Income tax return and tax refund in Estonia

Who has to file a tax return, and by when?

A natural person files a return on the income received in the taxation period „hiljemalt maksustamisperioodile järgneva aasta 30. aprilliks“ (TuMS § 44 lg 1) [2] (translation: by 30 April of the year following the taxation period at the latest). Through the Tax and Customs Board's e-service, the return can be filed from 15 February of the year following the taxation period (TuMS § 44 lg 1) [2].

A resident natural person whose income did not exceed the basic exemption, or who does not have to pay any additional income tax on their income, does not have to file a return (TuMS § 44 lg 6 p 1) [2]. Regardless of this, the following must file a return, for example:

• a sole proprietor (füüsilisest isikust ettevõtja, FIE) (TuMS § 44 lg 6¹ p 1) [2];
• a person who made payments into or out of an investment account during the year (TuMS § 44 lg 6¹ p 2) [2];
• a person who received income that is not taxed in Estonia under an international agreement or an exception named in the Act – such income must be declared (TuMS § 44 lg 1³ and lg 6¹ p 3) [2].

If you own an apartment, immovable property or a related right of superficies in Estonia, or you are a member of a building association (hooneühistu), you confirm in the return whether or not you received rental income during the year (TuMS § 44 lg 1⁴) [2]. If you were not resident for the whole year, you declare only the income received while you were resident; the basic exemption and the 1200-euro limit on deductions are applied in proportion to the months you were resident (TuMS § 44 lg 1²) [2].

What can be deducted from income?

Income tax is charged on income from which the deductions permitted by law have been made (TuMS § 1 lg 1) [5]; the income tax rate is 22% (TuMS § 4 lg 1) [6].

• Basic exemption. A basic exemption of 8400 euros is deducted from the income of a resident natural person (TuMS § 23 lg 1) [7]. From the year in which a person reaches pensionable age, the basic exemption is 9312 euros (TuMS § 23⁵ lg 1) [8].
• Training expenses. You may deduct the training expenses of yourself and of your descendant, brother or sister under 26 years of age; if there are none, the training expenses of one permanent resident of Estonia under 26 (TuMS § 26 lg 1) [9]. The expenses must be documented and paid, for example, to an educational institution, private kindergarten or private school holding an activity licence, or to an equivalent foreign educational institution (TuMS § 26 lg 2) [9]. Fees for category B driver training and several other driving categories are not training expenses (TuMS § 26 lg 2²) [9].
• Gifts and donations. You may deduct documented gifts and donations to an association entered in the list of associations with income tax incentives (TuMS § 27 lg 1) [10]; the list is approved by the Tax and Customs Board (TuMS § 11 lg 1) [11]. A service provided free of charge is not deducted as a donation (TuMS § 27 lg 4) [10].
• Voluntary pension fund. Amounts paid to acquire units of a voluntary pension fund can be deducted (TuMS § 28 lg 1 p 2) [12] up to 15% of the income taxable in Estonia, but not more than 6000 euros; if your employer has also paid such amounts for you, the limits are reduced by the untaxed amounts the employer paid (TuMS § 28 lg 2) [12].
• Mandatory contributions. Mandatory funded pension contributions and unemployment insurance premiums are deducted from income (TuMS § 28¹ lg 1 and 2) [13].

Training expenses and gifts and donations together can be deducted up to 1200 euros, but not more than 50% of the income taxable in Estonia (TuMS § 28² lg 1) [3].

Can spouses share deductions?

A resident taxpayer who was married or in a registered partnership on the last day of the year may make training expense deductions in their own return, taking the limit on deductions into account (TuMS § 44 lg 2¹) [2]. If training expenses exceed the limits, the unused part may be deducted by the spouse or registered partner if their property regime was joint ownership (TuMS § 28² lg 1¹) [3].

Can housing loan interest still be deducted?

The deduction of housing loan interest was governed by § 25 of the Income Tax Act, which was in force until 1 January 2024 and has been repealed (TuMS § 61 lg 71) [14]. The Act in force contains no such deduction, and the limit on deductions from income now covers only training expenses and gifts and donations (TuMS § 28² lg 1) [3]. Housing loan interest therefore does not currently reduce taxable income.

When is tax refunded, and when must more be paid?

The Tax and Customs Board calculates the amount of tax payable and publishes the tax calculation in the e-maksuamet environment; for a return filed electronically, no tax notice is issued (TuMS § 46 lg 1) [4]. Income tax withheld or paid during the year is deducted from the year's income tax (TuMS § 46 lg 2) [4].

• Refund. Overpaid tax is refunded to the bank account shown in the return and must be refunded by 1 October at the latest (TuMS § 46 lg 6 and lg 3) [4].
• Additional payment. Additional tax must be paid to the Tax and Customs Board's bank account „hiljemalt maksustamisperioodile järgneva kalendriaasta 1. oktoobriks“ (TuMS § 46 lg 3) [4] (translation: by 1 October of the calendar year following the taxation period at the latest). If the tax is not paid on time, interest must be paid under the Taxation Act (maksukorralduse seadus, MKS) (MKS § 115 lg 1) [15], at a rate of 0.06 per cent per day (MKS § 117 lg 1) [16].

What the law says

• „Maksu- ja Tolliameti e-teenuse vahendusel on tuludeklaratsiooni võimalik esitada alates maksustamisperioodile järgneva aasta 15. veebruarist.“ (TuMS § 44 lg 1) [2] – the filing period starts on 15 February.
• „Maksumaksja on eeltäidetud tuludeklaratsiooni kasutamisel kohustatud kontrollima selles toodud andmete õigsust“ (TuMS § 44 lg 1¹) [2] – you must check the pre-filled data yourself and correct it if it is wrong or incomplete.
• „Paragrahvides 26 ja 27 sätestatud mahaarvamisi võib maksustamisperioodil teha kokku kuni 1200 eurot maksumaksja kohta“ (TuMS § 28² lg 1) [3] – the joint ceiling for training expenses and donations.
• „Tasuta või turuhinnast madalama hinnaga osutatud teenust ei käsitata kingituse ega annetusena“ (TuMS § 27 lg 4) [10] – voluntary work cannot be deducted as a donation.
• „Enammakstud maksusumma tuleb tagastada hiljemalt lõikes 3 sätestatud tähtpäevaks.“ (TuMS § 46 lg 6) [4] – the last day for the refund is 1 October.

What to do

1. Open the pre-filled return in the Tax and Customs Board's e-service; it is available from 15 February (TuMS § 44 lg 1¹) [2].
2. Check the income and deductions, and correct or complete any incomplete data (TuMS § 44 lg 1¹) [2].
3. Add any missing training expenses and donations for which you have documents (TuMS § 26 lg 2; TuMS § 27 lg 1) [9] [10], and check that they stay within the 1200-euro limit (TuMS § 28² lg 1) [3].
4. Enter the correct bank account in the return for the refund of overpaid tax (TuMS § 46 lg 6) [4].
5. File the return by 30 April at the latest (TuMS § 44 lg 1) [2] and pay any additional tax by 1 October at the latest (TuMS § 46 lg 3) [4].

Frequently asked questions

Do I have to file a return if I only have a salary?

If your income did not exceed the basic exemption, or you do not have to pay any additional income tax, you do not have to file a return (TuMS § 44 lg 6 p 1) [2]. Overpaid tax, however, is refunded to the bank account shown in the return (TuMS § 46 lg 6) [4].

Can I deduct my child's hobby school fees?

Fees paid for studying at a hobby school (huvikool) are training expenses if the learner was under 18 on 1 January of the year in which the fee was paid; if on turning 18 the learner is studying at a basic school, upper secondary school or vocational institution, the fees remain training expenses until that study ends (TuMS § 26 lg 2²) [9].

Can I deduct driving school fees?

No. Fees for driver training in categories AM, A and B and subcategories A1, A2 and B1 are not training expenses (TuMS § 26 lg 2²) [9].

Can a donation be made in kind?

Yes, a gift or donation may be monetary or non-monetary; the value of a non-monetary donation is the market price of the property (TuMS § 27 lg 4) [10].

What happens if I pay the additional tax late?

Interest must be paid on tax not paid by the due date, starting from the day after the due date (MKS § 115 lg 1) [15]; the rate is 0.06 per cent per day (MKS § 117 lg 1) [16].