Over 6,000 people have registered entrepreneur accounts in Estonia
More than 6,000 people in Estonia have an entrepreneur account aimed at streamlining taxation of business activity. The average entrepreneur account received €2,339 in 2021.
The entrepreneur account is a separate bank account available to individuals who sell goods or services. Sums transferred to the entrepreneur account are automatically taxed with a 20-percent rate, with no need for the person to file statements or reports.
While entrepreneur accounts numbered 3,470 in late 2020, this had grown to a total of 6,189 accounts registered by 6,147 persons by the end of 2021, Tax and Customs Board (MTA) data reveals. That said, not all of the accounts were active.
Accounts that received at least one monthly payment totaled 3,997. Entrepreneur accounts saw a total of €9.3 million or an average of €2,339 per account annually.
When the Riigikogu introduced the entrepreneur account law, it also laid down annual limits. Sums in excess of €25,000 a year will be subject to a tax rate of 40 percent. People whose entrepreneur account received more than €25,000 a year numbered just 40 in 2021.
So far, it has only been possible to open an entrepreneur account at LHV bank. Lepassar said that even though the MTA is interested in working with other banks, no agreements are in place at this time.
An entrepreneur account can be used for annual turnover of up to €40,000. Once that limit is reached, the person should register as self-employed or create a company, register as liable to value added tax and take care of accounting and reporting. It is sensible to use an entrepreneur account mainly to sell goods and services with little to no input expenses involved.
Follow ERR News on Facebook and Twitter and never miss an update!
Editor: Marcus Turovski