58.70° N · 25.30° E
Estonia Tax Guide
EuropeLast verified June 2026Worldwide system
- Top income tax
- 22%
- Capital gains
- 22%
- Corporate
- 22%
- VAT / GST
- 24%
- Residency test
- 183 days
Flat 22% on all income from 2025. The previously legislated jump to 24% in 2026 was cancelled — rate held at 22% to support growth.
In short
- Tallinn is a compact, digital-first capital with excellent e-government, a startup culture and a corporate tax that applies only to distributed profits.
- No newcomer tax regime: the standard rates above apply to new residents.
- Watch out: Winters are long, dark and cold, and the digital nomad visa does not lead to long-term residency.
Verified June 2026 · 3 sources
Recent changes
No changes logged since the last full verification.
Full change logBest for
- EU residency base
EU membership = schengen mobility, free movement across the bloc, and EU regulatory protection.
Personal Income Tax
Residency, rates, foreign income, capital gains, wealth and inheritance, special regimes+
Personal Income Tax
Residency, rates, foreign income, capital gains, wealth and inheritance, special regimesTax Residency
Income Tax Rates
Foreign Income Treatment
Investment Income
22% on capital gains (rate aligned with personal income tax from 2025)
Wealth & Inheritance
Practical Notes
Digital society. e-Residency program popular for location-independent entrepreneurs. Originally-planned 2% security tax (Julgeolekumaks) on individuals was scrapped before taking effect; corporate side limited to a one-time profit-distribution surcharge being phased out.
Business & Corporate Tax
Corporate rate, withholding, VAT, substance, Pillar Two and treaties+
Business & Corporate Tax
Corporate rate, withholding, VAT, substance, Pillar Two and treatiesCorporate Income Tax
Withholding Taxes
VAT / GST
Compliance & Substance
Notable Regimes
- Distributed profits tax only
- No tax on retained earnings
- e-Residency program
OECD Pillar Two (15% global minimum tax)
Estonia elected the EU Directive Article 50 deferral until 2029 (fewer than 12 in-scope groups). Pillar Two rules not yet in effect locally.
See full implementation trackerTax Treaty Network
US-Estonia treaty (1999) in force. No US totalization. Estonia's distributed-profits-only corporate tax coordinates with US treaty for inbound investment.
See full treaty matrixBeyond tax
Living in Estonia
Tallinn is a compact, digital-first capital with excellent e-government, a startup culture and a corporate tax that applies only to distributed profits.
- Expat hub
- Tallinn
- Monthly budget
- ~$2,300
- Climate
- Continental, 7°C
- Time zone
- UTC+2
- Tax78
- Cost of living$$$
- Safety80
- Healthcare75
- English70
- Internet100 Mbps
- Warm climate10
- Residency access50
- Scores 0-100, higher is better. Editorial composite ratings; see method.
Ways to get residency
- Digital Nomad visa€4,500/month gross foreign income over the prior 6 months, up to 1 year
- Startup visaStartup endorsed by the Estonian Startup Committee
Watch out: Winters are long, dark and cold, and the digital nomad visa does not lead to long-term residency.
See how Estonia ranks for remote workers, retirees and familiesData Sources
Last verified: June 2026. Always check official sources before making a decision.
FAQ
What is the personal income tax rate in Estonia?
+
Estonia has a top personal income tax rate of 22%. The tax structure is: Flat 22% on all income from 2025. The previously legislated jump to 24% in 2026 was cancelled — rate held at 22% to support growth.. See the detailed breakdown above and verify with official sources.
Do I need to pay tax on foreign income in Estonia?
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Estonia uses a worldwide system for foreign income. Estonian residents taxed on worldwide income; foreign tax credits available
What are the residency requirements for Estonia?
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Tax residency in Estonia generally requires 183 days of physical presence. 183 days required for tax residency. Always verify current rules with official sources.
Is there a wealth tax in Estonia?
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No, Estonia does not have a wealth tax. No wealth tax
What is the corporate tax rate in Estonia?
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The corporate tax rate in Estonia is 22%. 22% on distributed profits only (effective 22/78 = 28.2% on net distribution); retained earnings tax-deferred. The legislated 2026 increase to 24% was cancelled.
US citizen moving to Estonia? Read this first.
Estonia's mid-range personal tax rate (22%) makes the FEIE-vs-FTC choice less obvious for US citizens.
- •If your earned income is at or below the ~$130k FEIE cap and your local effective rate is low, FEIE may dominate. If income is significantly above the cap, FTC usually wins.
- •Both can be combined on different income streams in the same year, but FEIE once revoked cannot be re-elected for 5 years without IRS consent — choose carefully.
- •Self-employment tax is owed in full — Estonia has no totalization agreement with the US.
- •Investment income (dividends, capital gains): taxed by Estonia at local rates, then FTC offsets the US side.
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