Under Estonian tax law, companies are allowed to deduct expenses that are directly related to their actual business operations. These include costs necessary for generating business income or maintaining and developing the company’s activities.
Common deductible expenses include subcontractor fees, professional and support services, relevant software and hardware (subject to some restrictions), and marketing costs. Business trips are also deductible, but only transportation and accommodation are allowed—daily allowances or meals are not covered unless fringe benefit taxes are paid.
You can also deduct costs related to participation in professional events, job-related training, communication services (excluding private mobile phone bills), and office supplies. Bank fees, transaction costs, and salaries are deductible as well, although salary payments and certain fringe benefits are subject to specific taxes.
Even some expenses like business lunches or gifts can be recorded, but they’re considered taxable under fringe benefit rules.
In summary, if an expense serves a clear business purpose and complies with Estonian tax rules, it is likely to be deductible—though some categories may trigger additional tax obligations.
If you’re uncertain whether an expense qualifies as a business expense, make sure to ask us via [email protected] beforehand.