Taxes change in Estonia in 2025.

The following taxes change will take place in Estonia in 2025:

1. Personal income tax will increase to 22% from January 1, 2025
2. Corporate income tax will increase from January 1, 2025 to 22%. As before, this tax will be charged only in case of profit distribution.
3. The income tax payable on dividends paid will be 22/78.
4. Bank tax levy will increase from January 1, 2025 to 18%
5. The reduced income tax rate of 14% from January 1, 2025 is eliminated
6. Land tax increases from January 1, 2025
7. A new tax on motorized vehicles is introduced on January 1, 2025
8. VAT rate increases from July 1, 2025 to 24%.

Comments on tax changes in 2025:

Personal Income Tax.

Estonian tax resident individuals pay income tax on personal income from salaries, remuneration for services and remuneration for participation in the management and control bodies of a legal entity. In addition, the income of a natural person is income from contractual agreements, brokerage agreements, agency agreements and commission agreements. The income of an individual also includes income from the sale of securities and cryptocurrency.

– Personal income tax will be 22%
– Social tax 33%, monthly minimum rate for calculation of social tax is 820 EUR.
– Non-taxable income increases up to 654 EUR per month and up to 7848 EUR per year and depends on a person’s income.
– Tax-free income at old-age pension age increases to 776 EUR per month and to 9312 EUR per year.
– Contribution to funded pension 2%, 4% or 6%
– Unemployment insurance contribution for the employee 1.6% and for the employer 0.8%.

On the basis of the submitted Tax Return, there is a right to deduct from the income not more than the following amounts per year:

– 7848 EUR – non-taxable income
– 9312 EUR – for persons income old-age pension
– 1200 EUR – education expenses and donations
– contributions to additional funded pension (III pillar) – up to 15% of taxable income, but not more than 6000 EUR per year.

Corporate income tax.

Corporate income tax will increase from January 1, 2025 to 22%. This rate is applied to the net amount of income paid divided by 78. Taxation of dividends depends on when profits are distributed and when dividends are paid

VAT.

In accordance with the amendments to the Estonian Tax Law, the rate of VAT applyied to services related to accommodation and lodging in hotels and rental apartments, including breakfasts, increases from 9% to 13% from January 01, 2025.
VAT rate charged on press publishing services (newspapers, magazines) increases from January 01, 2025 from 5% to 9%.

The total VAT rate increases from July 01, 2025 from 22% to 24%.

If you have any questions or want to clarify the information in more detail, please contact our experts: corp@maxwise.eu; mainacc@maxwis.eu or via Telegram: @Maxwise_bot