The main changes concerning the declaration of income of year 2020 in comparison with 2019 can be found in the table below.
|Income tax return for 2019||Income tax return for 2020
(income tax return to be submitted by 30 April 2021)
|Increased basic exemption upon provision of maintenance to children||A parent could take into account in his or her income tax return the basic exemption 1,848 euros starting from the second child.||
The basic exemption of a child (of up to 17 years of age) taken into account in a parent’s income tax return (1,848 euros for the second child and 3,048 euros starting from the third child) is decreased by the annual income of a child.
In addition to the taxable income of a child, dividends and other payments received from a company which are not taxed as income of a natural person are included in the annual income of a child.
The annual income of a child does not include the survivor's pension or national pension upon loss of a provider.
|Exemption from tax upon sale of timber and transfer of cutting right||A natural person could not make deductions from the income from the sale of timber and transfer of cutting rights without expense documents.||A natural person may additionally deduct up to 5 000 euros during a period of taxation from his or her income derived from the sale of timber felled from an immovable belonging to him or her and the transfer of the right to cut the standing timber growing there as well as from the Natura 2000 support for private forest land after the deductions of expenses related to forest management have been made.|
|Proportion of deductions depending on foreign income||Deductions from income taxable in Estonia were taken into account in proportion to the share of income taxable in Estonia in the person’s total taxable income.||Deductions from Estonian income are taken into account regardless of the share of income earned abroad.|
|Maternity benefit, adoption benefit or compensation for several months due to lay-off||
Benefit or compensation received in the fourth quarter may be divided over the calendar months in order to break up the basic exemption; you may make a correction into the income tax return for 2019 and declare a part from the benefit or compensation received in 2019 in your income tax return for 2020.
Benefit or compensation received in the fourth quarter may be divided over the calendar months in order to break up the basic exemption and you may declare a part from the benefit or compensation received in 2020 in your income tax return for 2021 to be submitted by 30 April 2022.
|Special tax arrangement of crew||Was not available||
As of 1 July 2020, the remuneration of a crew member is under certain conditions subject to tax at a rate of 0%. The remuneration shall in any case be declared in Estonia, indicating the IMO number of the ship.
|The changes in declaring the income for 2021
(income tax return to be submitted by 30 April 2022)
|Tax exemption for allowances||Income tax is not charged and withheld on allowances paid on the basis of the State Budget Act and the Atmospheric Air Protection Act in order to improve the living conditions for families with many children and to increase the energy efficiency of small houses.|
|Tax amendments related to the funded pension reform||Taxation of pensions from 1 January 2021|
|Sole proprietor engaged in agricultural production||A sole proprietor may additionally deduct up to 5,000 euros during a period of taxation from his or her income derived from the sale of self-produced agricultural products after the deductions of certified expenses have been made.|