22 January 2021



Estonia Estonia
Geographical scope


In 2015, the Estonian Tax and Customs Board approached Uber to establish an automatic earnings declaration system for drivers. Soon after, the initiative was extended to all major platforms active in Estonia including Taxify, Wolt, Autolevi and Estateguru. Drivers can opt-in to share their driving-related earnings directly with the tax office, automatically adding their earnings to their tax return. Further, in 2018, Estonia introduced the Simplified Business Income Taxation Act which simplifies tax duties for part-time self-employed. While it does not explicitly address platform work, it does include platform economy services like transport, accommodation and food delivery. For individuals, income of up to €25,000 per year for services provided to natural persons are taxed at a 20% rate which includes both income and social taxes (compared to the regular tax rate of about 40%).

Scope of the initiative

The automatic business income earnings declaration system is a voluntary system which is integrated with the platform applications.  It allows workers who provide services through platforms to automatically send their business income from the platforms directly to Tax and Customs Board, which then adds the income automatically to the tax declaration form and withholds tax payments. The whole system is automatic and does not require any manual input of data.

Opt-in for the system can take place at any time. The tax authority does not perform specific checks targeted at those providing services through platforms.

During the implementation, platform companies sought to raise awareness around the initiative among platform workers. Information letters were delivered via email and guidance was shared via platform company websites. As the Tax and Customs Board did not know beforehand the contact information of people who work through platforms, it could not directly contact workers. However, the Board supported the platforms in raising awareness about the initiative.

The Simplified Business Income Taxation Act launched a system of Entrepreneur Accounts. The Entrepreneur Account is intended to simplify the tax liability for the payments received for the provision of services from one natural person to another natural person or for the sale of goods to a natural or legal person. By design, to avoid potential abuses, no services can be sold to legal persons through the account. The account can be used for declaring income from various activities performed thorough self-employment, including form platform work.

The business income tax rate is 20% of the total amount received on the entrepreneur account if the amount does not exceed 25,000 euro per calendar year and 40% of the amount exceeding 25,000 euro.

A natural person opens an entrepreneur account in a credit institution or bank who then informs the Estonian Tax and Customs Board of the details of the person who has opened the account. The bank or credit institution is also responsible with transferring the business income tax to the Estonian Tax and Customs Board. The automatic data processing does not require manual entry of the income data. 

A person who has opened an entrepreneur account is not obliged to register as an entrepreneur and to calculate revenues and expenses. The owner of the entrepreneur account cannot be a VAT payer or act as a self-employed person in another form (for example, as a self-proprietor) in the same or similar area of activity.

Scale of the initiative

The take-up of entrepreneur account has been lower than expected. However, around 3,500 accounts have been opened by the end of 2020. According to preliminary 2020 tax declarations, the total income declared via the accounts is €4.2 million in 2020 (€2.1 million in 2019), on which a tax of €860,000 was paid (€440,000 in 2019).

Strengths and weaknesses

The initiatives seek to fight undeclared work by adjusting and simplifying the declaration of income obtained from self-employment.  The initiative also provides a substantial incentive for the self-employed to declare their income through the more favourable tax rate. In the medium term it also contributes to the sustainability of the social security system.

A weakness of the automatic declaration system is that it remains optional which impacts on take-up.  Furthermore, the implementation of the entrepreneur accounts is at the discretion of the banks or credit institutions.  Natural persons with formally active business accounts but no declared income cannot apply for unemployment allowance and services before they have closed the account which might act as a deterrent for take-up.

Additional metadata

Transportation and storage


Eurofound (2021), Estonia Tax and Customs (Initiative), Record number 2970, Platform Economy Database, Dublin,