The Ministry of Finance said the proposed rules are too complex and costly, and the country seeks a solution acceptable to all parties.
Estonia did not approve the proposed amendments to the minimum tax rules presented under the OECD silent procedure on the Pillar 2 Side-by-Side System Package. The country is seeking a solution acceptable to all parties.
This announcement was made by the Ministry of Finance (MoF) on Wednesday, 10 December 2025.
Estonia says that the OECD’s proposed minimum tax framework is technically complex and would create a disproportionate administrative burden for both businesses and the tax authority. This burden would be particularly heavy in countries with few multinational headquarters. Analyses indicate that the minimum tax would not generate sufficient revenue in Estonia to justify the costs of implementation.
“We have not considered this initiative suitable for Estonia from the very beginning, and even less so now, when the United States, who initiated this effort, has declined to implement it themselves. It would not bring revenue to the budget, but it would bring substantial bureaucratic costs. I told my US colleague when asked that we do not want anything other than what they want for themselves,” said Estonian Minister of Finance Jürgen Ligi.
The Estonian government has prioritised the simplification of the business environment. The proposed OECD solutions, however, are seen as moving in the opposite direction and conflicting with Estonia’s principles of a simple and efficient tax system. Consequently, Estonia cannot approve these rules while there remains an obligation to incorporate them into national legislation.
Estonia emphasises that countries must have the option to decide whether and when to implement the minimum tax, with sufficient preparation time, as the rules are still evolving and require further clarification. Although negotiations have made substantial progress, a solution addressing Estonia’s main concerns has not yet been reached.
Currently, Estonia benefits from a derogation in the EU minimum tax directive, allowing the postponement of implementation until 2030. The government is seeking an extension of this derogation. Last week, Minister Ligi also sent a public letter to the European Commission underlining these concerns.
Earlier, Estonia called for EU flexibility on the Pillar 2 global minimum tax, stressing small states’ right to decide implementation.
