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In this article, we will provide a comprehensive overview of all the major tax rates, including income tax, VAT, social tax, and other important tax laws that will be in effect in 2024. Feelfin Financial Advisory and Accounting Firm can help you navigate the complexities of these changes by providing expert advice and support.
Income tax rate
Income tax withholding rate in Estonia in 2024 20%. This means that for every euro earned, 20% income tax must be paid to the state. The withholding of income tax is carried out automatically by the employer.
Since 2024, the general VAT rate in Estonia has increased 22%Previously, it was 20%.
Turnover taxable at a VAT rate of 9%:At this rate, for example, books, educational literature and accommodation or accommodation with breakfast are taxed.
Turnover taxable at a VAT rate of 5%:This includes journalistic publications.
Amount of tax-free income
The amount of tax-free income depends on the person's income. Per month, tax-free income can be up to 654 eurosand annually up to 7848 euros. In order for tax-free income to apply, the payee must submit a written statement.
Tax-free income at retirement age
At retirement age, tax-free income is a fixed amount that does not depend on the amount of income. In 2024, it will be 776 euros per month and 9312 euros per year. The Social Security Board counts tax-free income into a person's old-age pension and, if necessary, the employer can apply the unused surplus to wages or other income.
Promoting the health of the employee
Expenditures to promote employee health are tax-free up to 100 europer quarter for each employee. This includes health promotion programs and services designed to improve the well-being of employees.
Corporate income tax
Regular dividends:Regularly paid dividends are subject to the 14/86 rate. In addition, a 7% income tax must be withheld on dividends paid to a natural person.
Non-regular dividends:The corporate income tax rate is 20/80.
Social tax rate
In 2024, the social tax rate will still be 33%. The minimum social tax liability is based on a minimum monthly rate, which is 725 euros per month(In 2023 it was 654 euros). Thus, there is a minimum social tax liability 239.25 euros per month.
Employee and employer rates
Workerthe unemployment insurance premium rate is1.6%.
Employerthe unemployment insurance premium rate is 0.8%.
Unemployment insurance for workers at retirement age
The obligation to withhold an employee's unemployment insurance premium ends on the last day of the month the employee reaches retirement age or the month in which the early or flexible old-age pension is assigned. However, the employer must continue to pay unemployment insurance premiums at a rate of 0.8%.
Increase in the contribution rate of the savings pension
From January 2024, those who have joined Pillar II can apply to raise their 2% the rate of payment of the savings pension 4%to or 6%-him. The application must be submitted to the pension register keeper or account manager between 01.01.2024 and 30.11.2024 and the new payment rate will be valid from January 1, 2025.
Estonia will have several important tax rates in place in 2024, which will affect both companies and individuals. It is important to be aware of these changes in order to plan your financial liabilities and tax strategies accordingly. Feelfin Financial Advisory and Accounting Firm is always ready to provide expert assistance and advice to help you understand tax rates in your day-to-day operations.