1. Tax hikes for personal income tax (PIT), corporate income tax (CIT) and value-added tax (VAT) in 2025
From 01.01.2025 both PIT and CIT will increase by 2 percentage points, VAT will do the same from 01.07.2025.
| Tax | Currently | From 01.01.2025 |
| Personal income tax | 20% | 22% |
| Corporate income tax | 20/80 | 22/78 |
| From 01.07.2025 | ||
| Value-added tax | 22% | 24% |
2. National security tax introduced as of 01.01.2026
A 2% national security tax will be levied on the income of private individuals and corporate profits of legal entities from 01.01.2026 – 31.12.2028 in order to collect additional tax revenue for the development of Estonia’s defence capability and for security investments.
2% tax on income of private individuals:
– tax basis encompasses both income subject to income tax and beyond (e.g. dividends, salary from abroad, pension fund payouts)
– applies to gross income (except for capital gain from transfer of property and income of solo proprietors, where acquisition cost/related expenses are deducted)
– withholding applies similarly to income tax
2% tax on corporate profits:
– The tax base is the previous fiscal year’s accounting profit before income tax. The tax is paid in advance quarterly (March 10, June 10, September 10, December 10) and finalised after submitting the fiscal year’s report (September 10 of the following year, i.e final tax liability for the fiscal year of 2026, is determined in accordance with tax return to be submitted on September 10, 2027)
– No tax adjustments (profit calculated according to financial reporting standards)
– Dividends and profit allocated to the foreign permanent establishments are exempt
3. Motor Vehicle Tax introduced as of 01.01.2025
A new annual tax on motor vehicles will start to apply from January 1, 2025 – tax calculator available here: https://avalik.emta.ee/mootorsoidukimaks/calc.
Further to the yearly tax, ownership changes as of January 1, 2025 will bear a one-time registration fee (both newly imported vehicles and domestic vehicles sold after this date).
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Our dedicated team of accounting professionals and tax advisors is at Your disposal for any further assistance on the above and specific questions You may have. Do not hesitate to give us a call or send us an email.
Primary contact person:
Margus Jõemaa
Head of Tax Services
+ 372 5170 465
F. R. Faehlmanni 5, Tallinn 10125, Estonia www.financeplus.ee margus@financeplus.ee