For many people, the income tax return period is an important time of the year because it reveals whether they can expect a refund of overpaid income tax from the state or whether they will need to pay additional tax instead. The Estonian Tax and Customs Board has started refunding overpaid income tax to those who submitted their declarations electronically and whose data did not require additional verification.

Deadlines for Submitting the Income Tax Return

The declaration of income for 2025 began on February 16, and declarations can be submitted until April 30. Refunds based on electronically submitted declarations started on March 5. Those who submitted their declarations on paper will begin receiving refunds from March 18.

The final deadline both for tax refunds and for paying any additional income tax is October 1. This means that if your declaration shows a tax liability, it is wise to prepare for it in advance.

What Expenses Qualify for an Income Tax Refund?

When submitting your declaration, several deductions are taken into account that may increase the amount of tax refunded. From a person’s total income, it is possible to deduct the general tax-free income, training expenses, donations, and contributions to the third pension pillar.

If a person’s annual income exceeds €25,200, the general tax-free income no longer applies. For people of retirement age, a higher tax-free income applies, amounting to €9,312 per year. In 2025, the income tax rate was 22%, and the same rate also applies this year.

The Third Pension Pillar Can Bring a Significant Refund

One of the most common sources of tax refunds is contributions to the third pension pillar. The state refunds 22% income tax on contributions made to the third pillar, provided that the payments do not exceed 15% of a person’s annual gross income and are not higher than €6,000 per year.

For example, a person who contributed €6,000 to the third pension pillar in 2025 and whose income allows the deduction could receive €1,320 back. In most cases, these contributions are automatically reflected in the tax declaration. However, payments made during the last days of the year may not always appear immediately. In such cases, it is worth checking whether they need to be added to the declaration manually.

Refunds for Donations and Training Expenses

In addition to pension contributions, donations and training expenses can be deducted from taxable income up to €1,200. From this amount, it is possible to receive up to €264 back in income tax, provided the person has sufficient taxable income.

For training expenses to qualify, the education provider must have the appropriate license or a registered economic activity notice. In the case of donations, the recipient must be included in the list of organizations eligible for income tax benefits. It is advisable to verify these conditions before submitting the declaration.

Real Estate Sales and Income Tax

When submitting a tax declaration, it is also important to pay attention to real estate transactions. If profit is made from selling property, income tax must generally be paid on the difference between the purchase price and the sale price.

For example, if a property was purchased for €20,000 and later sold for €50,000, the profit would be €30,000, on which 22% income tax must be paid.

At the same time, the taxable income can be reduced if the seller has documentation of expenses related to improving the property. These may include renovation work, installing a new roof, or other documented investments that increased the property’s value.

How to Use Your Tax Refund Wisely

A tax refund can be a good opportunity to improve your financial situation, cover larger expenses, or make plans for the future. For some, it may mean finally taking care of long-postponed household expenses, while for others it may help save for a down payment on a car or a home.

In such situations, it is also worth considering your next financial steps as a whole. If the tax refund alone does not cover all the necessary expenses, a suitable financial solution can help you reach your goals faster.

Laen.ee offers flexible options for different needs. A customer loan is well suited for larger everyday expenses, home renovations, training, or other important purchases. A car loan can help if you want to replace your current vehicle with a newer one or buy your very first car. A real estate loan is a good solution for those planning to buy, build, or renovate their home.

If the tax refund you receive from your income tax declaration gives you a small additional financial boost, it may be the perfect moment to start turning your bigger plans into reality. Laen.ee helps you find a solution that matches your possibilities and goals.