Since 16 February 2026, individuals can submit Estonian annual personal income tax returns – a process that, given its speed and efficiency, many consider our national sport. It is therefore a good moment to review the basics of declaring income, the practical steps involved, and the most common stumbling blocks.

The current income tax return concerns the year 2025. This means that income tax is calculated according to the rules in force last year; for example, the abolition of the “tax hump” (the system where the general income tax exemption decreased as income increased) will only be reflected in the tax calculations for 2026. As of 1 January 2025, the income tax rate is the already familiar 22% (as calculated from gross income).

There is no need to start the tax return filing from scratch as the Estonian Tax and Customs Board (ETCB) pre‑fills information already known to it where another party was required to notify the ETCB or even withhold income tax for you. This includes wages, for example, and tuition fees paid to Estonian educational institutions. However, there are several sources of income and deductions that must be declared (or at least checked) manually.

If the completed tax return shows that too much income tax was paid in 2025 compared to what the law requires in the final calculation, the overpaid tax will be refunded from 5 March. The deadline for submitting the tax return is 30 April, and if additional tax is due, it must be paid by 1 October.

Financial assets, including crypto‑assets

  • First, you must personally provide information about financial assets and crypto-assets and the income earned from them.
  • Under the so‑called regular system, both profitable and loss‑making transactions must be declared in order to determine the total income earned over the year. However, for crypto‑assets, loss‑making transactions may be declared, and losses offset against income, only if the transactions took place on a platform holding a MiCA licence. A list of crypto‑asset service providers licensed in EEA countries can be found on ESMA’s website under Markets in Crypto‑Assets Regulation (MiCA) in the section “Interim MiCA Register“ – Crypto‑asset service providers.
  • The situation is simpler if you have used the investment account system, where only payments into the system and withdrawals must be declared instead of every transaction. The investment account system is only available for Estonian tax residents. In addition to the general benefit that income tax is due only when withdrawals from the investment account exceed deposits, Estonian banks allow you to generate an investment account report on the bank’s website and send it straight to the ETCB. An investment account may also be held at a bank in another EEA or OECD country, although reporting that requires more manual work.
    • Note: Even if a report is generated automatically, you must check what information the bank sends to the ETCB and whether all relevant transfers are correctly recorded as deposits or withdrawals. Make sure that no transfer that is internal to the investment account system has been mistakenly recorded as a withdrawal. If the investment account receives money on which income tax has already been paid or withheld, this may be declared as a deposit, although this, too, often requires a manual adjustment.
    • Even if you have not made any transactions affecting the balance of deposits and withdrawals on your investment account during the previous year, it is important to review this section in the tax return and carry the previously declared amounts forward to the next year.

Additional options for opening an investment account and declaring assets

As of 1 January 2024, an investment account may be opened not only with a bank, but also with a payment institution, e‑money institution, or investment firm located in an EEA member state. The list of financial assets that may be traded and declared under the investment account system was also expanded as of that date. From the start of 2025 it also includes crypto‑assets traded on MiCA‑licensed platforms.

Accordingly, when completing the 2024 tax return, as an exception, it was possible to declare a securities account that had previously been opened at an investment firm as an investment account, in which case the assets on that account were treated as a deposit into the investment account system. This option no longer exists for the 2025 return. If an account was not declared in this way in 2024, the previous tax return can be amended. The deadline for amending the return for tax year 2024 is 30 April 2028.

Real estate and rental income

Another group of income that must be declared, and which the ETCB is paying particular attention to this year, concerns real estate: real estate sales, rental income, and income earned through platforms (e.g. Airbnb).

  • If your real estate is rented out to a company, the company is obliged to withhold income tax and declare it, so this should appear in your pre‑filled income tax return.
  • You must personally add income earned from renting to other private individuals. If you are renting out a dwelling, you may deduct 20% of that income as a standard allowance to cover expenses, reducing your tax liability. You do not need to incur actual expenses or present supporting documents. However, this deduction does not apply if the dwelling is used for short‑term accommodation, such as via Airbnb – information from such platforms is also accessible to the ETCB.
  • Income tax must also be declared and paid on the sale of real estate, except on the sale of your primary residence. This tax exemption may be used once every two years. However, this exemption cannot be used by individuals who have left Estonia and no longer wish to remain Estonian tax residents. One of the conditions for the exemption is Estonian tax residency, which in turn requires as one alternative that the person’s place of residence is in Estonia. It is therefore important to consider and, if necessary, calculate whether the income tax due on the sale of the property outweighs the consequences of remaining a tax resident of Estonia (i.e. having your worldwide income taxed in Estonia).

Personal income tax return. Real estate sales, rental income and platform‑based earnings are areas of particular attention this year. Sorainen

Some special cases

  • A tax return must also be submitted if Estonian tax residency begins or ends during the year. If the beginning or end of your tax residency has been registered with the ETCB, this is automatically reflected in the tax return. A non‑resident must also file a tax return if they earned certain types of income from Estonia, in particular from selling or renting out Estonian real estate to a private individual.
  • If you discover an error related to previous years while completing the return, this can be corrected. For example, if your investment account balance was not carried forward or you remember income that was never declared. Returns for the last three tax years may be amended, including the return for 2022, which may be corrected until the end of April 2026. If an error affects multiple years, you must start your corrections with the earliest relevant tax return.
  • If the error arises from double taxation, for example, if foreign income tax paid or withheld abroad was not credited in Estonia, the tax return can be corrected by submitting an application to the ETCB within three years of becoming aware of the problem. In these cases it is also possible to correct older returns, not only those of the last three years.
  • A legal heir may file a tax return on behalf of the deceased. This may be useful if the deceased had deductible expenses and might have been entitled to an income tax refund. If the deceased was a sole proprietor (FIE), filing the return on their behalf is mandatory.

Points to consider

Even if not all topics covered in this article apply to you, it is still worthwhile to reflect on a few key questions and pay particular attention to these while reviewing the past year and preparing your tax return:

  • Do I have financial assets, including crypto-assets, and am I already using or could I use the investment account system to manage these?
  • Have I received income from abroad, and has income tax already been withheld or deducted there?
  • Did I move to Estonia or leave Estonia to live permanently elsewhere, resulting in a change to my tax residence status?
  • Have I rented out or sold real estate located in Estonia?
  • Do I have deductible expenses, for example, tuition fees, contributions to the third pension pillar, or income from renting out a dwelling?

The deadline for submitting the personal income tax return is 30 April 2026, which leaves sufficient time to consider all of your last year’s activities and their tax treatment – and to consult an adviser if desired. We would be happy to assist!