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Automatic tax reporting and taxation becoming a reality: first bank to offer enterpreneurship accounts for Estonia’s natural persons

LHV bank is the first bank that in cooperation with Estonian Tax and Customs Board started a unique service that enables natural persons to start using an enterpreneurship account. The new type of bank account makes reporting, accounting and paying the taxes fully automatic.

„92 per cent of people think of paying taxes as their obligation as a citizen and our task is to support people’s tax performance and willingness to pay taxes in general,“ the head of Tax and Customs Board Valdur Laid said.

As the new type of account can be used by natural persons, this means that for small-scale business activities, having a company is not needed any more. The funds received to the enterpreneurship account are automatically taxed at a rate of 20 per cent. If annual income received to the account exceeds € 25,000, the rest is taxed at a 40 per cent rate. The total sum received cannot exceed € 40,000 annually.

The new solution is most suitable for people who offer services that do not include making considerable expenses or in case the expenses are covered by the client directly – for example, home aids, artists, people selling homegrown food, etc. It could also be used in case of offering services in the shared economy, such as for income received being a Taxify or Uber driver.

The account can be used in the same way you use a regular bank account.

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