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Declaration of aid received through ARIB (Estonian Agricultural Registers and Information Board)

The supports paid by ARIB since 2015 that had not been related to the business, had been charged by ARIB already upon payment thereof and these are entered into the income tax return pre-completed by the person.

At the same time the aid received in relation to business is subject to taxation. Therefore, if sole proprietors request aid that is related to their business, the received aid must be included in their business income and they may deduct the expenses incurred from their income (incl. from the aid).

In the event of area payments the question of taxation depends on the fact, whether the plots of land for which the area payments were requested, are used for business purposes. If the receipt of aid depends on the number of heads in cattle, the next question that matters is: Is the cattle raised for receiving income from the sale of the product (e.g. milk, meat, wool, skins and furs, etc.).

The benefits which may be requested by sole proprietors only must be declared under business income and the expenses incurred may be deducted from business income.

Upon receipt of aid on the basis of information of a previous period it is important to know if the expenses necessary for achieving an objective (e.g. harvesting expenses) have been deducted. If such expenses have been deducted from business income, then the aid must be reflected under business income also in the cases when in the year of receipt of aid the person was not engaged in business any more.