Tax incentives

Deductions such as the basic exemption, training expenses and supplementary funded pension contributions may be deducted from a person’s total income on their income tax return.

Tax incentives from 2022 to 2026

2026

Tax incentives for 2026 will be taken into account in the 2026 income tax return, which will be submitted in 2027.

From 2026, the basic exemption is 700 euros per month, i.e. up to 8,400 euros per year. The difference compared to previous years is that the basic exemption does not decrease as income increases, i.e. regardless of the amount of income, the basic exemption is still a maximum of 8,400 euros per year.

The basic exemption for persons who have reached pensionable age is 776 euros per month and 9,312 euros per year.

The following may be deducted from taxable income on the income tax return:

contributions to a mandatory funded pension and unemployment insurance premiums – accounted for during the year, excl. sole proprietors’ contributions to a mandatory funded pension;
contributions to a voluntary funded pension – deduction limit of 15% is applied, but no more than 6,000 euros per year;
mandatory foreign social security contributions;
increased basic exemption of up to 5,000 euros from the income derived from the sale of timber felled from an immovable belonging to a forest owner and the transfer of the right to cut the standing crop growing there as well as Natura 2000 support for private forest land after the deductions related to forest management have been made;
training expenses;
gifts, donations.

Training expenses, gifts and donations can be deducted from the income in an extent of up to 1,200 euros. Deductions cannot exceed 50% of the taxpayer’s taxable income in Estonia for the same period of taxation.

2025

Tax incentives for 2025 will be taken into account in the 2025 income tax return, which will be submitted in 2026.

In 2025, the overall basic exemption is up to 654 euros per month, and it decreases as a person's income increases. However, the basic exemption during the pensionable age is a fixed amount – 776 euros per month and it does not depend on the amount of the person's income.

The following may be deducted from taxable income on the income tax return:

contributions to a mandatory funded pension and unemployment insurance premiums – accounted for during the year, excl. sole proprietors’ contributions to a mandatory funded pension;
contributions to a voluntary funded pension – deduction limit of 15% is applied, but no more than 6,000 euros per year;
mandatory foreign social security contributions;
increased basic exemption of up to 5,000 euros from the income derived from the sale of timber felled from an immovable belonging to a forest owner and the transfer of the right to cut the standing crop growing there as well as Natura 2000 support for private forest land after the deductions related to forest management have been made;
training expenses;
gifts, donations.

Training expenses, gifts and donations can be deducted from the income in an extent of up to 1,200 euros. Deductions cannot exceed 50% of the taxpayer’s taxable income in Estonia for the same period of taxation.

In the 2025 income tax return, it is no longer possible to deduct:

housing loan interest;
increased basic exemption upon provision of maintenance to two or more children;
and the unused part of basic exemption can no longer be transferred to spouse.

2024

In 2024, the overall basic exemption is up to 654 euros per month, and it decreases as a person's income increases. However, the basic exemption during the pensionable age is a fixed amount – 776 euros per month and it does not depend on the amount of the person's income.

The following may be deducted from taxable income on the income tax return:

contributions to a mandatory funded pension and unemployment insurance premiums – accounted for during the year, excl. sole proprietors’ contributions to a mandatory funded pension;
contributions to a voluntary funded pension – deduction limit of 15% is applied, but no more than 6,000 euros per year;
mandatory foreign social security contributions;
increased basic exemption of up to 5,000 euros from the income derived from the sale of timber felled from an immovable belonging to a forest owner and the transfer of the right to cut the standing crop growing there as well as Natura 2000 support for private forest land after the deductions related to forest management have been made;
training expenses;
gifts, donations.

Training expenses, gifts and donations can be deducted from the income in an extent of up to 1,200 euros. Deductions cannot exceed 50% of the taxpayer’s taxable income in Estonia for the same period of taxation.

In the 2024 income tax return, it is no longer possible to deduct:

housing loan interest;
increased basic exemption upon provision of maintenance to two or more children;
and the unused part of basic exemption can no longer be transferred to spouse.

2023

In 2023, the overall basic exemption is up to 654 euros per month, and it decreases as a person's income increases. However, the basic exemption during the pensionable age is a fixed amount – 704 euros per month and it does not depend on the amount of the person's income.

The following may be deducted from taxable income on the income tax return:

contributions to a mandatory funded pension and unemployment insurance premiums – accounted for during the year, excl. sole proprietors’ contributions to a mandatory funded pension;
contributions to a voluntary funded pension – deduction limit of 15% is applied, but no more than 6,000 euros per year;
mandatory foreign social security contributions;
increased basic exemption for spouse (if the spouse’s annual income is less than 2,160 euros and if the spouses’ total annual income does not exceed 50,400 euros) is 2,160 euros and the spouse’s annual income difference;
increased basic exemption upon provision of maintenance to child – the amount is 1,848 euros for the second child and 3,048 euros starting from the third child. Increased basic exemption is not reduced if the child receives a survivor’s pension or a national pension upon loss of a provider;
increased basic exemption of up to 5,000 euros from the income derived from the sale of timber felled from an immovable belonging to a forest owner and the transfer of the right to cut the standing crop growing there as well as Natura 2000 support for private forest land after the deductions related to forest management have been made;
housing loan interests on loans taken for the purchase of a home – in the amount of 300 euros;
training expenses;
gifts, donations.

Housing loan interests, training expenses, gifts and donations can be deducted from the income in an extent of up to 1,200 euros. Deductions cannot exceed 50% of the taxpayer’s taxable income in Estonia for the same period of taxation.

2022

The following may be deducted from taxable income on the income tax return:

contributions to a mandatory funded pension and unemployment insurance premiums – accounted for during the year, excl. sole proprietors’ contributions to a mandatory funded pension;
contributions to a voluntary funded pension – deduction limit of 15% is applied, but no more than 6,000 euros of tax-free income per year;
mandatory foreign social security contributions;
increased basic exemption for spouse (if the spouse’s annual income is less than 2,160 euros and if the spouses’ total annual income does not exceed 50,400 euros) is 2,160 euros and the spouse’s annual income difference;
increased basic exemption upon provision of maintenance to child – the amount is 1,848 euros for the second child and 3,048 euros starting from the third child. Increased basic exemption is not reduced if the child receives a survivor’s pension or a national pension upon loss of a provider;
increased basic exemption of up to 5,000 euros from the income derived from the sale of timber felled from an immovable belonging to a forest owner and the transfer of the right to cut the standing crop growing there as well as Natura 2000 support for private forest land after the deductions related to forest management have been made;
housing loan interests on loans taken for the purchase of a home – in the amount of 300 euros;
training expenses;
gifts, donations.

Housing loan interests, training expenses, gifts and donations can be deducted from the income in an extent of up to 1,200 euros. Deductions cannot exceed 50% of the taxpayer’s taxable income in Estonia for the same period of taxation.

Calculation of basic exemption

Basic exemption is the part of income on which income tax is not paid. Separate basic exemption rates apply to people who are not of pensionable age and to people who are of pensionable age or will reach pensionable age within a year.

Basic exemption at pensionable age

Fom 2023, overall basic exemption applies to people who have not reached pensionable age, and basic exemption to people at pensionable age who have reached the pensionable age or will reach it during the calendar year.

Training expenses

A natural person can deduct from their income the training expenses paid by them during the calendar year for their own and for their children, grandchildren, sisters or brothers of less than 26 years of age. If no such training expenses have been incurred, you can deduct the training expenses of one permanent resident of Estonia of less than 26 years of age, if you have paid these expenses yourself. The age limit does not apply when deducting the taxpayer’s own training expenses.

Gifts and donations

Certified gifts and donations can be deducted from the income, if these are made to the person entered into the list of non-profit associations, foundations and religious associations benefiting from income tax incentives that shall be approved by a resolution of the Estonian Tax and Customs Board.

Contributions to the supplementary funded pension

Contributions to the supplementary funded pension or the III pension pillar may be deducted by a person up to 15% of the income taxable in Estonia, but not more than 6,000 euros per year.

Sharing tax incentives

Spouses or registered partners can transfer training expenses not used in their income tax return to each other's tax return.

private client tax incentives

Last updated: 19.02.2026