labour taxes
Your employer pays all the taxes on your behalf and you don’t need to do anything about it. The 20% personal income tax is withheld from your salary. There’s also the 33% social tax, which your employer pays on your behalf (not subtracted from your salary).
good to know
Fun (or at least important) fact: If your place of residence is registered in Estonia and/or you stay in Estonia for at least 183 days out of the year, you are considered a tax resident! You’ll have to notify the Tax and Customs Board about this by submitting Form R. We recommend doing this online or via email. After this, handling your taxes in Estonia will be a breeze. Tax returns are usually pre-filled (except for income from foreign sources) and you can submit them online in about three (!) minutes.
personal taxes: income tax and social tax
- Estonia has a proportional income tax system. Personal income tax is 20% for everyone.
- Your employer pays your income tax every month. This means you don’t have to make additional payments or file monthly tax returns. Your employer also pays social tax for you (33%, but paid separately, not withheld from your salary).
taxes
The value added tax / sales tax rate in Estonia is 22%. Most goods and services are taxed at 22% and VAT is always included in the price.
There’s also a reduced VAT rate of 9% for things like books.
If you’re coming to Estonia from outside the EU (from a country you’ve previously been living in for at least 12 months), you can apply for a tax exemption on your personal vehicle, if you’ve owned it for at least six months.
The car must clear customs on arrival and you are not allowed to sell it within 12 months of getting to Estonia. This exemption can only be applied within 12 months of moving to the EU.
Customs clearance is also necessary for registering your vehicle with the Estonian Road Administration.
annual personal tax return
- Personal income tax returns are filed at the beginning of each year to report your previous year’s income.
- The deadline is 30th of April.
- Most of your information is pre-filled and the whole process is quick and painless, usually taking about three minutes.
Check the Estonian Tax and Customs Board’s website for details.
Private entrepreneurs & corporations
The income tax rate for private entrepreneurs and corporations is 20%.
Corporate earnings taxation in Estonia is unique. Earning profit in itself does not trigger income tax liability. The tax obligation arises only when earnings are distributed to shareholders. If the profit distributed to shareholders comes from dividends received from a subsidiary or permanent establishment in another country, there’s no tax to pay on profit distribution.
Estonia does not have a withholding tax on dividends paid to individuals.
relocation guide
The Relocation Guide helps you with practical issues you may come across living and working in Estonia.
