An overview of upcoming changes to tax and other laws that may affect taxation.
|
Tax-free thresholds change
|
Current |
Future |
Daily allowance |
the maximum tax-exempt limit is €50 euros for the first 15 days of a business trip abroad and 32 euros for each following day |
the maximum tax-exempt limit is €75 euros for the first 15 days of a business trip abroad and 40 euros for each following day |
Tax-exempt limit for compensation for the use of a personal car |
the tax-exempt limit of the compensation paid to a person is €0.30 per kilometre, but no more than €335 per calendar month |
the tax-exempt limit of the compensation paid to a person is €0.50 per kilometre, but no more than €550 per calendar month |
Expenses for meals for a ship crew member and a civil aircraft crew member |
the maximum tax-exempt limit is €10 per day |
the maximum tax-exempt limit is €20 per day |
Occupational health expenses |
expenses are related to business if they arise from the Occupational Health and Safety Act |
expenses which are not explicitly provided for by the Occupational Health and Safety Act, but which are reasonable and necessary in the context, may also be exempt from tax |
Expenses incurred to promote employee health |
the maximum tax-exempt limit is €100 per employee per quarter |
the maximum tax-exempt limit is €400 per employee per year |
Employee accommodation expenses |
it is not deemed to be a fringe benefit if the accommodation expenses per employee are up to €200 per calendar month in Tallinn or Tartu and up to €100 in all other cases |
it is not deemed to be a fringe benefit if the accommodation expenses per employee are up to €500 per calendar month in Tallinn or Tartu and up to €250 in all other cases |
Promotional gifts |
tulumaksuga ei goods or services provided for advertising purposes whose value without VAT is up to €10 are not subject to income tax. |
goods or services provided for advertising purposes whose value without VAT is up to €21 are not subject to income tax. |
Hospitality expenses |
the minimum tax-exempt rate of hospitality expenses is €32 per month |
the minimum tax-exempt rate of hospitality expenses is €50 per month |
Gifts made by a person entered in the list of associations with reduced income tax liability |
gifts given to persons participating in permanent youth camps or project camps and in sports events that cost up to €32 per participant are exempt from income tax |
gifts given to persons participating in permanent youth camps or project camps and in sports events that cost up to €85 per participant are exempt from income tax |
Amendments to the VAT Act
Amendments to the Value Added Tax Act, some of which will enter into force in 2025 and some in 2027, have been adopted
Adjustments entering into force in 2025
- special scheme for small businesses: a voluntary special VAT scheme for small businesses will be introduced, under which registered businesses will be able to benefit from a VAT exempted threshold of other EU countries when operating in other EU countries. The special arrangements can be applied if the turnover of a business per calendar year does not exceed €100,000 in the EU and €40,000 in Estonia, or the respective limit in another Member State. The identifier of the business that applies the special scheme is EX after the VAT payer’s registration number;
- calculation of value added tax on new buildings: the first sale of an immovable is mandatorily subject to VAT also if the thing is sold after it is taken in use and no more than a year has passed since it was first taken in use. The rules for adjustment of input VAT deducted upon the acquisition of fixed assets will also be changed. If the actual use of immovable for VAT taxable supplies when a fixed asset is first taken in use differs from the forecast at the time of construction/acquisition, the input VAT must be adjusted in full according to the first actual use;
- place of supply of virtual events: if the service is provided by way of streaming or virtually in another manner, such a service will be taxed in the country where the recipient of the service lives or is located. Services provided virtually will be taxed according to the rules for taxation of electronic services.
Adjustment entering into force in 2027
the VAT return (form KMD) with its annexes (KMD INF A and B) and the Community turnover report (forms VD/VDP) will be combined in a single return. It is also planned to create the possibility to transmit data directly from the accounts in order to calculate the person’s tax liability. This does not entail the obligation to change the way the VAT return is submitted, but provides more convenient technical solutions.
Amendments to taxation of investment gains
Several rules for the taxation of investment gains will be amended retroactively (from the beginning of 2024). Whilst previously, only losses on the transfer of securities could be deducted from taxable gains, now losses on investments made through crowdfunding platforms (including loans granted) can also be deducted. Losses on the transfer of securities can also be deducted from the gains earned through crowdfunding platforms. When declaring income for 2024, the acquisition cost of securities can be increased by the fee related to the use of a securities account, and the acquisition cost of a loan receivable, a security or a holding acquired through a crowdfunding service provider can be increased by the fee related to the use of a crowdfunding platform. The same principles will also extend to crypto assets in 2025.
The regulation of an investment account will also be changed. It will be possible to open an investment account with a payment institution, an e-money institution and an investment firm. It will also be possible to invest in covered bonds through the investment account and to make investments through crowdfunding platforms. From the beginning of 2025, it will be possible to trade in crypto assets using an investment account (except a pension investment account).
The details of the amendments can be found here.
