On 27 September 2026, the Ministry of Finance released an updated draft amendment to the Personal Income Tax (PIT) and Corporate Income Tax (CIT) Acts, signaling a significant policy shift. The new version withdraws previously proposed increases to the lump-sum tax (ryczałt) rates for certain business activities and maintains the abolition of the Estonian CIT regime for companies that fail to meet the substantive activity requirements. Additionally, the draft introduces a grace period for taxpayers who missed formal requirements for interim financial statements, allowing them to rectify documentation without losing the right to apply the lump-sum regime. These changes reflect the government’s response to business community feedback during the consultation process.
Key Takeaways
- Lump-Sum Rate Stability: The previously planned increases for ryczałt rates on selected services (e.g., IT, consulting) have been scrapped, providing certainty for small entrepreneurs and freelancers who rely on the simplified regime.
- Estonian CIT Abolition Preserved: Companies that cease to meet the conditions for Estonian CIT (e.g., passive income exceeding 50% of revenue) will still be automatically switched to classic CIT, but the transition rules have been softened to avoid retroactive taxation of undistributed profits.
- Remedial Window for Financial Statements: Taxpayers who failed to attach the required interim financial statement to their tax return can now submit it within 30 days of the regulation’s entry into force without penalty, preserving their lump-sum eligibility for the current tax year.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement