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Estonia: Personal Taxation

Rates of Income Tax

Personal income tax is paid at a flat rate of 21%. This includes any capital gains. Tax deductions are permitted where interest is paid relating to the purchase of a house.

Exemption for residents (personal allowance) in 2013 is EUR1,728. Certain income is not subject to income tax; the list includes:

  • Certain capital gains;
  • Fringe benefits;
  • Scholarships;
  • Reimbursement of business expenses;
  • The proceeds of insurance claims; and
  • Lottery winnings.

Any investment income is taxed on a gross basis. Income from domestic dividends, paid to an Estonian resident, is exempt from income tax, as is interest paid by Estonian banks to residents of the country. Interest paid to an Estonian resident by a non-resident is liable for personal income tax.

 

 

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