Glossary of Estonian Tax Terms (EN)

Value-Added Tax (VAT)
A consumption tax applied to the sale of goods and services. The standard VAT rate in Estonia will be 24% starting from July 2025.

OSS (One Stop Shop)
A unified EU scheme for VAT reporting on cross-border B2C sales of goods and services within the EU.

IOSS (Import One Stop Shop)
A VAT scheme for B2C sales of goods imported from non-EU countries to EU customers (up to €150 per shipment).

Income Tax
A tax on profit. In Estonia, companies pay 22/78 on distributed profits; individuals pay 22%.

Social Tax
A tax of 33% paid by the employer to cover state pension and healthcare.

Unemployment Insurance Premium
A contribution for unemployment insurance. 1.6% is withheld from the employee, 0.8% paid by the employer.

Environmental Charges
Charges for using natural resources or polluting the environment. Declared quarterly via KOTKAS.

Excise Duty
Taxes on alcohol, tobacco, fuel, electricity, and packaging. Involves special registration and tracking via SADHES/EMCS.

Permanent Establishment
A fixed place of business through which economic activity is conducted abroad.

Reverse Charge
A VAT mechanism where the buyer is responsible for VAT in their country.

Certificate of Tax Residency
A document proving Estonian tax residency, required to claim tax relief abroad.

A1 Certificate
Proof of social insurance in Estonia for employees on international assignments.

TSD Form
Monthly declaration form for payroll taxes, including income tax, social tax, and unemployment insurance.

KOTKAS
Estonia's digital platform for submitting environmental charge declarations.

EMCS
EU-wide system for electronic movement of excise goods.

SADHES
Estonia’s domestic excise delivery note management system.

Tax Period
The time frame for tax calculation and reporting. Usually a calendar month or year.

Tax Exemption
A legal relief from tax payment, such as on export or specific activities.

Input VAT
VAT paid on purchases that can be deducted from output VAT.

Output VAT
VAT charged on sales. The difference between output and input VAT is payable or refundable.

Double Taxation Treaty
An agreement between countries to prevent income from being taxed twice.

Fiscal Representative
A designated person or company representing a foreign taxpayer for VAT purposes in Estonia.

Fringe Benefits
Non-monetary employee benefits such as housing or company car. Subject to taxation.

Tax Return
A report filed with the tax authority, detailing calculated and paid taxes.

Withholding Tax
Tax withheld at the source, e.g. on dividends, interest, or salary.

Deemed Supply
A taxable event treated as a supply for VAT purposes, even without payment.