Estonia: Proposed expansion of scope of security tax and increased VAT rate, amendments to taxation of income earned through business accounts
The Parliament has commenced consideration of two packages of tax-related draft legislation.
The Parliament (Riigikogu) has commenced consideration of the draft Security Tax Act, under which beginning in 2026, the 2% security tax would be imposed on:
- Income of resident and nonresident natural persons
- Income received in a business account
- Profits of resident companies and profits attributed to nonresident companies’ permanent establishments located in Estonia
The Security Tax Act would also temporarily increase the standard value added tax (VAT) rate to 24% (from 20%) beginning July 1, 2025, until December 31, 2028.
In addition, the Parliament has initiated consideration of proposed amendments to the taxation of income earned through a business account which would become effective January 1, 2025.
Read an October 2024 report prepared by the KPMG member firm in Estonia