People of pensionable age have different rules for the calculation of the basic exception, regardless of whether they receive a pension or not. More information is available on the website of the Tax and Customs Board: Basic exemption at pensionable age
Otherwise, there are no differences in declaring income or paying taxes for people of pensionable age. In the case of pensions received from another country, an income tax declaration must be made in Estonia declaring also the foreign pension, even if the pension has already been taxed in the foreign country.
Double taxation is avoided in accordance with the rules in the conventions for the avoidance of double taxation (if any; hereinafter ‘tax conventions’).
Tax conventions determine whether the other country is entitled to apply their domestic law on the taxation of the pension.
Depending on the state, pensions may be taxable in only one state – in a state where the pension is paid or a state where the pensioner is a resident – or in two states. In the latter case, double taxation is avoided in the home state.
As the pension may be obtained through statutory or mandatory social security or through a voluntary funded pension, different taxation rules may apply, depending on the type of pension. More information is available in the tax conventions and from the Tax and Customs Board
The table on the website of the Tax and Customs Board helps to understand which pension-related payments are tax-free and which payments are taxed.
Receiving a foreign pension in Estonia
For example, if a pensioner residing in Estonia receives a pension from Norway, only Estonia has the right to tax the Norwegian pension. If income tax is withheld in Norway, the income tax withheld in Norway is not taken into account in Estonia. A certificate of residence in Estonia for tax purposes must be submitted to Norway and a tax refund application is made to the Norwegian tax authority. That is also the case for Latvian pensions.
If income tax on the Finnish social security pension of a pensioner residing in Estonia has been paid in Finland, the pension must be declared in Estonia. Even though they are not taxed in Estonia, Finnish pensions are taken into account to calculate tax exemptions for the purposes of taxing an Estonian pension or other income.
If a pensioner residing in Estonia receives a pension from Sweden, the pension is taxed in Sweden and the amount of the Swedish income tax is taken into account when paying income tax in Estonia.
Income tax paid or withheld abroad may be deducted from the income tax payable in Estonia only if the taxpayer is in possession of a certificate from a foreign tax authority or a withholding agent attesting to the payment of income tax or other tax equivalent to income tax.
Receiving an Estonian pension abroad
If a person lives outside Estonia and receives an Estonian pension, the pension is subject to income tax in Estonia (22%).
By way of derogation, the pension is not taxed in Estonia if you live in Austria, Belarus, Croatia, the Czech Republic, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Moldova, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Switzerland, or Ukraine. The list of states may be updated.
If you live in one of these states, you must annually provide a certificate of residency for tax purposes from the tax authorities of the state of residence. If you have a valid certificate of residency for tax purposes, the Estonian pension is paid in full and it is taxed in the state of residence. If the certificate of residency does not exist or has expired, the pension is subject to 22% income tax in Estonia.
If a person receiving a pension from Estonia resides in another state which is a contracting party to the EEA Agreement and the tax conventions do not include any tax exemption for Estonian pensions in Estonia, it is possible to apply the Estonian tax exemption, provided there is a residency certificate verified by a foreign tax authority. More specific rules are available on the website of the Tax and Customs Board: Calculation of basic exemption.
More information is available on the website of the Tax and Customs Board:
Deductions from a non-resident’s income taxable in Estonia
Declaration of income
Refund of income tax
More information on applying for pension from a foreign state and payment of pension to a foreign state is available on the website of the Social Insurance Board.
Submitting an income tax return
You can submit your income tax return from 15 February of the year following the taxable period:
- in the Tax and Customs Board’s e-services environment e-MTA, where you need to identify yourself for signing in by using an ID-card, Mobile-ID, Smart-ID or EU eID
- in the service bureaus of the Tax and Customs Board
- by mail at Lõõtsa 8a, 15176 Tallinn.
We recommend that you submit your tax return in the e-services environment, if possible, because there can be long queues at the service bureaus, especially at the beginning of the income tax return submission period.
Appeals
If you consider that your rights or freedoms have been violated by an administrative act or measure of a tax authority, you can contest the decision, or file an appeal in the courts.
The appeal must be filed in Estonian and in writing at the Estonian Tax and Customs Board:
- by email: [email protected];
- by post: Lõõtsa 8a, 15176 Tallinn.
An appeal against an administrative act must be filed within 30 days of the date of notification or delivery of the administrative act, and an appeal against a measure must be filed within 30 days of the date on which the person appealing becomes or should have become aware of the measure. If the period for filing an appeal is not complied with, the tax authority may, on duly justified grounds, reinstate the period not complied with on application by the party concerned.
More information on appealing administrative acts can be found on the Tax and Customs Board’s website.
Where to find information and help
Read more about calculating the basic exemption on pensions here.
With pension taxation questions, contact the Tax and Customs Board:
Customer Support of the Tax and Customs Board
Forms
References
- About tax incentives
- Information about filing income tax returns for employees from abroad working in Estonia
- Receiving pension from a foreign state and payment of pension to a foreign state
- Taxation of Pensions if You Live Abroad
- Requisites for payment of taxes
- Information phones and e-mails of the Tax and Customs Board
- Customer service office of the Social Insurance Board