355 euros (§ 2 (5) of the 2015 State Budget Act)
   
• Maximum parental benefit is 2548.95 euros (3 x 849.65 €, § 3 (4) of the PBA)  

Commercial Code (CC) 

• Minimum share capital of private limited companies is 2500 euros (§ 136 of the CC)
   
• Minimum share capital of public limited companies is 25,000 euros (§ 222 of the CC) 

Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (ATFEEDA) 

Alcohol excise duty as of 01.01.2015

• Beer – 7.22 euros/vol/hl (§ 46 (1) of the ATFEEDA)
• Fermented beverages or wine with an ethanol content of up to 6% – 42.22 euros/hl (§ 46 (2) of the ATFEEDA)
• Fermented beverages or wine with an ethanol content exceeding 6% – 97.37 euros/hl (§ 46 (3) and (4) of the ATFEEDA)
• Intermediate products – 207.93 euros/hl (§ 46 (5) of the ATFEEDA)
• Other alcohol – 18.89 euros/vol/hl (§ 46 (6) of the ATFEEDA)

Tobacco excise duty

• Fixed rate for cigarettes is 46.50 euros but no less than 90 euros per 1000 cigarettes and a proportional rate of 34% of the maximum retail price of the cigarettes (§ 56 (1) of the ATFEEDA) 

Environmental Charges Act (ECA) 

• Rates for extraction of mineral resource reserves belonging to the state (§ 9 (2) of the ECA)
• Rates for water abstraction charge for the abstraction of water from a water body or aquifer (§ 10 (3) of the ECA)
• Rates of fishing charge for commercial fishing in 2015 (§ 11 (2) 1) of the ECA)
• Pollution charge rates upon emission of pollutants into ambient air (§ 19 of the ECA)
• Pollution charge rates upon discharge of pollutants into water bodies, groundwater and soil (§ 20 of the ECA)
• Pollution charge rates upon waste disposal (§ 21 of the ECA) 

State Family Benefits Act (SFBA) 

• Child allowance for the first and second child is 45 euros. Child allowance for the third and each subsequent child is 100 euros (§ 5 (4) of the SFBA) 

State Budget Act 

• The child allowance rate which is the basis for calculating the allowance for a child of a single parent, a conscript or a person in alternate service and the start in independent life allowance is 9.59 euros per month (§ 2 (4) of the 2015 State Budget Act)
   
• Rate of child care allowance is 76.70 euros per month (§ 2 (4) of the 2015 State Budget Act)
   
• Maximum rate of setting-up aid for the unemployed is 4474 euros (§ 2 (7) 1) of the 2015 State Budget Act)
   
• Daily rate of unemployment support is 4.01 euros (§ 2 (7) 3) of the 2015 State Budget Act)
   
• Rate of subsistence level is 90 euros per month (§ 2 (8) 1) of the 2015 State Budget Act)
   
• State funeral benefit is 250 euros (§ 2 (9) of the 2015 State Budget Act)

 

Other useful information

• Working time calculation in 2015
• Tax rates and basic exemption in 2015