ETCB Income Tax Rates in Estonia for 2024

A Northern European hub for industrial, global business services, and supply chain sectors, Estonia is a globally tax-competitive country. A key highlight is the 0% income tax on retained and reinvested profits. 

What is income tax? Income tax refers to payments that individuals or companies are required to make to the government based on earnings derived from various sources. These earnings or income may include employment wages, pensions and investments. 

The taxation system in Estonia is administered by the official tax body, the Estonian Tax and Customs Board. The Income Tax Act provides guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these income tax tables and the corresponding income tax brackets and income tax rates, for effective tax planning and to remain compliant with Estonian laws.

Here you will learn about:

• headline tax rates
• personal income tax (PIT) rates 
• corporate income tax (CIT) rates 
• capital gains tax (CGT) rates 
• withholding tax rates
• value-added tax (VAT) rates 

Headline Tax Rates in Estonia

Personal Income Tax (PIT) Rate for Individuals in Estonia for 2024

An individual resident in Estonia is required to pay tax on their worldwide income. However, non-residents are taxed only on Estonian-source income. There are no special tax rules for expatriates and local income taxes do not apply. Estonia maintains a flat tax rate which applies to all forms of income derived including employment and business income.

Personal Income Tax Due Dates

Corporate Income Tax (CIT) Rates in Estonia for 2024

Undistributed corporate profits are tax exempt and this exemption is available to Estonian resident companies and permanent establishments (PEs) of non-resident companies registered in Estonia.

The rate of corporate income tax applicable to dividends is 20/80. The rate of corporate income tax on regularly payable dividends is 14/86 and the rate of income tax additionally withheld from dividends paid to natural persons is 7%. There are no municipal or local income taxes applicable in Estonia.

Corporate Income Tax Due Dates

Capital Gains Tax (CGT) in Estonia

Capital gains from the sale of assets are taxed as part of ordinary income. For non-residents, certain capital gains may form part of their Estonian-sourced income for which they will be liable for 20% Estonian income tax.

Withholding Tax Rates for Residents and Non-Residents in Estonia

In general, withholding tax (WHT) applies to both residents and non-residents in Estonia. However, there are certain types of payments for which no WHT applies such as dividends and interest payments to non-residents. 

Estonia has entered into double taxation treaties (DTTs) with several countries; as such, tax rates may differ. A taxpayer may benefit from the provisions of these tax treaties.

Value-Added Tax Rates in Estonia