Estonia: all programs

The main 2026 rates: personal income tax - a flat 22% with a tax-free allowance of €700 a month; corporate tax - 0% on undistributed profit and 22/78 when dividends are paid out; VAT - 24%; social tax - 33% (paid by the employer). There is no wealth tax and no inheritance tax, and instead of a property tax there is a land tax.

The personal income tax rate is 22% and the scale is flat, with no brackets. The increase to 24% planned for 2026 was cancelled in December 2025. From 2026 every resident, whatever their income, gets a single tax-free allowance of €8,400 a year.

Yes, Estonian tax residents pay tax on their entire worldwide income - salary, dividends, rent and capital gains from any country. Double taxation is relieved through tax treaties (Estonia has more than 60): usually by crediting the tax paid abroad, while foreign salary and dividends that have already been taxed can be exempt. Non-residents pay only on Estonian-source income.

A non-resident is taxed only on Estonian income: 22% on salary for work physically performed in Estonia, 22% on rental income from and the sale of local property, and 10% on royalties. Dividends from an Estonian company are not taxed in the recipient's hands - the company already paid the tax on distribution. Remote work for an Estonian firm from abroad is normally not subject to Estonian income tax.

Only while the profit is not distributed: reinvested profit is not taxed at all. When dividends are paid out, the company pays 22/78 of the net amount - effectively the same 22% of gross profit. The reduced 14/86 rate for regular dividends was abolished in 2025.

It is enough to spend 183 days in the country during any 12 consecutive months (a rolling window, not a calendar year) or to have a permanent home in Estonia. A change of status is reported on form R to the tax board EMTA. Note that e-Residency does not give tax residency - it is only a digital ID for business.