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Estonia/ 5.1 General legislation  

5.1.5 Tax laws

As was noted in chapter 5.1.3, legislation on alcohol, tobacco and gambling taxes, and excise duties earmarks a fixed percentage of this income for two governmental arm's length bodies, the Council of Gambling Taxes and the Cultural Endowment of Estonia. These two bodies grant money for cultural purposes, the former one also for other social purposes (see also chapter 8.1.1 and chapter 8.1.3).

Registered non-profit organisations (NPOs), including those active in the cultural field, have the right to apply for a special status that allows private enterprises to deduct donations from their taxable income to an amount not exceeding 3% of the total payments subject to social tax (except fringe benefits), or 10% of the profit made in last year. A private individual making such donations may deduct a sum that does not exceed 5% of his or her taxable income. This is similar to the status given to churches and religious associations, political parties, state-run universities, and governmental bodies. It should be noted however, that not many NPOs and potential donors are aware of this possibility and that the Ministry of Finance who decides upon granting this status has not clearly announced its criteria of decision-making.

Since 2009, the general Value Added Tax (VAT) is 20%. However, according to the relevant Law, VAT on books and periodicals is 9% and teaching materials are exempt from VAT altogether.

Chapter published: 13-10-2014

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