Page 21 - CEE Tax Guide 2025

3) The products listed in Annex V of the VAT
VAT options in Estonia Applicable / limits
Directive and which can be placed into a licensed
Distance selling From July 1, 2021, the OSS VAT warehouse;
system is applicable.
4) Supply of services which are not deemed
Call-off stock
to be supplied in Estonia.
VAT group registration
Other indirect tax types in Estonia include excise
Cash accounting – yearly Cash accounting possible
amount in EUR (approx.) up to EUR 200,000 yearly. duty and the environmental protection charge.
From July 1, 2025, Estonia’s standard VAT rate will
Import VAT deferment
increase from 22% to 24%.
Local reverse charge – on certain goods.
Option for taxation Personal income tax /
letting of real estate – in some cases. Social security system
supply of used real estate – in some cases. Estonia has a proportional (i.e. flat) tax rate of 22%
VAT registration > EUR 40,000 which applies to all items of income derived
threshold by any resident taxpayer. The gross income
of resident individuals includes their worldwide
income from all sources, irrespective of the origin
The following transactions are subject
to Estonian VAT: of the income. Taxable income includes both
active income such as employment and business
1) The supply of goods and provision of services with income, as well as passive income. An annual basic
a place of supply in Estonia; exemption of 7,848 euros is provided for an annual
income of up to 14,400 euros. If annual income
2) The import of goods into Estonia;
increases from 14,400 euros to 25,200 euros,
3) Intra-Community acquisition of goods in Estonia; the basic exemption decreases proportionally.
If annual income is above 25,200 euros, the basic
4) The supply of goods or services specified in the
Estonian VAT Act, providing the taxable person exemption drops to 0.
has opted for taxation thereof. The Estonian social tax of 33% (comprising 20%
social security contributions and 13% health
Certain forms of supply are subject to a 0% rate (i.e. insurance contributions) must be paid by employers
exemption with credit or zero-rating), including, but in addition to the gross salary. Currently, employees
not limited to: are not required to make any personal social tax
contributions. The Estonian pension system is based
1) The export of goods;
on three pillars.
2) Intra-Community supply of goods;

Wage related taxes in Estonia Minimum wage Average wage in private sector
in EUR in EUR
886 266,800 1,736 621,200
Total wage cost 1,185 134.00% 2,323 134.00%

Social tax 292 33.00% 573 33.00%
Employer unemployment insurance premium 7 0.80% 14 0.80%
Gross salary 886 100.00% 1,736 100.00%
Employee’s unemployment insurance premium 14 1.60% 28 1.60%
Personal income tax 48 5.00% 318 18.00%
Net salary 824 93.00% 1,390 80.00%

Liisu Lell
Partner I Tax & Legal Counsel
Phone: +372 56495263
E-mail: liisu.lell@siriusadvisory.ee

Central and Eastern European tax guide 2025 Forvis Mazars 21