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Relevant changes in the Estonian tax laws
22 October 2015
On 21st of May the Government of Estonia approved several bills for changing the tax laws. Please see below short overview of the relevant changes.
National social insurance tax
With the proposed changes the rate of social tax will be decreased from 33 % to 32,5% and from the year 2018 the rate of social tax will be 32 %.
Personal income tax
- With the proposed changes the tax free minimum will be increased from 154 euro to 205 euro within the next 4 years.
- Tax free daily allowance will be increased till 50 euro, for the first 15 days the tax free daily allowance is 50 euro and after that 32 euros.
- The total amount of deductions which can be made from natural person’s income will be decreased from 1920 euro to 1200. This change will influence home loan interest, educational costs and donations.
Alcohol, Tobacco, Fuel and Electricity Excise Duty Act
- Starting from February 2016 the excise duty on alcohol will be raised by 15 %.
- During the years 2016-2018 the excise duty on tobacco will be increased by 3 %.
- In the years 2019-2020 the excise duty on alcohol and tobacco will be increased an additional 10 %, except vine excise which will increase 20 % as well as fermented beverages.
The aim of these changes is to make alcohol beverages and tobacco less available to the public.
- Petrol excise duty will be raised 10 % within the next 3 years.
- Diesel excise duty will be raised 14 % in January 2016 and an extra 10 % within 2017-2018.
- The excise duty of solid fuels like coal, brown coal and oil shale will rise from 0,3 euro to 0,93 euro.
Value added tax
The VAT for accommodation establishments will be raised from 9 % to 14 % starting from 2017.
Kati Kruut
English speaking solicitor the Gencs Valters Law Firm in Tallinn, practising in fields of Corporate and Tax law in Estonia, Latvia and Lithuania.
T: +372 61 91 000
F: +372 61 91 007