🇪🇪 Tax3 Dec 2025
Estonia cancels the rise to 24%: tax on distributed profits stays at 22% in 2026
Estonia's Parliament adopted amendments on 3 December 2025 cancelling the planned rise in the income tax rate from 22% to 24% from 2026. Corporate income tax on distributed profits stays at 22/78 of the net distribution, and no new tax on annual company profits is introduced.
In June 2025 Estonia had replaced its planned security tax with a two-point rise in income tax from 2026.
What changed
- The rise from 22% to 24% is cancelled for both personal and corporate income tax.
- Distributed profits remain taxed at 22/78 of the net amount distributed.
- The 2% tax on company profits planned under the security tax is not introduced.
- The amendments take effect once proclaimed by the President and published in the State Gazette.
Who is affected
Estonian companies and groups planning distributions in 2026.