Estonia: Increased excise tax rate for tobacco products in 2021

Estonia: Increased excise tax rate for tobacco products

The rate of excise tax (duty) on cigarettes and certain tobacco products increased beginning in 2021. Other excise rates remain unchanged.

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The excise tax on tobacco e-liquids had been suspended for two years but is scheduled to be effective 1 April 2021 and will remain in effect until 31 December 2022.

In other news:

  • Estonia’s Supreme Court held that while the statutory authority of a member of a company’s management board ended before the due date for remitting taxes, the board member nevertheless was still responsible for determining that the company paid the tax. In this matter, the board member withdrew funds from the company’s account—money that was to have been used to pay the tax—and the board member was not able to prove that the money was used for business purposes. The tax authority made a liability determination holding the board member liable for the performance of the taxpayer’s tax obligations, and the high court upheld this determination.
  • Beginning 1 January 2021, non-resident employers that “hire out” temporary workers to an Estonian enterprise, for work in Estonia, must register and also must withhold and declare all labour taxes from the salary paid to the non-resident temporary workers.

Read a January 2021 report prepared by the KPMG member firm in Estonia

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