What are the key taxation changes in Estonia from 01.07.2025?

There will be changes to Estonian tax law effective from 1st July 2025 and from 1st January 2026.

Key Changes: 

- VAT Rate Increase: 22% → 24% (Effective from 01.07.2025)

The VAT rate will increase from the current 22% to 24% from 1 July, 2025.

- Income Tax Rate Increase: 22% → 24% (Effective from 01.01.2026)

Initially, the government planned to introduce a 2% corporate profit tax starting 0.1.01.2026 and to begin taxing individuals from the first euro earned. However, these plans have been canceled.

Instead, the income tax rate for both individuals and companies will be increased by two percentage points—from 22% to 24%—starting 1 January 2026.
This means that a permanent increase in the income tax rate will replace the previously proposed fixed-term security tax.