Estonia, Financial Services, Legislation, Taxation, Wages
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Saturday, 27.04.2024, 03:54
Estonian government approved tax refund system for low-income people
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The draft is part of a broader government plan to increase the incomes of working people and revive the economy.
According to the bill, in 2017 the refund can be applied for by individuals whose income is less than 7,782 euros in 2016. There are forecast to be 103,600 such people. The refund can be applied for by an adult person who has worked full-time for at least six calendar months in the preceding year.
The refund amount will depend to a significant extent on earned income, income structure and the number of months worked. Therefore, the refund is different for each person.
For example, if a person works full-time in 2016, his salary is 410 euros a month, and he gets no other income and uses no other tax-exemptions besides tax-free income, his projected refund is 45 euros per month worked month, or nearly 540 euros a year.
The refund is the biggest for someone earning a monthly gross wage of 480 euros (59 euros per month), then it starts falling and reaches zero at a gross monthly wage of 649 euro.
The law is scheduled to enter into force on 1 January 2016.
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