This year, the changes to the VAT Act got the most publicity - there is no more possibility of getting a full VAT deduction on a car for business use. But there are quite a few other changes, affecting all major taxes. ERR News pored through the laws.
* The income tax rate in the country will be 20 percent, down a percentage point. Of monthly income, 154 euros will be tax free. Of pensions, 220 euros per month is tax exempt. (January 1, 2015)
* The amount of money that is the basis for the minimum social tax obligation will increase, to 355 euros, up from 320 euros. If you have a company, basically that means you have to pay at least 117.15 euros (33 percent of 355 euros) in social tax per employee. (January 1, 2015)
* All invoices (or sums of invoices for a single customer in a month) over 1,000 euros before VAT must be declared on a special form on the electronic VAT return. (November 1, 2014)
* If you buy a passenger vehicle for use in business (or spend money related to such a car), you can only claim 50 percent input VAT on it, not 100 percent. This is a solution to combat the estimated 7,000 companies set up in Estonia for the sole purpose of buying a car and claiming tax back. (December 1, 2014)
* The unemployment insurance premium will drop, from 3 percent to 2.4 percent. As before, the employer will pick up one-third of it; the employee, two-thirds. (January 1, 2015)
Cars, trucks and ships, etc.
* People who aren't inclined to keep a trip log on use of business vehicles by employees can no longer just deduct a flat 64 euros per month in compensation per vehicle. If you keep a trip log, you can deduct up to 30 cents per kilometer, but not more than 335 euros per calendar month. (September 1, 2014)
* No more excise exemptions for fishing vessels. (January 1, 2015)
* The overall tax refund processing period will increase to 60 days from 30 days, but VAT refund checks will be conducted faster, in 60 days instead of 90. The Tax Board said the change will allow them to investigate more claims without having to pay out interest. (August 2014)
* The alcohol excise will rise 15 percent. (January 1, 2015)