Estonia Tax Card 2026

1. Individuals

1.1 Personal Income Tax

The tax year in Estonia is the calendar year. 1.1.1 Residency

Resident natural persons submit income tax returns on their income received during the previous calendar year.

Non-residents must submit their income tax return themselves if they receive income in Estonia from business or the transfer of property.

Submission of income tax return is obligatory for:

• sole proprietors (in addition to the basic form of an income tax return (form A) they must submit an income tax return on business income (form E)
• persons who received income (incl. dividends) from abroad. Both, income from employment and dividends taxable in Estonia and also income, which in accordance with the international agreements is not taxed in Estonia, must be declared
• persons to whom basic exemption was applied during the year in an amount exceeding the allowed annual basic exemption
• persons whose loss upon transfer of securities is bigger than gains derived from transfer of securities in the period of taxation and who wish to deduct the amount by which the loss exceeds the gains from the gains received from transfer of securities in subsequent periods of taxation
• persons who have made contributions to or disbursements from the investment account
• persons who want to declare increased basic exemption for spouse

1.1.1 Rates & Yearly Tax Exemption

Basic exemption no longer depends on a person's income and does not decrease as income increases.

1.1.2 Income Declared in Tax Return

• Wages, salary and pension
• income from employment, sickness benefit, state pension, interest and other taxable income on which income tax has been withheld
• envelope wages
• entrepreneur account (LHV Pank's service)
• income earned abroad
• Income for rent (rented real estate or agricultural land)
• Sale of securities
• Investment account
• Sale or exchange of crypto-assets
• Sale of real estate

1.1.3 Deductions

• basic exemption (amount depends on the amount of annual income)
• contributions to supplementary funded pension (up to 15% of taxable income, but not more than 6 000 EUR)

1.1.4 Annual Income

Annual Income includes:

• remuneration and other fees (holiday pay, grant, sickness benefit etc.);
• service fees received on the basis of a contract under the law of obligations;
• business income;
• gains from transfer of property;
• rental income, royalties, interest;
• dividends;
• taxable state pension, including the flexible old-age pension and the old age pension under favourable conditions related to certain occupations (e.g. occupations that are detrimental to health, superannuated pensions, and the pension of a policeman, prosecutor, judge, official of the National Audit Office, and Chancellor of Justice if a person has not reached the pensionable age) from I pillar;
• payments from supplementary funded pensions (III pillar), which is taxed with 20% tax rate;
• benefits, scholarships and grants, awards, compensations or other income.

Annual Income does not include:

• compensations, benefits, scholarships and grants exempt from tax;
• tax exemptions (for example sale of housing or transfer of movable property in personal use) which are not declared in a natural person's income tax return;
• payments from mandatory funded pension (II pillar) and supplementary funded pension (III pillar) exempt from tax;
• payments (incl. compensations) from mandatory funded pension (II pillar) which have been taxed with 20% or 10% tax rate and
• payments from supplementary funded pension (III pillar) which have been taxed with 10% tax rate.

2.Corporate Tax

Estonian legislation is transparent and supportive of business, offering one of the most competitive and investment-friendly taxation system in Europe. Estonia is well known as a digital country; E-Estonia. The goal of the development of a digital country in the 2030 development plan (Estonian Digital Agenda 2030): enhancing the country's digital power.

Estonia is the only country where anyone can register a company from anywhere, without being physically present there, and in record speed. Company registration only takes 2-4 hours, including registration as a VAT-liable person. There's no need for a local director, and with eResidency, distributed management teams can start and run a company easily from anywhere.

2.1 E-Residency

Estonia is the first country to offer e-Residency.

An e-resident is a foreigner, for whom, as a benefit, Estonia has created a digital identity and issued a digital identity card – an e-resident digi-ID, on the basis of the identification credentials of their own country of citizenship. Electronic ID is key to all the Estonian e-services that require authentication. Holders of an e-resident's digi-ID card can log into every portal and access every information system that accepts the Estonian ID-card.

For example, e-resident entrepreneurs can make transactions in an internet bank, electronically submit income tax returns, as well as digitally sign documents and contracts.

E-Residency, however, does not provide tax residency, right of residence, or permission to enter Estonia or the European Union. The digital ID of an e-resident is not a physical identity or travel document, and it does not include a photo.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.