Basic tax exemption represents the part of income that is not
subject to income tax. Estonia applies different basic exemption
rates on citizens that have reached the pensionable age and to
those who are to reach it within a year. For people at pensionable
age the tax exemption remainsunchanged for 2025 and 2026 set at
9,312 euros per year (776 euros /month). For the rest, the basic
exemption in 2025 will be up to 7,848 euros per year (654
euros/month) increasing in 2026 to 8,400 euros per year (700
euros/month).
Key Reform Effective From 2026
A significant reform takes effect in 2026: the basic exemption
will become a fixed amount, no longer decreasing as income grows.
This means that regardless of a person's total annual income,
the full exemption of €8,400 per year will apply, simplifying
the system and providing greater predictability for taxpayers.
