Several tax amendments in Estonia will be taking effect beginning Jan. 1, including changes to the minimum wage, the taxation of company cars, the fuel excise duty as well as road user fees for trucks.
As of 2018, the private use of company cars is to be taxed based on the engine power of the car, the Estonian Chamber of Commerce and Industry said in its law amendment overview. The fringe benefit related to the use of a company car for work and private driving can only be declared based on kilowatts, regardless of the distance covered during private drives. The basis for calculating the size of the fringe benefit in the case of a passenger car is €1.96 per unit of engine power listed in the traffic register, and €1.47 if the car is more than five years old.
The excise duty on natural gas and liquefied gas is to increase 25 percent, while the excise duty on gasoline is to increase 10 percent. The excise duty on wines and fermented beverages with an alcohol content of up to six percent by volume is to increase by nine percent instead of the originally planned 18 percent. The excise duty on other kinds of alcohol, meanwhile, is to go up five instead of the originally planned ten percent.
The rate of the excise duty for alternative tobacco products will be €0.20 per milliliter of liquid, or €0.20 per milligram of gel. In addition, the excise duty on cigarettes will increase by eight percent.
As of Jan. 1, trucks with a vehicle weight of more than 3.5 tons will have to pay a road user fee if the truck uses public roads. The rate of the road user fee will depend on the gross vehicle weight of the truck and the trailer, the EURO, emission class and the number of axles of the vehicle. The daily rate of the fee will be €9-12, and the yearly rate €500-1,300. It will be possible to pay this fee weekly, monthly or quarterly.
The minimum monthly wage of full-time employees is to increase from €470 to €500, with the minimum hourly wage increasing from €2.78 to €2.97.
The tax-exempt portion of income for low and medium income earners will increase to €500 per month, which means that people who earn grosss wages of up to €1,200 per month will see an increase in their net salary of up to €64 per month, while lower-paid employees' net wages will increase by up to 15 percent. This measure is expected to cost the state €182 million.
Editor: Aili Vahtla