
Declaration of income for the last year starts in ten days, 15 February, and will last until the end of April. Refunds of overpaid income tax will begin 5 March. What has changed in this year, who can count for the refund of tax and what to attention when submitting the tax declaration, explained the manager
of the present day banking private clients Coop
Pank Monica Maaring.
Tax and Customs
department.
Photo: Annabel Kask rus.postimees.ee 5 February 2025, 08:59:59
Declaration of revenues for the last year will start in ten days, 15 February, and will continue until the end of April. Refund of overpaid income tax will begin 5 March. What has changed in this year, who can count for the refund of tax and what to
attention when submitting the tax declaration, explained the manager of the part-time banking private clients Coop Pank Monica Maaring.
From the total income of a person can subtract total tax-exempt income, expenses for education, donations and contributions to the third pension step. Different from the previous years, no longer can deduct from income interest on a credit or leasing,
The amount of the tax-exempt amount depends on income. For people who have not reached pension age and their annual income is up to 14 400 euros, the tax-exempt amount of the amount of 7848 euros per year applies. If the annual income is in the range from 14 400 to 25 200 euros, the calculation of the non-taxable amount because it decreases by the formula: 7848 – 7848 ÷ 10 800 × (sum of income – 14 400). If the annual income exceeds 25 200 euros, the nontaxable taxable minimum is absent. In pension age the nontaxable minimum is 9312 euros euros in year.
Although in 2025 year the rate of income tax is 22%, in this year they filed declarations for 2024 year, and take into account the tax rate in effect at that is 20%. This means, for example, that, from contributions to the third pension step, done in 2024 year, the state will recover 20% tax, while with the contributions made in 2025 year, already 22%.
The tax refund from the third pension step
The most tax refunds will likely be received by those who made contributions to the third pension step. The State refunds income tax on these contributions until those steps, until they exceed 15% of the annual gross income of a person and not more than 6000 euros per year. For example, if the income this allowed and in 2024 year the third pension step was 6000 euros, it is now possible to receive 1200 euros of tax refund. Because of the increase in income tax refund in the future will become even more bigger if in 2025 year the input into the third pension step of 6000 euros, in 2026 year is possiblewill receive already 1320 euros reimbursement.
The reimbursement of income tax makes the third pension stage one of the most beneficial ways of saving and increasing funds. The same tax advantage has and the second pension stage, to which contributions are directly directed from wages, that is before the payment of income tax.
Contributions to the third pension step, as typically, are displayed in the tax declaration automatically. But if a partial contribution was made on the last days of the last year (from 28 to 31 December 2024 of the year), they may not display automatically, and to receive a tax refund they will have to be entered manually.
Refund of tax from donations and expenses for training
It is still possible to deduct from taxable income donations and expenses for training within the limits of 1200 euros, but in an amount of no more than 50 percent of the income taxable in Estonia. For example, if in 2024 year were declared donations and expenses for training in amount 1200 euros, the tax refund will be 240 euros. In 2025 year for the same same amount the refund will already 264 euros.
So that an adult student can take advantage of the tax benefit in connection with additional training, the educational institution must have the appropriate license, or it must register as an economic activity for providing such training. To receive the tax benefit from donations, they must be made for the benefit of the organizations, included in the list of those with relevant tax benefits, which can be found at the website of the Tax and Customs Department.
Accounting of income when selling real estate
Income tax must be paid to the state on the gain, derived from the sale of real estate, that is, from the difference between the purchase price and the sale. For example, if a person bought real estate for 20 000 euros, and sold for 50 000 euros, then the income tax of 20% must be paid on the income of 30 30 000 euros. If the seller is able to document support (e.g., checks) investments made to improve the real estate (say, replacement of the roof of the house or the purchase of new kitchen furniture for the apartment), these expenses can be deducted from income.
Declaring income when selling your home
Tax on the sale of real estate is not required, If a person sells the own housing, and such transaction without the occurrence of tax obligations can be done every two years. If a housing purchased with the use of a housing credit is sold, interest on the credit can be deducted from income until the moment of the conclusion of the deed of the transfer of ownership to another person.
Exemption from income tax on the sale of returned property and giving
Besides the sale of the own home, is also exempt from income tax on the sale of wrongfully owned and subsequently returned property, and also property received in the result of privatization with the preferred right to purchase. No tax need pay tax and whensale of a garden house or dacha, if the area of the land plot does not exceed 2500 square meters, and the real estate has been in the ownership of the seller for at least two years.
Calculation of income tax in inheritance or gift
If an inherited residential premises or house is sold, which the heir used as the place of residence before the sale, and had not sold another dwelling in the last two years, then no income tax on the gain from the sale of the inheritance is assessed.
But, if property received by inheritance or by gift, which the seller didn’t use as a dwelling is sold, the original price of the property is set in the amount of zero euros, and income tax must be paid in the full amount of the sale price of that property. For example, if a grandson sold an inherited from a grandmother or grandfather an apartment for 100 000 euros, and the grandmother or grandfather purchased it for 70 000 euros, the cost of the purchase of the grandmother is not counted, and tax is paid on the amount of the sale.
Filing declaration and using the refund
Declaring income for 2024 year is e-MTA, access to which is possible with a actual ID card, Smart-ID or Mobile ID with actual PINs. If it is technically possible to use e-MTA, electronic service “My income” provides an overview of who and in what amount of funds paid to the person in 2024 year, and alsowhatpart ofthetax-exemptamountwasused.Here.You can alsoseetheexpectedincometaxobligations.The finalamountofincometaxorrefundisdeterminedafterthefilingofthedeclarationwithincludingalltaxableincomeandtaxbenefits.
When you receive arefundofoverpaidincometaxes,consider carefullyhowwiselytousethismoney.For example,on theMTAsite,youcaneasilydonatearefund ofincometaxorapart of ittorecognizedgovernmentlevelnonprofitorganizations,foundationsandreligiousassociationswhichareincludedbyMTAinthelistoforganizationsthathaveincometax benefits.
Theincometaxrefundalsocouldbeagoodopportunitytostartsavingorincreasingtheirfunds.For example,thereturnedincometaxcouldbedirectedtotermorsavingsdepositsofferedbybankstoearninterest,orcouldmakecontributionstothethirdpensionstep,usingthemoneytoreceivethetaxbenefitinthenextyear.
Alsoapart oftherefundoftheincometaxcanbereservedintheTax and CustomsDepartmentaccountforpaymentoffutureobligations.These future liabilities may include, for example, income tax, land tax, land tax, car or motorcycle registration fees, or Customs and import duties.
The Customs Department will be responsible for the customs and import duties.