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Estonia · Law · SE

645

The Act on the Amendment of the Business Income Simplified Taxation Act and the Income Tax Act and the Repeal of the Security Tax Act

avaldatud riigiteatajasEstonia· Riigikogu· ET

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12 May 2025

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AVALDATUD_RIIGITEATAJAS

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18 June 2025

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Summary

According to the bill, the originally planned security tax will be abolished until 2028, including both the corporate profit tax and the taxation of natural persons from the first euro. The change is based on the goal of ensuring a stable financing of the state's defense costs, for which the general income tax rate will be raised to 24% and the business income tax rate to 22% from 2026 to strengthen the defense capability in the long term. The VAT rate increase will remain in effect until 2025. from July to 24%, which becomes indefinite. In corporate income tax, a simple, uniform and more business-friendly solution will be brought back, where companies pay income tax only on distributed profits, not on current profits. This boosts both entrepreneurship and economic growth.

Machine translation from Estonian. The official text remains authoritative.

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