Increased Tax-Exempt Limits

Several tax-exempt limits in Estonia increased from January 1, 2025, providing greater flexibility for businesses and employees.

Key updates include:

• Compensation for Personal Car Use – The tax-exempt rate increased to €0.50 per kilometer, with a monthly limit of €550.

  
  

• Daily Allowance for Business Trips Abroad – Employees are now eligible for a tax-exempt allowance of €75 per day for the first 15 days of a business trip, followed by €40 per day thereafter.

  
  

• Employee Health Promotion Expenses – The €400 annual tax-exempt limit is no longer divided into quarterly allocations, allowing for more flexible use.

  
  

• Accommodation Expenses for Employees – The tax-exempt limit for employees living away from their primary residence increased to €500 per month in Tallinn or Tartu, and €250 per month in other regions.

  
  

• Promotional Gift Threshold – The tax-exempt threshold for promotional gifts increased from €10 to €21 (excluding VAT).

  
  

• Representation Cost Limits – The monthly tax-exempt limit for representation expenses increased from €32 to €50.

  
  

• Tax-Exempt Benefits for Nonprofits – Nonprofit organizations can now provide €85 per participant in tax-exempt souvenirs at youth camps and sports events.

  
  

These changes enhance financial flexibility for organizations and employees, reducing administrative constraints and optimizing tax-exempt benefits.