Tulumaksusüsteemi

Tulumaksusüsteemi refers to a tax system that levies taxes on income. In Estonia, the income tax system is primarily based on a flat tax rate. This means that all individuals and companies pay the same percentage of their income in taxes, regardless of their income level. The current flat tax rate for both personal and corporate income tax in Estonia is 20%.

The Estonian tulumaksusüsteemi is considered relatively simple and efficient. It aims to encourage entrepreneurship and investment by providing a predictable tax environment. There are various exemptions and deductions available, such as for basic expenses, education, and housing loans, which can reduce the taxable income for individuals. For companies, the taxation principle is different from many other countries. Instead of taxing distributed profits, Estonia taxes the profits that a company distributes. Undistributed profits are not subject to corporate income tax, which is intended to encourage reinvestment and business growth.

The administration of the tulumaksusüsteemi is managed by the Estonian Tax and Customs Board. They are responsible for collecting taxes, enforcing tax laws, and providing information to taxpayers. The system is largely based on self-assessment, with taxpayers expected to file their tax returns annually. Digitalization plays a significant role in the Estonian tax system, with most tax-related processes being available online.