The new tax will force businesses to sell property, and advance payments will incur more expenses

This year is important for companies, because the results depend on how much security tax will be required to pay in the next year.

If the value of the land owned by the company increases (and this almost always occurs), the company receives the profit with which the commitment to pay safety taxes. Photo: Marko Saarm

This year is important for companies, because

the results will determine how much safety tax will need to pay in the next year.

With the introduction of the tax on the profit of businesses, which technically is the safety tax, in the tax system Estonia two innovative steps have been taken. First, the long-standing principle that a company pays income tax only when money is withdrawn from the company was revoked. With the security tax a part of the profit should be transferred to the government even even if the profit exists on “on paper”. The new tax extends to one-quarter of a company’s profit before taxing the previous year, of which the state retains two percent.

The second change is the introduction of advance payments, that is, the tax is paid to the state in advance, before thewill become known whether any profits have been made at all. According to the Ministry of Finance, the payments in 2026 will be advance, because the final tax obligation for 2026 will be calculated only in 2027 year. Amounts already paid in advancemaybedeductedfromthefinaltax amount.

Amountspaidin advancemaybedeductedfromthefinaltax amount.

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