After the most important changes in estonian Penal Code, let's talk about those entered in force recently in the Income Tax Act
From 1 January 2015, the income tax rate is 20% and the income tax exempt minimum increases from the current €144 to €154 per month (€1,848 annually).
From 1 January, granting a loan that meets the market conditions is not considered a fringe benefit. In order to improve legal certainty of taxpayers, an exception is added to the Income Tax Act, according to which granting a loan with an interest higher than the double interest rate of the European Central Bank applicable for the main refinancing operations, is no longer considered a fringe benefit.
From 1 January, the incentives concerning distribution of profit earned before the year 2000 (Income Tax Act Section 60 and 61(27) and (28)) becomes invalid. Companies who have not paid dividends on profit earned during the years 1994-1999 cannot use the deductions arising from the aforementioned provisions starting from the new year.
Additionally, the rules for income tax on the fees paid to non-resident board and council members have changed. From 2015, the fees paid to non-resident board and council members are taxable with income tax even when the payer of the fee is not a legal entity of Estonia or the non-resident’s permanent place of business in Estonia. Thus, taxation of the fee of non-resident board member will take place in Estonia, regardless of who is paying the fee.
There are also amendments to The Value Added Tax Act
Taxation of electronic communication services (e.g. internet, digital television and telephone service) and services provided electronically (e.g. web administration, remote maintenance of programmes and equipment) rendered to natural persons in another member state will change from the new year. According to the amendment, the aforementioned digital services must always be taxed in the Member State of the location of the client.
If an Estonian company is providing digital services for a natural person located, for example, in Spain, the Estonian company is required to register as a person liable to value added tax in Spain and pay the value added tax to the Spanish tax authority. In order to decrease the administrative burden of companies, the law foresees a special procedure for taxation with value added tax. Through this procedure, a service provider may declare and pay the value added tax subject to payment in another Member State to the Estonian Tax and Customs Board who will then forward it to the tax authority of the respective country.
Also to be noticed:
From 1 January, the minimum wage increased by almost 10% or from €255 to €390 per month. The minimum hourly wage increased from €2.13 to €2.34.
The amendments (in estonian only):https://www.riigiteataja.ee/akt/111072014005