Law Changes 2017

Employee transport costs exempt from fringe benefit tax

Transport costs between home and workplace for employees working under employment contracts are exempt from fringe benefit tax if the employee's residence is at least 50 km from the workplace or if the employer organizes transport for employees by bus or a vehicle with at least two seats.

Employee accommodation costs exempt from fringe benefit tax

Accommodation costs for employees working under employment contracts are exempt if the employee's residence is at least 50 km from the workplace and the employee does not own real estate used as housing closer to the workplace. Tax-free accommodation is available up to EUR 200 per calendar month in Tallinn and Tartu, and up to EUR 100 per calendar month elsewhere in Estonia.

Assistive devices for disabled employees partially tax-free

Expenses for providing assistive devices to disabled employees are not considered fringe benefits up to 50% of the amount subject to social tax paid to them during that year.

Hiring minors simplified

Until 30.06.2017, employers hiring minors (ages 7-14) had to submit separate documentation to the labor inspector requesting written permission. From 01.07.2017, the employer must register the employment in the Employment Register at least 10 working days before the start of work. The register must include the consent of the minor's legal representative, working conditions, and information about whether the child is subject to compulsory school attendance or not.

Share options become tax-free

Going forward, if an employee exercises a share option, i.e., acquires a share in a company before 3 years have passed since the option was granted, the employer does not have to pay fringe benefit tax on the income received from the exercise.

If the exercise occurs earlier, for example after 2 years, 1/3 is taxable and 2/3 is tax-free.

Fringe benefit tax also does not apply when exercising the option in case of sale of the entire company, or the employee's incapacity for work or death. If the option agreement is not digitally signed or notarially certified, the employer must submit a copy of the agreement to the Tax and Customs Board so that the date of the option grant can be tracked. The deadline for notifying the Tax and Customs Board is 5 working days.

Registry department customer service ends

Customer service at registry and land registry departments located at courthouses ended from 01.07.2017. Going forward, registry and file data can be accessed at notary offices or online via e-services.