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Queues shall be expected upon declaration of income both in ETCB bureaus and in the e-MTA

12 February 2020

From Saturday or as of 15 February income tax returns shall be submitted to the Estonian Tax and Customs Board (ETCB), the bureaus of ETCB shall start issuing precompleted income tax returns on paper as of 17 February.

ETCB definitely recommend for people not to rush to the bureaus in the first weeks whereas there may be formed long queues. People submitting electronic tax returns should keep patience as well – the previous practice has shown that in the first twenty-four-hours the burden on the information system is immense and therefore not all persons wishing to complete tax returns at once can start doing it. The waiting time for calling the information phone may be long as well.

 „This is not urgent. This year the time for submitting income tax returns is longer by one month and the due date is 30 April”, commented Sander Aasna, the head of the public services of ETCB. „Upon refunding the overpaid amount of income tax we will do the same as in the previous years – if the tax return is correct, the money will be received in a week or two. Thereby the refunding speediness does not depend directly from the turn of the submission of the tax returns.

The tax return has been completed according to the information known to ETCB and, as an innovation, also the information about the sale of the taxable immovable property, according to the estimation of ETCB, shall be added this year. The purpose ist to make declaration of income for a taxpayer easier and simpler. Aasna emphasizes that the precompleted part should definitely be checked over and changed if needed. „For example, once within two years you may sell your dwelling-place exempt from income tax and if this transaction has been inserted into the precompleted information, it shall be simply deleted from the tax return,“ she gave an example. „However, opposite as well – if the income derived is not indicated in the tax return, for example, the rent received or the income derived from a foreign state, you should put it in for yourself.“

As an innovation, a person may, according to his/her wish, to direct his/her overpaid amount of income tax in full or in part at donation. You may choose up to three recipients of the donation from the charitable associations. However, you should bear in mind that after the confirmation of the tax return you cannot recall the donation made.

ETCB will start refunding the overpaid amount of income tax beginning from 26 February to those who had declared their income by electronic means and from 19 March to those submitting their tax return on paper. If a person has to pay an additional amount of income tax, the due date for payment shall be on 1 October.

Essential to know

  • Declaration of income shall start by electronic means on 15 February and on paper on 17 February.  The due date for submission of tax return shall be 30 April.
  • The overpaid amount of income tax shall be started refunding beginning from 26 February to those who had declared their income by electronic means and from 19 March to those submitting their tax return on paper.
  • If a person has to pay an additional amount of income tax, the due date for payment and refunding of the income tax shall be 1 October.
  • The basic exemption to be used during a year shall be 6000 euros. If the annual income grows from 14,400 euros up to 25,200 euros, the basic exemption will decrease according to the formula: 6000 – 6000 ÷ 10 800 × (amount of income – 14,400).
  • Before submitting an income tax return, it is worth determining whether the tax return shall be submitted at all. The people whose annual income does not exceed 6000 euros, on whose income no additional income tax is paid, and those who are not entitled to use tax exemption need not submit an income tax return. No additional income tax is paid if the basic exemption within a year is calculated correctly, there has been neither securities transactions nor contributions-payments from an investment account, also no additional income (e.g. rent, income received from asset sale), the tax whereon shall be paid only by the submission of the income tax return. You can check over for yourself whether the basic exemption is calculated correctly, if you log into the e-MTA and use the application ’ My income’.

Additional information: https://www.emta.ee/eng/private-client/declaration-income/submission-inc...

Main changes upon submission of income tax return

  • The due date for submission of income tax return for natural person is one month later or 30 April.
  • The due date for payment of tax from this year is the same for all – 1 October.
  • The income earned through the business account can be seen in the income tax return as well – it goes to the calculation of the gross income or it has effect on the basic exemption. However, no deductions may be made from the income tax paid through the business account and this is not refunded.
  • This year also the dividends charged by 7 per cent are among the taxable income. This is the case if the preferential rate of tax (14 per cent) was applicable to the Estonian company being the dividend payer, because in this case 7 per cent of the income tax had to be withheld on the dividends payable to the natural person.
  • The refundable income tax or a part of it may be donated at your request in the e-MTA to an association or religious association entered into the list of the persons benefiting from income tax incentives. Up to three recipients of the donation may be chosen. When the income tax is refunded or the money for the donation transferred, it cannot be taken back.
  • If a resident of the EEA country (or a non-resident in Estonia) submits an income tax return, he/she may use other deductions in respect of the year 2019 as well besides the basic exemption. These shall be considered in such proportion that corresponds to the proportion of the income earned by him/her in Estonia to the total income earned worldwide.

 Additional information: https://www.emta.ee/eng/private-client/declaration-income/main-changes-d...

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