---
title: Glossary of Estonian Tax Terms (EN)
description: A comprehensive guide to Estonian tax terminology, including Value-Added Tax (VAT), Income Tax Estonia, Social Tax Estonia, and Unemployment Insurance Premium. Perfect for understanding Estonia's tax system and regulations.
---

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# Glossary of Estonian Tax Terms (EN)

**Value-Added Tax (VAT)**  
A consumption tax applied to the sale of goods and services. The standard VAT rate in Estonia will be 24% starting from July 2025.

**OSS (One Stop Shop)**  
A unified EU scheme for VAT reporting on cross-border B2C sales of goods and services within the EU.

**IOSS (Import One Stop Shop)**  
A VAT scheme for B2C sales of goods imported from non-EU countries to EU customers (up to €150 per shipment).

**Income Tax**  
A tax on profit. In Estonia, companies pay 22/78 on distributed profits; individuals pay 22%.

**Social Tax**  
A tax of 33% paid by the employer to cover state pension and healthcare.

**Unemployment Insurance Premium**  
A contribution for unemployment insurance. 1.6% is withheld from the employee, 0.8% paid by the employer.

**Environmental Charges**  
Charges for using natural resources or polluting the environment. Declared quarterly via KOTKAS.

**Excise Duty**  
Taxes on alcohol, tobacco, fuel, electricity, and packaging. Involves special registration and tracking via SADHES/EMCS.

**Permanent Establishment**  
A fixed place of business through which economic activity is conducted abroad.

**Reverse Charge**  
A VAT mechanism where the buyer is responsible for VAT in their country.

**Certificate of Tax Residency**  
A document proving Estonian tax residency, required to claim tax relief abroad.

**A1 Certificate**  
Proof of social insurance in Estonia for employees on international assignments.

**TSD Form**  
Monthly declaration form for payroll taxes, including income tax, social tax, and unemployment insurance.

**KOTKAS**  
Estonia's digital platform for submitting environmental charge declarations.

**EMCS**  
EU-wide system for electronic movement of excise goods.

**SADHES**  
Estonia’s domestic excise delivery note management system.

**Tax Period**  
The time frame for tax calculation and reporting. Usually a calendar month or year.

**Tax Exemption**  
A legal relief from tax payment, such as on export or specific activities.

**Input VAT**  
VAT paid on purchases that can be deducted from output VAT.

**Output VAT**  
VAT charged on sales. The difference between output and input VAT is payable or refundable.

**Double Taxation Treaty**  
An agreement between countries to prevent income from being taxed twice.

**Fiscal Representative**  
A designated person or company representing a foreign taxpayer for VAT purposes in Estonia.

**Fringe Benefits**  
Non-monetary employee benefits such as housing or company car. Subject to taxation.

**Tax Return**  
A report filed with the tax authority, detailing calculated and paid taxes.

**Withholding Tax**  
Tax withheld at the source, e.g. on dividends, interest, or salary.

**Deemed Supply**  
A taxable event treated as a supply for VAT purposes, even without payment.

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