Estonia
Top Income Tax
20%
Marginal rate
Corporate Tax
20%
Standard rate
VAT / Sales Tax
22%
Standard rate
Capital Gains
20%
Standard rate
Overview
Estonia is a digital-first nation famous for its e-Residency program and 0% tax on retained corporate profits. The flat 20% income tax and advanced digital infrastructure make it ideal for startups and tech entrepreneurs. Tallinn has a growing startup scene.
Income Tax Brackets
| Income Range (EUR) | Tax Rate |
|---|---|
| 0+ | 20% |
Flat 20% rate. Basic exemption up to 7,848 EUR/year (phases out above 14,400 EUR).
Corporate Tax
Standard Rate
20%
0% on retained/reinvested profits. 20% only when profits are distributed. 14% on regular dividends.
VAT / Sales Tax
Standard Rate
22%
Reduced Rates
9%
9% on accommodation, books, periodicals, some medical equipment.
Capital Gains Tax
Standard Rate
20%
Taxed as regular income at 20% flat rate.
Social Security Contributions
Employee
1.6%
Employer
33.8%
Self-Employed
33.8%
Employer bears bulk of social tax (33%). Employee pays 1.6% unemployment insurance.
Special Tax Regimes
e-Residency
Digital identity for non-residents to start and manage an EU company online. Does not provide tax residency.
Eligibility: Anyone can apply. Does not grant right to live in Estonia or EU.
0% Corporate Tax on Retained Profits
Companies pay no tax on reinvested profits. Only distributed profits are taxed at 20% (14% for regular distributions).
Eligibility: All Estonian-registered companies.
Digital Nomad Visa
Digital Nomad Visa for remote workers. Must earn at least 3,504 EUR/month gross. Valid up to 1 year.
Pros & Cons
Pros
- 0% corporate tax on retained profits
- e-Residency program
- Flat 20% income tax
- Advanced digital infrastructure
- Digital nomad visa
Cons
- High employer social contributions (33.8%)
- Small domestic market
- Cold climate
- VAT recently increased to 22%
Living Indicators
Cost of Living Index
Moderate
Quality of Life Index
Good
Best For
Data Sources
Tax rate data for Estonia is compiled from the following authoritative sources:
- OECD Tax Database
- Tax Foundation International Tax Competitiveness Index
- World Bank Business Enabling Environment
- Estonia government tax authority publications
- PwC Worldwide Tax Summaries
Last verified: 2024-01
Disclaimer: This content is for informational purposes only and does not constitute tax advice. Tax laws change frequently. Always consult a qualified tax professional before making decisions about your tax residency or obligations.