What you can do for your tax matters to be in order
- Follow up that your taxes are declared and paid in time. If your company experiences difficulties and the timely payment of taxes are becoming complicated or has already become difficult, please be sure to contact us. We try to find a solution in common.
On payment of tax arrears in instalments more particularly
- Please register your employees in the employment register in time.
On establishment of employment in the register more particularly
- Please submit correct and objective data on declaration. When being controlled, the data to be declared by you shall play an important role among the rest in comparison with similar companies operating on the same area of activity and in the same region. The average indicators are displayed on the web page "Business statistics by local authorities" (in Estonian).
For example, you will keep a shop trading with clothes and have 10 employees. We will compare the salaries declared by you with the other ones of salespersons in shops of ready-made clothes. If the salaries declared by you exceed the average of your competitors, the likelihood of getting under control shall be little. If you declare the salaries less than the average, we may contact you in order to verify the accuracy of the information declared.
Check the tax behaviour ratings of your company in the e-MTA on a regular basis. Tax behaviour ratings is the new e-service offered by us to provide companies with feedback on their tax matters. In the event of deficiencies, instructions are given on how to correct them. By following the instructions, companies can mitigate the risks of tax controls and additional tax liability. More about the service of tax behaviour ratings
Keep yourself well informed about the changes in taxation – this will help you to avoid mistakes arising from ignorance.
- If you have questions, please consult with our tax specialists.
- If needed, take part in training events organised by the Estonian Tax and Customs Board.
How to avoid getting into a chain of tax frauds
In transactions performance, providing sales of goods and services subject to value added tax, beside the reliable traders participate also persons whose objective is to get rich at the expense of value added tax by fraud. By this, unequal competition terms are set for the undertakings operating at the market and extensive damage is caused to the state. We have also detected value added tax frauds in chains of transactions where goods or services have been realised through companies that may not always be aware of such fraud.
In order to reduce tax risks, it is always sensible to check thoroughly the other party’s background of the transaction and the circumstances thereof. We shall recommend giving special attention to the price of the goods or services provided, if this is considerably lower or higher of the market price and economic justifications for the disparity in prices are lacking. If doubts remain, we shall recommend giving up such transactions and consider finding more trustworthy parties of transactions.
Public databases for conducting background research on counterparties
The background check of your transaction party is useful for you because then you can be sure that:
your transaction partner can supply goods or provide services in agreed conditions at the right time, at the acceptable volume, of the required quality;
if you have further pretensions related to the goods/services, your transaction partner continues operating and is able to rectify deficiencies;
if your transaction partner cannot guarantee the abovementioned, you shall not face a problem with the other cooperation partners and you shall not damage your or your company’s reputation;
you yourself shall not foster deterioration of competition conditions in the sector with such a transaction;
in the case of doubt, you have no difficulties to substantiate the performance of the transaction to the Estonian Tax and Customs Board or the other authorities;
the transaction partner has paid the taxes on the transaction and performed other obligations.
It may bring along a suspicion of participating in tax fraud for the taxable person who has become aware of the actual circumstances of the transaction (that refer to a tax fraud) but despite that participates in the transaction which might be involved in a tax fraud, and thus, it may bring along a suspicion about engagement in a tax fraud, according to the judicial practice in effect (Decisions of the Administrative Law Chamber, Nos 3-3-1-73, point 15, and 3-3-1-27-14, point 18).
Advice to company obtaining dwellings premises
We have compiled a short survey for companies using dwellings premises in business about rules of taxation of immovable property transactions.
How to inform us of tax offences
We are waiting for your hints:
by phone: 800 4444 (free of charge, 24 h)
- by e-mail: email@example.com
Reference data to mitigate the risks of envelope wages
As from June 2020, we publish data on payments declared to the Estonian Tax and Customs Board (ETCB) by job titles for the last 12 months, which we regularly update once a month.
The classification of job titles is based on the International Standard Classification of Occupations 2008 (PDF).
Average wages in Estonia have been observed on a post basis from the month of publication of the data during the last 12 months. The ETCB make calculations on a monthly basis and calculates the average remuneration for employees with an employment contract, regardless of the rate of working time recorded in the employment register. The calculation is based on declared payments made by at least 100 employers to 100 persons. If this criterion is not met, we will display data at the level of the group of occupations.
The publication of the payments declared to the ETCB gives both employers and employees the opportunity to compare the declared average wages on the basis of a job title.
Difference in the calculation of average wages by the ETCB and Statistics Estonia:
- Types of remuneration – Statistics Estonia publishes the average wages which include the following types of remuneration: time and piecework pay, holiday pay, remuneration in kind, irregular bonuses and premiums. The ETCB does not publish average wages, but the various payments per person related to the employment relationship.
- Time-shift – the data of Statistics Estonia are accrual-based, the ETCB's data are cash-based. For example, the wages earned in August are included in the data of August by Statistics Estonia, whereas in the ETCB these wages are included in the data of September, when the wages are paid. Likewise, if two months’ salary (or salary and holiday pay) is paid to the employee in one instalment, Statistics Estonia reflects the payment on an accrual basis whereas according to the ETCB's data, the employee received twice the usual amount.
- The number of employees – in order to compare the wages of part-time and full-time employees, Statistics Estonia will reduce the number of employees to full-time employment. The average number of employees reduced to full-time employment is calculated as follows: the number of full-time employees is added to the number of part-time employees, calculated in proportion to the time worked (for example, two half-time employees calculated as one), the total sum of gross monthly wages is divided by the average number of the employees reduced to full-time employment. The ETCB takes into account all people who have received payments, regardless of whether the payment is made to a person for full-time or part-time work.
In the data of the ETCB, the number of employees is increasing, this means that each employment is accounted for, regardless of the time worked (for example, one month or 12 months). The data are based on the tax return form TSD annexes 1 and 2 (more specific payout codes). In the ETCB, the total amount of payments subject to income tax is divided by the number of persons to whom the payments have been made.