Estonia levies a Land Value Tax which is used to fund local municipalities.
Estonia natural person income tax is considered to be proportional, but, due to basic exemption, it is actually progressive.
Additionally, a number of expenses are deductible: housing loan interests, training expenses, gifts, donations, contributions to a voluntary/mandatory funded pension and unemployment insurance, social security payments mandatory in a foreign state.
Since 2011, a new system has been in place, which allows natural persons to defer the tax liability created on income received from financial assets until the time of taking the income into use, by using an investment account for this purpose.
[4] Salaries paid to employees are subject to Social tax rate stands at 33%.
In 2012, a rate of a funded pension payment is 2% of the gross salary of a resident employee and are withheld by employer.
In case profit distributed to shareholders originates from dividends received from a subsidiary company or from a permanent establishment the corporation has in another country, then profit distribution is tax exempt.
As of 2018, the annual turnover threshold for mandatory registration as VAT liable person is 40,000 euros.