InfoCourier October 2026

Amendments to the Funded Pensions Act and the Taxation Act

Amendments to the Funded Pensions Act and the Taxation Act
On 30 September 2026, the Riigikogu adopted amendments to the Funded Pensions Act and the Taxation Act to make using the second pension pillar more flexible and give people greater freedom in how they use their pension assets.

The most significant changes are as follows:

For a person who has previously left the second pension pillar or withdrawn their pension assets from it, the waiting period for rejoining the second pillar will be reduced from the current 10 years to 5 years.
The right to withdraw pension assets before reaching retirement age may be exercised only once, instead of twice as previously.
The options for withdrawing pension assets will be expanded to include partial withdrawals in addition to full withdrawals. After making a partial withdrawal from the pension account, new contributions can be made after 5 years have passed.
Holders of pension investment accounts can withdraw part of the funds in their account or a corresponding portion of their pension assets.
The conditions for making withdrawals from pension assets in the case of financial assets acquired through a pension investment account have been clarified.

The amendments will enter into force on 1 November 2026. Changes to the rules governing partial withdrawals from the second pillar will come into force on 1 January 2028.

More information on the legislative proceedings of the Act in the Riigikogu is available HERE.

Amendments to the Social Tax Act

On 20 May 2026, the Riigikogu adopted the Act Amending the Social Tax Act and Other Related Acts, which aims to reduce the administrative burden associated with the taxation of service contracts between natural persons, increase the legal clarity of tax rules and improve tax compliance. In addition, the tax obligations of foreign workers employed in Estonia on a short-term basis and their employers will be simplified.

The most significant changes are as follows:

In the case of contracts for services, authorisation agreements or other service contracts concluded between natural persons, the obligation to pay social tax and social insurance contributions will be transferred from the payer of the service fee to the service provider.
The payer of the service fee will no longer be required to submit a declaration of income and social tax, unemployment insurance premiums and contributions to the mandatory funded pension (form TSD) in respect of such payments or to register the service provider in the employment register.
The recipients of service fees will be subject to the principles governing the taxation of business income earned by self-employed persons, which will harmonise the tax treatment of different forms of work.
Remuneration paid by a non-resident employer to a non-resident employee for the first 183 days of employment in Estonia will be exempt from social tax, provided that the employee has health insurance covering medical expenses arising from illness or injury whilst in Estonia. The exemption will not apply to employers from a country within the European Economic Area (EEA), Switzerland or a country that has concluded a social security agreement with Estonia, nor will it apply where the remuneration is paid through or borne by a permanent establishment located in such a country, or where the remuneration is paid to a non-resident for temporary agency work.

The amendments will enter into force on 1 January 2027.

More information on the legislative proceedings of the Act in the Riigikogu is available HERE

E-commerce consignments will be subject to a customs handling fee from 1 November

From 1 November 2026, a customs handling fee of 2 euros per item will apply to goods imported from third countries through distance sales.. Distance sales are defined as sales from a trader to a final consumer (B2C) where goods are dispatched from a third country to a person who is not registered for VAT, and the goods are dispatched or their export from the third country is arranged, directly or indirectly, by the seller. The handling fee will apply regardless of the value of the consignment.

The legal basis for the customs handling fee is Article 20 of Regulation (EU) 2026/2108 establishing the Union Customs Code. The purpose of the fee is to partially cover the costs associated with the supervision of customs authorities, including the costs of services provided by the EU Customs Authority established by the Regulation.

The amount of the Union handling fee is laid down in Commission Delegated Regulation (EU) 2026/2152 and it is 2 euros per item.

The customs handling fee will be applied in addition to the fixed customs duty of 3 euros per item that has applied since 1 July 2026 to goods in packages valued at 150 euros or less. Both the 3-euro customs duty and the 2-euro handling fee will be charged per item. If a consignment contains several items of the same product, the total customs duty and handling fee payable for the consignment will be 5 euros, regardless of the number of items. If a consignment contains items of different products, the customs duty and the handling fee will apply separately to each item.

The person liable to pay the customs handling fee will, as a general rule, be the same person who is liable for the customs debt when the goods are released for free circulation. An importer of goods is either the person supplying goods through distance sales or the person facilitating distance sales into the EU.

According to the European Commission’s guidance, the handling fee should be part of the VAT taxable amount as it amounts to an incidental expense to the supply.

Amendments to the Occupational Health and Safety Act and other related acts

On 30 September 2026, the Riigikogu adopted amendments to the Occupational Health and Safety Act, which modify and clarify a number of employers’ obligations relating to occupational safety.

Under the adopted act, statutory sickness benefit and voluntary incapacity for work benefit paid to a management board member will not be subject to social tax. The tax exemption will apply provided that the benefits meet the requirements set out in the Occupational Health and Safety Act.

The amendments will also reduce the administrative burden on employers in certain cases. Most occupational health and safety requirements will no longer apply to a private limited company whose sole shareholder is also its sole management board member and employee. Similarly, there will be no need to appoint a first-aid provider if employees work alone or if employers operating in a shared working environment agree on a joint first-aid arrangement.

In future, clear rules will govern the testing of employees for intoxication. As a general rule, an employer may test an employee where there are reasonable grounds to suspect intoxication. In jobs involving higher risks or in hazardous working environments, testing may also be carried out without such grounds. The employer must establish a written procedure for intoxication testing and introduce it to all employees. The procedure must specify, among other things, how testing is to be carried out, the consequences of a positive test result or refusal to undergo testing, and the options for challenging the result. Data relating to intoxication tests may be retained for up to three years from the date of the test.

An amendment to the Working Conditions of Employees Posted to Estonia Act exempts employers in the retail and wholesale trade sectors and the financial and insurance sectors from the obligation to submit information about posted employees to the Labour Inspectorate.

An amendment to the Taxation Act will also empower the Labour Inspectorate to check compliance with the obligation to register employment when monitoring compliance with employment contract and occupational health and safety requirements.

Most of the amendments set out in the Act will enter into force on 26 October 2026.
You can find out more about the amendments HERE.

The list of non-cooperative jurisdictions for tax purposes has been updated

On 9 October, the Council of the European Union updated the list of non-cooperative jurisdictions for tax purposes. The list includes countries which have not engaged in constructive dialogue with the EU on tax governance or have failed to deliver on their commitments to implement the necessary reforms.

The list now includes eight jurisdictions: American Samoa; Anguilla; Guam; Palau; Russia; Turks and Caicos Islands; the US Virgin Islands; and Vanuatu. Before the update, Panama and Viet Nam were also on the list.

Read more on the European Council’s homepage HERE.