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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First aid equipment and medicinal products
In order to prevent or reduce health risks, the workplace must be equipped with protective, rescue and first aid equipment, safety signs and other safety equipment (subsection 4 of § 4 of the Occupational Health and Safety Act).
An employer must ensure that the employee has access to first aid and first aid equipment at the workplace. The expenses incurred on first aid equipment must be related to business – the equipment must be necessary and reasonable according to the nature of the work of the employee. In such case, performance of the obligation does not result in tax liability.
If the quantity of stocked first aid equipment exceeds a reasonable limit (e.g., significantly less first aid equipment has been acquired for the same number of employees in previous years), the tax authority will have a legitimate question as to the purpose for which such quantity of first aid equipment has been acquired.
The acquisition of medicinal products by an employer for employees is not included in the first aid means. If an employer acquires medicinal products for employees, the expenses incurred are not deemed to be business-related expenses and the employer is subject to tax liability.
If a company is required to acquire medicinal products pursuant to legislation, no tax liability arises upon acquisition of medicinal products.
Last updated on 08.01.2025
Last updated: 05.11.2025