The Estonian tax system is made up of state and local taxes. A tax is a monetary obligation imposed on the taxpayer, which is subject to performance pursuant to the procedure, in the amount and within the terms prescribed by law. Taxpayers are required to pay only such state and local taxes as are prescribed by law.
State taxes are received in the state budget. A part of personal income tax and land tax in full amount is received in the budgets of local governments. Local taxes are received in the budgets of local governments.
State taxes:
- income tax
- social tax
- land tax
- gambling tax
- value added tax
- customs duty
- excise duties
- heavy goods vehicle tax
- business income tax
- motor vehicle tax
Local taxes are established by a regulation of the rural municipality or city council in accordance with the terms and conditions laid down in the Local Taxes Act.
Local taxes:
- advertisement tax
- road and street closure tax
- animal tax
- entertainment tax
- parking charge.
More information on local taxes is available on the website of the Tax and Customs Board: tax regulations issued by rural municipalities and city councils (in Estonian).
Taxes
Income tax is payable by resident natural persons on their entire income irrespective of the place (country) where the income was earned. The period of taxation is the calendar year. The income tax rate is 22%.
In 2025, the amount of the basic exemption is up to 654 euros per month and up to 7,848 euros per year.
If the individual is of the pensionable age or attains the pensionable age in 2025, their basic exception is 776 euros per month and 9,312 euros per year.
If a person wishes that the basic exemption during the calendar year would be taken into account in calculation of the income tax withheld from his/her wages or other income, he/she must submit a relevant application to the payer in writing and in free form. The basic exemption can simultaneously be (during the same month) taken into consideration only at one payer (for example, the employer). The Social Insurance Board is an exception, alongside which another paying authority (such as the employer) may also simultaneously apply the basic exemption.
More information is available on the website of the Tax and Customs Board: Calculation of basic exemption Income tax.
Social tax is paid for the purpose of receiving the income necessary for state pension and health insurance from the payments made during employment and service relationships, payments made to the member of the management or control body of a legal person, payments made to a natural person on the basis of a contract under the law of obligations entered into for the provision of a service, also from fringe benefits and the income tax paid on them. In the aforementioned cases, social tax is paid by the payer, and the period of taxation is a calendar month. In general, social tax is paid at the rate of 33% on wages actually paid, but for each employee, social tax is payable on at least the monthly threshold established by the state budget. In 2025, the monthly rate on which the minimum social tax liability is based is 820 euros.
More information is available on the website of the Tax and Customs Board: Social tax.
Land tax is a national tax received in full amount in the budget of the local government where the land is located. The amount of land tax is calculated by multiplying the taxable value of the land by the land tax rate. The whole land is subject to land tax. Land tax is paid by the owner of the land and in certain cases also by the user of the land.
Land tax notices, data related to the plots of land, the tax calculation process and due date(s) for the payment of land tax and the amount(s) payable are displayed in the e-MTA e-services environment by choosing Taxes – Land tax – Land tax notices and land data after logging in.
Read more about land tax on the homepage of the Estonian Tax and Customs Board: Land tax.
Heavy goods vehicle tax is imposed on a truck and a road train with a maximum permissible mass of 12 tons or more intended for the transport of goods. The taxable period for heavy goods vehicles tax is a quarter. A truck or a road train (heavy vehicle) is subject to a tax depending on the maximum permissible mass or the maximum mass, number of axes and type of the suspension of driving axle. The heavy goods vehicles tax is not imposed on heavy vehicles of the Defence Forces and the National Defence League, police authorities and rescue service agencies, and heavy vehicles of local governments, non-profit associations, foundations or economic operators that are engaged in rescue work and use the vehicles mainly for rescue work.
Since 01.07.2025, the standard rate of value added tax is 24%.
- The VAT rate for some goods and services (e.g. books, medicines, aids for the disabled, both paper and electronic press publications) is 9%. The exact list is in § 15, paragraph 2 of the VAT Act.
- The VAT rate for accommodation services is 13% from 01.01.2025.
- The list of goods and services taxed at a VAT rate of 0% is in § 15, paragraphs 3 and 4 of the VAT Act.
- The list of tax-exempt goods and services is in § 16 of the VAT Act.
More information is available on the website of the Tax and Customs Board: Heavy goods vehicle tax.
Customs duty is a state tax imposed by European Union legislation that a person or company must pay when goods are imported from third countries to the European Union (import duty) or exported to third countries from the European Union (export duty). In the European Union, there are no import or export duties or any similar taxes between the Member States and common customs tariffs are adopted in relatons with third countries. Read more about customs duty on the homepage of the Estonian Tax and Customs Board.
More information is available on the website of the Tax and Customs Board: Customs duty.
Gambling tax is paid by organisers of gambling. The period of taxation with gambling tax is the calendar month. In the event of organising a tournament of a game of chance, the period of taxation is the period during which one tournament of a game of chance is organised, starting on the first day of accepting the participation fees set out in the rules of tournament of the game of chance and ending on the day when the acceptance of participation fees set out in the rules of tournament of the game of chance is terminated. In the event of organising a commercial lottery, the period of taxation is the period during which the commercial lottery is organised, starting on the first day set out in the rules of the game for placing bets and ending on the final day for distributing winnings as set out in the rules of the game.
More information is available on the website of the Tax and Customs Board: Gambling tax.
Excise duties in Estonia are imposed on alcohol, tobacco products, fuel, electric energy, and packaging. Excise duties are mainly regulated by the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (ATKEAS) and the Packaging Excise Duty Act.
More information is available on the website of the Tax and Customs Board: Excise duties.
References
- Tax incentives
- Requisites for payment of taxes
- Tax rates
- National minimum wage rates
- Practical guide to doing business in Europe