Taxes in Estonia in 2022

taxes in Estonia 2022Estonia currently offers one of the most convenient tax systems in the world. The active support of the state to small businesses has made Estonia a European center of entrepreneurship.

All business processes can be tracked online  (company registration, filing of declarations, communication with state authorities).

The Tax and Customs Department is responsible for taxes in Estonia.

Tax rates in Estonia remain the same as in 2021

  • Income tax – 20%
  • Income tax on legal person – 20/80, applies to income distributed as a dividend
  • Income tax for legal person – 14/86, applies to regularly distributed dividend profit
  • Social tax – 33%, minimum social tax – 192.72 euros per month
  • Insurance against unemployment:

for an employee – 1.6 per cent,

or employer – 0.8 per cent

  • Cumulative pension – 2% if no application for suspension of contributions is filed
  • Three rates of turnover tax 20%/9%/0

Minimum wage

C 1.01.2022 minimum wage for full-time work is EUR 654 per month or EUR 3.86 per hour.

Accounting for tax-free income of a resident of Estonia

  • If the annual income is up to €14,400, the tax-free income will be €6,000 per year.
  • If the annual income is between €14,400 and €25,200, the non-taxable income is calculated by the formula.
  • If the annual income is 25,200 euros, the tax-free income will be zero.

Annual income includes:

  • Wages (both in Estonia and abroad)
  • Dividends (both regular rate and simplified rate)
  • Dividends not subject to income tax in Estonia
  • Other income taxable (both in Estonia and abroad)

Accounting for non-taxable income of non-resident in Estonia

A non-resident of Estonia, if he is a resident of a State party to the Agreement of the European Economic Area, is entitled to tax-free income in the same way as a resident of Estonia.

For the application of the non-exhaustive minimum, it is necessary to provide:

  • Statement
  • Certified Resident Certificate

A non-resident of Estonia, if he is a resident of a State not party to the Agreement of the European Economic Area, is not entitled to tax-exempt income.

States Parties to the Agreement of the European Economic Area:

Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Greece, Hungary,  Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal,  Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland,  Czech Republic, Denmark, Finland, Hungary

Company in Estonia OÜ will be pleased to advise on tax-related issues in Estonia and provide accounting services.

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