Changes in law 2017

Exemption of employee transportation costs from fringe benefit tax

The transport costs of an employee under an employment contract between the place of residence and the workplace are exempted from the fringe benefit tax if the employee's place of residence is at least 50 km from the workplace or if the employer organizes employee transportation by bus or at least a two-seated vehicle.

Exemption of employee accommodation costs from fringe benefit tax

The accommodation costs of an employee under an employment contract, if the employee's place of residence is at least 50 km from the workplace and the employee does not own immovable property usable as a residence closer to the workplace. An employee meeting these requirements can be accommodated tax-free in Tallinn and Tartu in the amount of EUR 200 per calendar month, and in other places of Estonia in the amount of EUR 100 per calendar month.

Disabled employees’ medical devices are partially tax-exempt

Fringe benefits do not include the costs incurred to provide a disabled employee with medical devices in the amount of 50%% of the social tax paid on the employee during that year.

Employment of minors is simplified

Until 30.06.2017, an employer of a minor (from 7 to 14 years old) was required to submit a separate document to the labor inspector applying for the latter's written permission, but starting from 01.07.2017, the employer must register the employment in the Employment Register at least 10 working days before the start of employment. The consent of the minor's legal representative, working conditions and information on whether the child has school obligations or not, must also be entered in the register.

Share options become tax-exempt

Henceforth, if an employee realizes a share option, or acquires a part of the company before 3 years from the issuance of the option has expired, the employer does not have to pay fringe benefit tax on proceeds from the realization.

If realization takes place earlier, for example after 2 years, 1/3 is taxable and 2/3 are tax-free.

Fringe benefit tax does not have to be paid on realization of the option in case of sale of the whole company or the employee’s incapacity for work or death, either. If the option contract is not digitally signed or notarized, the employer must submit a copy of the contract to the Tax and Customs Board so that the date of the option can be monitored. The Tax and Customs Board must be notified within 5 working days.

Share options become tax-exempt

Customer service at court registry and land registry departments is terminated from 01.07.2017. Henceforth, records and dossiers can be accessed at a notary's office or online using the e-service.