Tax rates in Estonia

Income tax rate:

Income of the year 2012 – 21%
Income of the year 2011 – 21%
Income of the year 2010 – 21%
Income of the year 2009 – 21%
Income of the year 2008 – 21%
Income of the year 2007 – 22%
Income of the year 2006 – 23%
Income of the year 2005 – 24%
From the year 2000 until 2004 – 26%

Period of taxation for natural persons is a calendar year.

In Estonia, annual basic exemption (non-taxable amount) per year is:

Income of the year 2012 – 1728 EUR
Income of the year 2011 – 1728 EUR
Income of the year 2010 – 27 000 EEK
Income of the year 2009 – 27 000 EEK
Income of the year 2008 – 27 000 EEK
Income of the year 2007 – 24 000 EEK
Income of the year 2006 – 24 000 EEK
Income of the year 2005 – 20 400 EEK
Income of the year 2004 – 16 800 EEK
Income of the year 2003 – 12 000 EEK
Income of the year 2002 – 12 000 EEK
Income of the year 2001 – 12 000 EEK
Income of the year 2000 – 9600 EEK

The moment of corporate income taxation is shifted until the distribution of profits in Estonia. Period of taxation for legal entities and non-residents with permanent establishments in Estonia is one calendar month.

Corporate income tax rate in Estonia:
Distribution in the year 2012 – 21/79
Distribution in the year 2011 – 21/79
Distribution in the year 2010 – 21/79
Distribution in the year 2009 – 21/79
Distribution in the year 2008 – 21/79
Distribution in the year 2007 – 22/78
Distribution in the year 2006 – 23/77
Distribution in the year 2005 – 24/76

From the year 2000 until 2004 – 26/74 of the net amount (equals to 26% of gross profit)

…of the net amount.

Unemployment insurance premiums

In 2012, an unemployment insurance premium withheld is 2,8% of the gross salary of an employee.

In addition to this, employers pay the unemployment insurance premium at a rate of 1,4% of the amount of gross salaries monthly.

These rates have been applicable from 1 August 2009.

From 1 June 2009 until 31 July 2009, an unemployment insurance premium was withheld at a rate of 2%, employers paid the unemployment insurance premium at a rate of 1%.

Until 31 May 2009, an unemployment insurance premium has been withheld at a rate of 0,6%, employers rate has been 0,3%.

Funded pension payment

In 2012, a rate of a funded pension payment is 2% of the gross salary of a resident employee.

In 2011, a rate of a funded pension payment depended on the employee´s decision in 2010. If an employee had decided to continue making payments in 2010, funded pension payments were withheld at a rate of 2% in 2011. In all other cases, funded pension payments were withheld at a rate of 1% of the gross salary of the resident employee in 2011.

From 1 January 2010 until 31 December 2010, a funded pension payment was withheld only if an employee had submitted an application for continuation of making payments in 2010.

Funded pension payments were not withheld from payments made from 1 June 2009 until 31 December 2009.

You can find further information about the Estonian system of pension payments on the website of AS Eesti Väärtpaberikeskus (Estonian CSD) http://www.pensionikeskus.ee/.

http://www.emta.ee/index.php?id=3274
December 2011