Tax amendments in 2023
Basic income tax exemption to increase
The government has initiated amendments to the Income Tax Act to increase the basic income tax exemption for private individuals and to extend the tax exemption on donations to Ukraine.
The annual basic exemption will rise from 6,000 euros to 7,848 euros, i.e. an individual’s monthly tax-free income will increase from 500 euros to 654 euros. The annual income threshold at which the basic exemption will start to decrease remains the same, i.e. 14,400 euros. An individual whose annual income exceeds 21,200 euros is not entitled to a basic exemption, except old-age pensioners, who, as from 1 January 2023, are entitled to a monthly basic exemption of 704 euros, regardless of the size of their income.
As the war in Ukraine continues, the bill extends, for 2023, the tax exemption on the donations made by Estonian resident legal entities to help preserve Ukraine's territorial integrity and sovereignty and provide humanitarian aid for the Ukrainian people. The exemption will apply only to donations to organisations listed in the Income Tax Act.
The amendment is expected to take effect on 1 January 2023
Suspended contributions to the funded pension scheme to be disbursed in 2023
The government has initiated a bill to amend the Funded Pensions Act. The bill will accelerate the disbursement of the 4% state contributions suspended between 1 July 2020 and 31 August 2021. Instead of January 2024, as initially planned, the disbursement will be completed by the end of 2023.
The amendment is expected to take effect on 1 January 2023.
Reporting requirements for digital platform operators
In 2023, a new chapter will be added to the Tax Information Exchange Act concerning the automatic exchange of information about digital platforms. Platform operators will be required to collect certain information about the sellers and service providers on their platforms and report it to the tax authority. The new provision aims to ensure the proper taxation of income earned through online platforms.
The amendment is expected to take effect on 1 January 2023.
Amendments to the Aliens Act
The parliament is debating a bill to provide a legal basis for the revocation of residence permits and visas for those who express public support for Russia's war of aggression in Ukraine.
A foreign person who publicly supports Russia’s war in Ukraine will be refused a long-term or temporary residence permit or a long-term visa to Estonia, their current residence permits will be revoked, and they will be required to leave Estonia.
The amendment will take effect on the tenth day after publication in the Riigi Teataja.
Amendments to the Occupational Health and Safety Act
Amendments to the Occupational Health Safety Act took effect on 19 November 2022, with the aim of increasing clarity for employers and employees in complying with occupational health and safety requirements in remote work (teleworking).
An employer whose employees work remotely has several obligations, including assessing the risks to employees’ health. The risk assessment must consider the nature of work, the workplace, the use of work equipment and work organisation. The employer may discuss the risks with the employee, prepare a risk assessment questionnaire, or assess risks based on photos, video recordings and other documents. The employer must prepare a risk assessment report and apply measures to avoid or mitigate potential risks
and health hazards.
Another important responsibility of the employer is to instruct employees before granting permission for remote work, i.e. explain the hazards relating to the working environment, health risks and measures that should be taken to prevent damage to health. Depending on the nature of the work, the employer may
need to explain safety requirements relating to the work or work equipment, ergonomic working positions and methods, personal protective equipment, electrical and fire hazards and measures to avoid environmental pollution. After receiving the instruction, employees must be able to identify and mitigate potential risks.
In addition, the employer must ensure proper work equipment for the performance of duties, pay sickness benefits if the employee falls ill and organise health checks also for remote workers.
Along with the employer’s obligations, the amended act specifies the rights and obligations of remote workers. As the employer cannot ensure safety at all workplaces used for remote work, the responsibility
for ensuring a safe working environment falls primarily on remote workers themselves, who must create a safe workplace based on the employer’s instructions.
The employer is responsible for investigating occupational accidents and diseases also in case of remote work. If a remote worker’s injury has been caused by the breakage of work equipment, it will be considered an accident at work. If, on the other hand, the worker was injured while doing household duties, it will not
be regarded as an occupational accident, even if it occurred during working hours. In any case, the employee must inform the employer of all work-related accidents.
