Estonia’s new coalition government, formed by Prime Minister Kristen Michal, has published details of the Coalition Agreement 2024-2027, which was approved on 22 July 2024. One of the key tax measures proposed in the agreement is the introduction of a security tax that will be in effect until 31 December 2028.
The tax revenue will be used to fund the development of Estonia’s defence capabilities and security investments.
The security tax will be phased in as follows:
- 2% of turnover starting 1 July 2025
- 2% on personal income starting 1 January 2026
- 2% on company profits starting 1 January 2026
Additionally, the previously approved increase in the tax-free income amount for individuals, from EUR 7,848 to EUR 8,400, will be delayed from 1 January 2025, to 1 January 2026.
The new coalition agreement aims to ensure that Estonia remains a well-protected member of NATO and the European Union, providing a safe environment for investments. The government also plans to boost the innovation capacity of the Estonian economy through stable funding of research and development.