Crypto assets are considered financial assets in Estonia, and profits from transactions by private individuals are declared and taxed with income tax 22% (Section 15(1) and Section 37(1) of the Income Tax Act).
1. Private transactions
Taxable transactions
Cryptocurrency trading, exchange for euros or another cryptocurrency.
Paying for goods or services with cryptocurrency – if the purchase transaction results in income, i.e. the value of the goods or services received is greater than the purchase price of the virtual currency used.
Mining income – cryptocurrency mining is a business and is treated as a commodity for tax purposes. Mined cryptocurrency is taxed upon its transfer, i.e. when the cryptocurrency is converted into regular currency, exchanged for another cryptocurrency, or consumed.
Accounting and declaration
Profit is calculated on a transaction-by-transaction basis as the difference between the selling price and the buying price of the cryptocurrency, or as the difference between the price of the asset received upon exchange and the buying price of the cryptocurrency being exchanged.
Only those sales or exchange transactions that resulted in a profit need to be declared. Transactions with a loss are not taken into account. Transactions are declared in the income tax return.
Platform fees that are documented are also considered acquisition costs.
If there have been a large number of transactions during the year, the MTA allows profitable transactions to be declared as a total amount. However, transaction-specific records must also be kept in a readable form, on the basis of which the declared amount was formed. Upon request, this will be submitted to the MTA for verification of transactions.
Staking and interest income are declared in tables 5.1 II or 8.1. Staking means locking cryptocurrencies on the blockchain to support network security and transaction confirmation. In return, the user earns rewards similar to interest income.
3. Comparison: regular rules vs. investment account
|
Transaction |
Normal (without IK) |
Investment account (from 2025) |
|
Bitcoin buying and selling |
You buy €20,000, you sell €25,000 |
Taxed only if withdrawal is made in euros |
|
Cryptocurrency exchange |
The profit from the transaction is taxed. |
Transaction is income tax-free as long as it is held in the IK |
|
Unprofitable exchange |
Transaction losses are not taken into account |
Losses can be offset against profits in IK |
|
Staking/interest |
Declared as income |
May fall under the IK regime – taxation is postponed |
4. Corporate crypto transactions
Companies do not have to pay income tax on every crypto transaction, but the company is only taxed when profits are distributed (e.g. as dividends).
Purchases, sales, and mining made with cryptocurrency are recorded in the accounts, but income tax is only paid when profits are distributed.
Dividends are declared on the TSD form, Appendix 7. The declaration is submitted by the 10th of each month. Dividends are not allowed to be paid out if the company has unpaid share capital or if the profit has not been confirmed.
Kokkuvõte
Private individuals (without IK): each profitable crypto transaction is taxed with income tax 22%, losses cannot be taken into account and are declared in tables 6.3/8.3 of the income tax return.
Private individuals (via IK): from 2025, profits can be deferred, losses can be offset, income tax is paid only upon payment in euros, a service provider that meets the requirements of the regulation and IK declaration in box 6.5 are required.
Companies: crypto transactions are recorded in accounting, taxed only when profits are distributed (e.g. dividend), declaration on monthly TSD Appendix 7.