Estonia begins unwinding the 2% tax surcharge everyone expected to be permanent

Estonia’s government has moved to remove the corporate-profit element of the 2% tax surcharge that came into force on 1 January 2026, with legislation starting through the Riigikogu in May. The personal-income-tax rate has been confirmed as staying at 22% rather than rising to the previously-planned 24%. Both changes together represent a faster reversal than most observers anticipated – when the 2% package was introduced, it was widely treated as a permanent shift in Estonian fiscal policy.

Why this matters

The 2% surcharge directly affected e-residents whose Estonian companies pay board fees, and Estonian-resident employees of e-resident companies. For the international e-residency community – including many digital nomads and location-independent founders operating through Estonian OÜs – the surcharge added cost and complexity to a tax setup that had been one of Estonia’s strongest competitive advantages.

The fact that Estonia is moving to remove the corporate-profit element this quickly signals that the government recognises the competitive damage. For e-residents who weighed switching jurisdictions when the 2% landed, the unwinding may change the calculation again – although the personal-income-tax holding at 22% rather than rising to 24% is also a meaningful signal. Anyone running an Estonian OÜ should review their 2026 tax planning with their accountant once the exact scope of the unwinding is confirmed.

What to watch: the specific scope of the legislation as it moves through the Riigikogu – which element of the 2% package is being removed first, and on what timeline. Verify against the Estonian Tax and Customs Board (EMTA) before acting on planning changes. The April-September legislative window will determine when changes take effect.