Estonia Parliament Approves New Tax to Cover Defense Spending

Estonia’s parliament approved a new 2% tax Wednesday to cover higher defense and security spending amid the ongoing Russia-Ukraine conflict.

The so-called security tax will be charged on both corporate and personal incomes, including incomes of permanent establishments of nonresident companies and taxable incomes received in Estonia by nonresident natural persons.

The tax will be in effect from Jan. 1, 2026, through 2028.

• In addition, the standard value-added tax rate of 22% will be raised to 24% between July 1, 2025, and the end of 2028.
• The government estimates the tax will generate an additional 751 ...