Tax in Estonia: the 22% flat tax, and the increase that never came
Estonia levies a flat tax of 22% on income, with since 2026 a tax-free allowance of € 700 per month for everyone. The planned increase to 24% did not go ahead — guides that quote that rate were too early. When you become tax resident, how the return runs from 16 February to 30 April, what the treaty does with your pension, and why the year of emigration has two returns.
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Written and checked by Auke on , against the sources at the bottom. Is something no longer right? Report it below and I'll fix it.
In Estonia you pay 22 percent income tax, without brackets, above a tax-free allowance of € 700 a month, € 8,400 a year. The tax-free allowance is the part of your income on which you pay no tax. Since 2026 that has been one amount for all working residents.
If you read 24 percent somewhere, you are reading a guide written too early. The increase to 24 percent was announced in 2025, but did not go ahead. The Estonian government left it out of the 2026 budget in September 2025, and the rate for companies and individuals stayed at 22 percent.
The pitfall is in the year of emigration: fiscally it falls in two countries.
When do I become tax resident in Estonia?
According to the Estonian Tax and Customs Board EMTA you are resident if your permanent place of residence is in Estonia, or if you stay in Estonia for at least 183 days within twelve consecutive months. You are resident from the day of arrival. You report a change in your tax residence to EMTA yourself, with form R.
Which rates apply in 2026?
| Item | 2026 |
|---|---|
| Income tax | 22 % |
| Tax-free allowance | € 700 a month, € 8,400 a year |
| Tax-free allowance from pensionable age | € 776 a month, € 9,312 a year |
| Unemployment insurance, employee | 1.6 % |
| Social tax, paid by the employer | 33 % |
| Second pension pillar | 2 %, or on request 4 % or 6 % |
| VAT, standard rate | 24 % |
You get the allowance from your employer on written request. From pensionable age the Estonian Social Insurance Board and the pension registry calculate it automatically. What it means for your payslip is in working in Estonia.
How does the return work?
Pre-filled, through e-MTA, the online portal of the Estonian tax authority. You log in with your ID card. For the 2025 return these dates applied:
| What | When |
|---|---|
| Submitting the return | from 16 February to 30 April |
| Refund for a return via e-MTA | from 5 March |
| Refund for a paper return | from 18 March |
| Additional payment or final refund | 1 October |
You do not send supporting documents for deductions. If EMTA has questions, an official gets in touch.
What does the treaty do with my pension?
The tax treaty the Netherlands and Estonia concluded in Tallinn on 14 March 1997, in the version in force since 22 May 2009, divides it like this:
- Your private pension and annuity are taxable only in your country of residence, Estonia. With one exception: a payment without a periodic character, or a lump-sum commutation, may be taxed by the Netherlands as the source state (the country the money comes from).
- The Netherlands may tax the AOW and other Dutch social security benefits.
- The Netherlands may tax a government pension, paid by the State or from funds it created. Only Estonia taxes it if you are a resident and an Estonian national.
- The Netherlands may tax a rented house in the Netherlands.
- The Netherlands may withhold at most 15 percent on dividends, and at most 10 percent on interest.
Unlike for Spain or Germany, the Belastingdienst has no worked-out country page for Estonia. How it works out net for your mix of AOW, employer pension and annuity is the one point where an hour with a tax adviser beforehand pays for itself. More on the general rules is in when does your pension stay taxed in the Netherlands.
Why are there two returns in the year of emigration?
Because in that year you are partly Dutch and partly Estonian taxable. For the Dutch part you file the M return: the Dutch return for the year in which you emigrate. You can do that online via Mijn Belastingdienst or on the paper form M. In Estonia you file your first Estonian return for the year of arrival, the spring after.
The healthcare contribution belongs in the sum. Whoever comes with a Dutch pension and does not work arranges healthcare through the CAK and pays a contribution multiplied by the country-of-residence factor; for Estonia that is 0.3057 in 2026. Whoever leaves on early retirement should watch the date: as things stand, the CAK expects the route to close to new applicants from 1 November 2026.
In Vertrekklaar this is phase 2 of 5 of the journey, step 2.3: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to Estonia or go straight to step 2.3 in the open plan.
What this means for your numbers →
What this rests on
The facts in this article come from these official pages. Rules change. When in doubt, go by the source, not this article.
- EMTA — the 2026 rates — emta.ee
- EMTA — the 2025 return, the dates and who is resident — emta.ee
- Government of Estonia — the 2026 budget, without the income tax increase — valitsus.ee
- Treaty text NL-Estonia (1997, amended 2008) — wetten.overheid.nl
- Belastingdienst — the M return for the year of emigration — belastingdienst.nl
- CAK — moving abroad with a Dutch pension or benefit — hetcak.nl
- Staatscourant 2025, 38064 — the country-of-residence factors 2026 — zoek.officielebekendmakingen.nl
- CAK — early retirement pension and the closure from November 2026 — hetcak.nl
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