In the meaning of Estonian tax law, an e-resident is a non-resident.
E-resident’s digital ID is a digital document that can only be used to identify a person and give a digital signature in the electronic environment. E-resident’s digital ID allows an alien to participate in pubic-law and private-law operations in Estonia regardless of her or his physical location.
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Estonian digital ID does not grant tax residency or automatically exempt from taxation elsewhere. Likewise, Estonian digital ID does not grant citizenship and the permission to live in Estonia or to enter Estonia or the European Union.
If an e-resident is granted a residence permit or has Estonian citizenship and moves to Estonia, the e-residency will not be withdrawn, but the person can become an Estonian tax resident.
E-resident's digital ID can be applied for at the Estonian Police and Border Guard Board.
Private person’s taxable income
In Estonia, the income of non-residents, including e-residents, is taxed only if it is received in Estonia.
As a rule, e-residents' income is declared by the person who makes payments (withholding agent). The withholding agent withholds taxes from the income received and transfers the amount of tax into the bank account of the Estonian Tax and Customs Board. Payments are declared on the Annex 2 to Form TSD and taxes are transferred into the bank account of the Estonian Tax and Customs Board by the 10th day of the month following the making of the payment.
E-residents have to submit their income tax return themselves if they receive income in Estonia from business or the transfer of property.
To declare taxes, e-residents do not need a registration code issued by the Estonian Tax and Customs Board, as e-residents have an Estonian personal identification code, which is the most suitable means for declaring taxes in Estonia.
In order to use the income tax incentives and reductions arising from the conventions for the avoidance of double taxation concluded with Estonia, a non-resident has to provide the Estonian Tax and Customs Board with a certificate of residency confirmed by the tax authority of his or her country of residence.
Last updated: 02.10.2024
