Estonia, Financial Services, Legislation, Markets and Companies, Taxation

Grete Urbel, head of the personal income and taxation service at the Tax and Customs Board, said that the number of users of business account has risen by almost one thousand people this year and the amount of money received into the accounts has grown to over five million euros, compared with two million euros at the end of last year.

Urbel described business account as the simplest option for private individuals engaging in small-scale business to pay their taxes correctly, as it doesn't require the registration of employment, filing of accounting reports, monthly tax declarations, or separate payment of taxes. 

The business account is ideally suited for people who provide services or sell products to other individuals which do not entail major costs for their provision or manufacture. A business account is well suited for nannies, people doing refurbishment and home improvement work for other individuals, but also drivers working based on a ridesharing platform.

"When we came up with the business account, we knew it would be a much-awaited service," Kadri Kiisel, head of retail banking at LHV, said, adding that the favorable and simple platform for engaging in enterprise has proved very popular.

Statistics by LHV shows that a business account is used slightly more by men than by women, or respectively by 56% and 44%. The average user of a business account is aged 39, and people having a business account at LHV live, aside from Estonia, also in Finland, Turkey, Vietnam, Spain, Lithuania and France.

The money paid into a person's business account is taxed with a rate of 20%, and with a rate of 40 percent if the amount received exceeds 25,000 euros per year. The account cannot be used if the amount earned by the person is bigger than 40,000 euros per calendar year.