Provision of a security

A tax authority shall determine the amount of security to be provided. The scope of security shall be determined based on the size of secured claim and the extent of the costs of a possible compulsory execution. The extent of the costs of compulsory execution depends on a security offered. A tax authority does not add any costs of compulsory execution to the claim for a security if the amount of security paid into the bank account as a deposit serves as a security. The costs of compulsory execution are generally not determined if there is a surety accepted by a tax authority. If a pledge is established, the costs of compulsory execution are always added to the claim for a security.

A person who is obligated to provide a security may choose between the following types of security (Taxation Act § 122):

• surety;
• an amount of security paid into the bank account as a deposit;
• a registered security over movables or a mortgage established for the benefit of the state, a rural municipality or a city.

The providers of surety accepted by Estonian Tax and Customs Board:

The persons included in the list of surety providers accepted by Estonian Tax and Customs Board have themselves expressed the will to provide a surety and applied for the relevant right from the Tax and Customs Board.

Surety documents are submitted using the application form (93.84 KB, RTF) designed for this purpose which has been transmitted to the credit and insurance institutions included in the list of the providers of surety.

The amount of security is paid into the bank account indicated in the decision where the amount for a security was determined. The reference number indicated in the decision will be written on the payment order.

In order to establish a pledge a taxable person must apply for the relevant right from the Tax and Customs Board. In addition, it is necessary to submit an expert assessment in accordance with the requirements of the Estonian Centre for Standardisation (EVS 875), because the value of a pledged object is appraised on the basis of the market value stated in the expert assessment. Expert assessments have to be issued by a valuation professional and must not be older than three months. Estonian Tax and Customs Board accept valuators who own a professional certificate. The list of valuation professionals is available on the homepage of the Estonian Association of Appraisers. An expert assessment must be drawn up for submission to the Tax and Customs Board and contain the consent of the provider of assessment service to disclose the assessment to third parties.

As a rule, first-ranking mortgages are accepted as a security, but depending on a specific security offer, it is possible to establish a pledge on subsequent rankings.

A security is not accepted if the value of the provided pledged object is not sufficient as a guarantee cover or it is illiquid, or assets are already mortgaged in the amount whereof the difference of the value of assets and the sum of mortgages is not sufficient to secure a claim.

In case of any questions regarding the provision or release of a security please turn to the contact person of the Accounting Division of Service Department:
Keiu Randma, Keiu.Randma@emta.ee, (+372) 676 1609