On business start-up subsidy of the Estonian Unemployment Insurance Fund
The Unemployment Insurance Fund pays the business start-up subsidy to unemployed persons pursuant to the Labour Market Services and Benefits Act. The Unemployment Insurance Fund grants the subsidy to a natural person for commencement of dedicated business activity and for operation
through a new company being founded or
as a self-employed person.
If a person has applied for the subsidy through a company (for example, a private limited company) to be engaged in business, he or she has to transfer the amount of the subsidy to the company being founded and the expenses incurred shall further be entered in the accounts of the company. In this case, regarding the subsidy and expenses, the principles of taxation prescribed for the company shall apply.
If a person applies for the subsidy for operation as a self-employed person (a sole proprietor), he or she must register himself or herself in the e-Business Register as a sole proprietor and indicate the amount of the subsidy in the income tax return as income from business (Form E). The registered sole proprietor can take the incurred expenses related to business into account when business income (including the subsidy) is taxed.