Estonia: Recent tax-related developments, including reporting obligations for digital platform operators (DAC7)

Recent tax-related developments in Estonia

Recent tax-related developments in Estonia

Notable recent tax-related developments in Estonia are described below.

The government proposed to increase the basic income tax exemption for individuals and to extend the tax exemption on donations to Ukraine—effective 1 January 2023.

  • The annual basic exemption for individuals would be increased to €7,848 (from €6,000). The annual income threshold at which the basic exemption would start to decrease would remain the same, i.e., €14,400. An individual whose annual income exceeds €21,200 would not be entitled to a basic exemption, except old-age pensioners, who, beginning 1 January 2023, would be entitled to a monthly basic exemption of €704, regardless of the size of their income.
  • The tax exemption on donations made by Estonian resident legal entities to help preserve Ukraine's territorial integrity and sovereignty and provide humanitarian aid for the Ukrainian people would be extended to 2023. The exemption would apply only to donations to organizations listed in the Income Tax Act. 

The government also proposed measures regarding reporting obligations for digital platform operators under which, beginning 1 January 2023, such operators would be required to collect certain information about sellers and service providers on their platforms and report it to the tax authority, which would then automatically exchange such information with other jurisdictions.

Read a November 2022 report prepared by the KPMG member firm in Estonia

 

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