Estonia: Amendments to taxation of income received in a pension investment account
The purpose of the amendments is to align income taxation with investment account regulation and reduce the risk of double taxation.
Amendments to taxation of income received in a pension investment account
Amendments in the Income Tax Act concerning the taxation of income received in a pension investment account became effective 1 January 2023 and apply retroactively to 2 January 2022. The purpose of the amendments is to align income taxation with investment account regulation and reduce the risk of double taxation.
As a result of the amendments, the following are not subject to income tax:
- Interest received by means of a financial asset acquired with money in a pension investment account or the income of which is based on an investment fund that is taxed or exempt from income tax
- Dividends received from foreign undertakings, received from financial assets acquired by means of money in the pension investment account
- Insurance benefits received in the pension investment account
Income received in a pension investment account is also not considered as income upon the calculation of the minimum individual (personal) income tax allowance.
Read a March 2023 report prepared by the KPMG member firm in Estonia
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