Government Makes VAT Hike Permanent, Scraps Temporary Defense Tax for Stable Revenue

• VAT will increase to 24 percent in July and become permanent
• The temporary defense tax is scrapped
• 2 percent levy on corporate and income tax is removed
• Current VAT rate of 22 percent will rise to 24 percent on July 1
• Income tax rate will increase to 24 percent in 2026
• Entrepreneurship account tax rate will rise to 22 percent next year
• Tax changes aim to reduce burden for individuals and businesses
• Companies will pay income tax only on distributed profits
• Planned 2 percent tax on company profits in 2026 is cancelled
• Avoided IT development costs for security tax implementation

Source:

• news.err.ee
• valitsus.ee

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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