The Riigikogu adopted amendments to the Alcohol, Tobacco, Fuel and Electricity Excise Act, which repeal the increase in excise duties on energy products planned for 1 May 2026. The objective is to mitigate the impact of the global price rises and supply disruptions caused by the crisis in the Middle East on Estonian consumers and companies.
The following energy carriers are affected by the cancellation of the excise duty increase:
- motor fuels, including petrol and diesel;
- fuel oils;
- natural gas and electricity.
The excise duty rates of 2025 will remain in force in 2026 after the adoption of the Act. At the same time, the excise duty increases planned for 2027 will enter into force at the rates and by the deadlines set earlier. As the excise rate is a flat rate, the percentage increase in the next year will be higher.
The changes will enter into force on 1 May 2026.
The procedure of the Act in the Riigikogu can be found at HERE.
Amendments to the Electricity Market Act, Alcohol, Tobacco, Fuel and Electricity Excise Duty Act and the Income Tax Act
Changes to the system renewable energy fees
The objective of the amendments to the Electricity Market Act is to support competitiveness and energy-intensive companies in accordance with EU state aid rules, as well as to promote the use of renewable energy and energy efficiency.
A discount on renewable energy fees will be established for large electricity consumers (at least 1 GWh per year) in designated sectors. The renewable energy fee will be reduced by around 75–85%, depending on the area of activity, but a minimum rate of €0.5/MWh will be set below which the renewable energy fee may not fall. Energy efficiency requirements must be met to qualify for the discount (energy management system or energy audit with implementation of measures resulting from the audit and follow-up).
A separate de minimis aid scheme will be created, which will make it possible to apply for a reduction of the fee under less strict conditions and may not overlap with a state aid scheme of the same period for the same connection points.
The discount will be applied retroactively from the start of the year for the period specified and the compensation will be paid out to companies via Elering as a one-off refund.
Amendments for companies with intensive gas consumption
In addition, the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act will be amended. The restriction on electricity storage in qualifying as a company with intensive gas consumption will be removed. In order to qualify for the natural gas excise duty relief, the intensity of the company’s annual gas consumption must be 13% or more on average. The preferential excise duty rate is €11.30 per 1000 m3 of natural gas. From now on, a company using storage technologies based on battery solutions that allow the use of electricity for own consumption as a supporting activity (secondary activity) to the production process can also apply for a preferential rate of excise duty on natural gas.
Compensation in balancing markets
The Income Tax Act will be supplemented with provisions on the taxation of income related to participation in balancing markets. As the electricity balancing markets are separate from the electricity exchange, the Income Tax Act specifies that the income earned from participation in the electricity balancing markets in the form of price difference compensation is exempt from income tax. The balancing markets are organised and the compensation is paid by Elering AS.
The provision of the law concerning the tax exemption of income from the sale of electricity to a private individual who is a member of a housing association (for a generating unit with a net capacity of up to 15 kW). Also, the income of a member of a housing association from participation in balancing markets is not subject to income tax. In addition, the current net capacity will be increased from 8 kW to 11 kW per apartment ownership.
The Regulation applies retroactively from 1 January 2026.
The procedure of the Act in the Riigikogu can be found at HERE.
€150 customs duty exemption for small packages in e-commerce to disappear
The European Commission has adopted the decision to abolish the customs duty exemption on goods in parcels of less than €150 imported into the EU from third countries. From 1 July, a fixed customs duty of €3 per item will apply to parcels worth up to €150, irrespective of other circumstances. This means that even if two different items arrive in the same parcel, the customs duty will be calculated separately for each item and €6 will have to be paid. However, if the parcel contains two identical items, the customs duty remains at €3. Thus, once the amendment enters into force, all parcels from third countries will be subject to both VAT and customs duties, regardless of the value of the items in the parcel. The amendment will affect both companies importing or selling goods of third country origin and private individuals ordering such goods directly from outside the EU. The fixed customs duty rate will apply until 1 July 2028, the expected date of entry into force of the next customs-related amendments.
In addition, Member States have the right to apply an additional customs handling fee to partially offset the costs of customs controls.
A summary of the EU customs reform can be found on the website of the tax and Customs Board.
Council Regulation (EU) 2026/382 can be found HERE.
Tallinn Circuit Court clarified the obligation of the tax authority to substantiate a request for information in tax proceedings
The Tallinn Circuit Court made a decision in Case No 3-23-1449, which concerned the rights and obligations of the Tax and Customs Board (MTA) in tax proceedings. On the basis of the information submitted to the Commercial Register, the MTA started a review of the company’s TSD Annex 7 to verify the legality of the tax exempt payments. In the course of the procedure, the MTA also requested information and documents related to the company’s economic activities.
The complainant argued that the MTA did not adequately justify the relevance of the requested information to the tax procedure, and that the scope of the tax inspection should have been changed in advance, if necessary, to request more extensive information.
The Circuit Court agreed with the complainant. The Court clarified that the person subject to the inspection must be informed of the change in the scope of the tax inspection in the same way as when the inspection is initiated. Also, if the link is not obvious from the nature of the information, the MTA must explain how the requested information is linked to the tax procedure. As the link could not be verified on the basis of the explanations provided by the MTA, the Court could not conclude that the request for information was legitimate.
The judgment can be found HERE.
