--- title: What's new in the tax law for the new tax year? date: 2017-09-07T11:08:47Z modified: 2018-05-18T11:26:44Z permalink: "https://grow.ee/mida-uut-toob-maksuseadus-uuel-maksuastal/" type: post status: publish excerpt: A good accountant is always up to date with all the changes in their field, and tax laws are one of the most important areas. Like anything else, this field is not static, and the 2017-2018 tax year will bring a lot of changes. wpid: 4663 timestamp: 2018-05-18T11:26:44Z tags: - Accounting --- A good [accountant is always up to date](/?p=470) with all the changes in their field, and tax laws are one of the most important areas. Like everything else, this area is not static and **the 2017-2018 tax year will bring a lot of changes** – the arrival of the new government brought more changes than before. You can read about what you need to take into account in 2017 and 2018 below. ## How tax law will change in 2017 and 2018 VAT and income tax laws and social tax are a fairly broad area and it is naturally not possible to give a detailed overview of everything that is changing in one blog post. However, some aspects can also be highlighted in this form: - **increase in tax-free income** – if in 2017 tax-free income increased from 170 euros to 180 euros, then from 1 January 2018 tax-free income will already be 500 euros per month. However, it must be taken into account that if a person's earned income in one month exceeds 1,200 euros, this **tax-free income amount will gradually decrease**; - **change in the taxation of sickness benefit** – an employee's first three working days are still unpaid in the event of illness, but companies that still compensate their employees for the 2nd and 3rd working days will be able to do so **in the future without paying social tax**; - **taxation of dividends** – dividends distributed from 2018 profits can be paid at the income tax rate of 14% instead of the previous 20%. Thus, for the first time, the 14% income tax rate can be applied starting in 2019, after the approval of the 2018 annual report. But here too, there is a catch – this is only if the **recipient of the dividends is a legal entity and they are paid regularly**; - **changes in the taxation of company cars** – the current tax law will change significantly and, among other things, so-called mixed-use company cars will have to pay a fringe benefit tax depending on the car's power (kW). In addition, for example, the use of a car only for work trips must be registered with the Road Administration. VAT can only be fully deducted if the car has not been used for private purposes for 2 consecutive years; - **Employee accommodation is no longer a fringe benefit** if the employee's place of residence is more than 50 km away. The following limits must be taken into account in relation to accommodation costs – 200 euros in Tallinn and Tartu, 100 euros per month elsewhere; - **entrepreneur account** – simplifies the administration of smaller companies providing services, as the 20% tax is simply withheld from all transactions and there is no major bureaucracy. However, it is worth thoroughly explaining the nature of the entrepreneur account in advance so that you do not find yourself in a situation where you discover that the tax burden is much higher. A business account is definitely not suitable for selling goods. ## How to keep up with all the changes? Keeping up with everything that changes from year to year can be troublesome and often expensive for an accountant. However, Grow accountants are always up to date with all the changes and when ordering a service from us, you don't have to worry about the issues arising from changes in tax law. We will also carry out all the necessary communications with the Tax Board so that you don't have to worry about anything. For a more comprehensive overview, we recommend attending the Grow morning coffee on September 27. The Grow morning coffee is free for customers. Registration and additional questions at