Working under the table will become legal in Estonia!
Working under the table i.e. doing small jobs as a private person? From 2018, it’s possible to pay income tax from odd jobs legally and conveniently!
Starting from 1.01.2018 a new so-called unreported employment tax law will take effect. It essentially means that income declarations will become less bureaucratic and all you need to have is a separate business bank account. The communication between the bank and the Tax and Customs Board will make sure that the correct amount is withheld from said account. Even though a business account can be opened by a person who hasn’t registered as a self-employed person, they should keep in mind the following:
tax rate for yearly income up to 25 000 euros is 20%;
tax rate for yearly income up between 25 000 – 40 000 euros is 40%;
according to the VAT law that will take effect on 1.01.2018, if your yearly income surpasses 40 000 euros, you must register yourself as a VAT payer;
to receive health insurance, the monthly income on your business account must be at least 1300 €.
If you want to “come out” with your business, you should consider the potential profit and which business models suit you best.
NJORD’s Lawyer Anne-Lii Kask will advise you on further questions related to business accounts and choosing a business model.