Pursuant to subsection 1 of § 48 of the Income Tax Act, employers pay income tax on fringe benefits granted to employees.
Based on clause 7 of subsection 1 of § 2 of the Social Tax Act, social tax is paid on fringe benefits within the meaning of the Income Tax Act, expressed in monetary terms, and on income tax payable on fringe benefits.
Declaration
The period of taxation of fringe benefits is one calendar month. The employer declares the fringe benefits granted to employees and income and social tax calculated on fringe benefits during a calendar month in Annex 4 of the form TSD, which must be submitted together with the form TSD to the Estonian Tax and Customs Board by the 10th day of the month following the calendar month in which the fringe benefit was granted. The tax amount is paid to the bank account of the Tax and Customs Board by the same date at the latest.
Legal basis
Handbook “Fringe benefits”
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Expenses made for maintenance of employers' existing sports facilities
The tax exemption extends to expenses incurred for the maintenance of employers’ existing sports facilities (excluding investments). Employers can maintain existing facilities within the limit of the tax exemption. The size of the threshold is also 400 euros per employee per year, and the limit of those employees who use the employer's sports facilities can be used.
Example
Sports facilities are stadiums and sports fields, ice rinks, outdoor swimming pools, motor tracks, race tracks, velodromes, golf courses, beach bathing facilities, trampolines, roller-skiing tracks. The exemption also applies to buildings and parts thereof which are not sports facilities (e.g. gyms).
Expenses incurred for the maintenance of sports facilities include, for example, expenses directly related to the maintenance of the premises, which may include the repair and cleaning of the premises and equipment used for health promotion, as well as expenses such as electricity and water.
Please note that the price of the fringe benefit is not the market price for the use of a comparable gym, but the amount actually spent on maintenance of the sports facility.
Example
The employer has created a gym for the employees of the company to use in their premises, which is regularly used by 10 employees. Maintenance and cleaning of rooms and equipment costs 200 euros per month, plus 150 euros for water and electricity costs, totalling 350 euros per month, or 4200 euros per year. Since the annual tax-exempt limit for 10 employees is 10 × 400 = 4000 euros, the part exceeding the limit, i.e. 200 euros, is subject to taxation.
If the employer builds a gym in the office and buys new instruments or equipment for the gym, the expense incurred is considered a business-related payment that is not taxed.
Last updated on 08.01.2025
Last updated: 05.11.2025