Applicable Deductions from Personal Income Tax in Estonia
In Estonia, several deductions apply to personal income tax, allowing taxpayers to reduce their taxable income. Here are the key deductions:
Basic Tax-Free Allowance: Individuals can earn up to €6,000 per year tax-free. This allowance is gradually reduced for higher incomes.
Educational Expenses: Taxpayers can deduct expenses related to their education, including tuition fees for themselves or dependents.
Health Insurance Premiums: Contributions to private health insurance can be deducted from taxable income.
Pension Contributions: Contributions to voluntary pension funds are deductible, encouraging savings for retirement.
Mortgage Interest: Interest paid on mortgages for purchasing a primary residence can be deducted.
Charitable Donations: Donations made to registered non-profit organizations can be deducted, promoting philanthropy.
Childcare Costs: Certain childcare expenses may be eligible for deductions, supporting families with children.
Work-Related Expenses: Expenses incurred for work purposes, such as travel costs or necessary tools, may also be deductible.
Taxpayers must keep accurate records and receipts for any deductions they wish to claim when filing their tax returns.