The highest wages in the ICT and finance sector

Wage growth remained relatively rapid and broad-based in the fourth quarter. Statistics Estonia’s wage data showed a slowdown in the annual growth rate of the full-time-equivalent average gross wage (+6.4%, over the year) in Q4 2019, mostly due to a high base effect of Q4 2018.

Tax Authority’s data on the median wage showed a continuously rapid wage growth of +9.0%, over the year. The average inflation-adjusted net wage increased by 3.5%, over the year.

Wage growth in the public sector (education, health care, public administration) exceeded wage growth in the private sector.

Private sector, exposed to global competition, has found it harder lifting its labour costs as rapidly. Among different sectors, the average wage was still the highest in the ICT and finance, which also saw solid growth rates in 2019.

As export demand and Estonia’s economy are expected to grow at a slower pace this year, demand for labour should ease, at least in the exporting industry. So, wage growth should moderate, from very high levels (from 7.4% in 2019 to 6.5% in 2020 and 5.5% in 2021). Wage growth in the public sector should also soften, according to the 2020’s budget.

Source: Swedbank

Commercial registers of Estonia, Finland starting on data exchange

Secretary-general at the Ministry of Justice, Tõnis Saar, and director general of the Finnish Patent and Registration Office, Antti Riivari, signed an agreement on Tuesday on the exchange of data between the commercial registers of Estonia and Finland from here on in.

Under the agreement, Estonia and Finland will open their commercial registers for a data exchange that includes all the information typically sent to the authorities of their own country.

On the Estonian side, the authority thus gaining access is the Tartu County Court’s department of registers, and on the Finnish side the Patent and Registration Office. Only individuals tasked with processing the data and who need it for the performance of their daily duties will have access to the information of the other side, and no data will be forwarded to third parties, the ministry said in a press release.

The preparations for the launch of the automatic data exchange have been completed, the x-Road systems of Estonia and Finland have been linked and the proper functioning of services has been tested, the ministry added.

In May 2016 the prime ministers of both countries signed a joint declaration on data exchange and exchanges of e-services between Estonia and Finland. A similar exchange is already ongoing between the Estonian and Finnish tax authorities.

Source: ERR News

Estonian tax inflow in 2018

While the inflow of tax money into the Estonian state budget in 2018 was consistent with the Ministry of Finance’s expectations, receipts of excise duty on alcohol, tobacco and fuel, meanwhile, remained below the budgeted amount.

The sum total of tax receipts in 2018 exceeded the budgeted amount by 0.4%, growing 8.7% compared to the previous year.

The inflow of social tax amounted to €3.06 billion in 2018, exceeding the budgeted amount by 3.9%. The €115 million surplus is attributable primarily to growth in employment and average wages, which was swifter than projected.

Personal income tax was paid in the amount of €311.1 million, exceeding the budgeted amount by 66.2% and marking a surplus of €124 million.

Corporate income tax was paid in the amount of €517.9 million, accounting for 91.7% of the budgeted amount.

€2.33 billion, or 99.8% of the budgeted amount, was received in VAT, marking a 8.5% increase compared to the previous year.

Read more from ERR News


Airbnb to cooperate with tax authority

Online accommodation and hospitality marketplace Airbnb is to share user data with the Estonian Tax and Customs Board (MTA), according to the Baltic News Service (BNS).

An MTA spokesperson confirmed to the BNS that the cooperation is underway and that further details will be made public on Wednesday, at a press conference to be attended by MTA deputy director Rvio Reitmann and Airbnb head of public policy, Patrick Robinson.

The Estonian Association of Hotels and Restaurants (EHRL) had previously stated that Airbnb represents unfair competition and encourages a hidden economy in the sector. It demands that Airbnb income be taxed as is the case in neighbouring Finland.

The EHRL has also blasted plans for a one-euro-per-person-per-day tourist tax applicable in Tallinn only, as proposed by Tallinn city council chief Mihhail Kõlvart (Centre).

Since 2016, an individual submitting a tax return has been required to confirm receipt/non-receipt of rental income. Such income is subject to tax on a gross basis.

At press time, a quick search on the Airbnb site for accommodation for one adult in central Tallinn on the weekend of 7-9 December yielded over 200 results, ranging in price from €9 to over €100 per night. Searches in Tartu and Pärnu resulted in about 50 and 200 options respectively, in a similar price range.

Source: ERR News

Important legal amendments entering into force in 2017

Changes in taxes. People on low income can apply for income tax rebate. The application for a rebate must be submitted with the personal income tax return to the Tax and Customs Board and the rebate will be paid by 30 June. The Tax and Customs Board will pay the rebate on the basis of the income earned in 2016 to the people on low income who comply with the conditions.

Approximately 100,000 adults whose annual income was less than 7,818 euros, i.e. up to 651 euros per month, and who worked full time for at least six months in 2016 meet the conditions. The full-time work requirement does not apply to people whose capacity for work is reduced. The amount of the rebate is up to 709 euros, but not more than the income tax paid in 2016.

Employers will be given the opportunity to also pay employees compensation free of social tax on the basis of a sick leave certificate for the second and third day of sick leave to the extent of 100 per cent of the employee’s average salary. At present, the compensation is free of social tax from the fourth day onwards. The basic exemption rate will increase to 180 euros in 2017 from the present 170 euros. The general income tax rate will remain at 20 per cent.

The additional tax free income of pensions will be increased to 2,832 euros per year or 236 euros per month. Alongside the general increase in basic exemption to 180 euros, this takes the tax-free pension to 416 euros, also guaranteeing the exemption of the average old-age pension from tax in 2017.

Exemption from income tax is extended to the benefits and allowances paid in the case of the death or reduction of the capacity for work of an ordinary official, assistant police officer, rescuer or person engaged in emergency situation work.

Rules of income taxation in 2018 (i.e. upon declaration until 31 March 2019).

  • The general basic exemption of people earning low and average wages will increase to 500 euros per month in 2018. This amount will decrease from a certain level of income. The basic exemption is 500 euros in the case of a taxable monthly income of up to 1,200 euros. There is no basic exemption in the case of income that is 2,100 euros or more.
  • The additional threshold of deducting home loan interest in the amount of 300 euros will be established within the threshold of 1,200 euros that has been applied until now and will also be applied in the future. The threshold of 1,200 euros will apply to training expenses, gifts, donations and loan interest.
  • The joint income tax return of spouses will only be maintained in respect of the most common deductions. If there is no income or the income is insufficient, spouses can declare jointly their home loan interest, training expenses and additional tax free income for children.

The VAT of accommodation establishments will remain at 9 per cent in 2017.

The social tax rate will remain at 33 per cent.

Reverse taxation of the metal products mainly used in construction and the machine industry will be implemented as of 1 January 2017 in order to reduce VAT fraud. The risk of tax fraud is high in the sector and it has therefore been difficult for companies who conduct their business honestly to remain competitive. The use of buffer companies that note add VAT to their invoices, which is not paid to the state, is common. The acquirer of the goods declares the VAT indicated on the invoice as input VAT and reduces the VAT calculated on its taxable turnover by the same amount.

Excise duties

Increasing the alcohol excise duty is planned for February and July 2017. The excise duty on one per cent of ethanol by volume per litre of beer will increase from the present 8.30 cents to 9.13 cents in February 2017 and to 15.52 cents in July. Example: if a 0.5-litre beer costs 1.09 euros at present, then its price after the excise duty increase in February only considering the excise duty part of the price will be 1.11 euros, and after the excise duty increase in July it will cost 1.29 euros. The excise duty on wine and fermented beverages with an ethanol content of up to 6 per cent by volume per litre will increase from the present 48.55 cents to 53.41 cents in February and to 77.44 cents in July. Example: if an apple cider with an alcohol content of 4.5% costs 1.29 euros at present, then its price after the excise duty increase in February would be 1.32 euros, and after the excise duty increase in July it would cost 1.46 euros.

The excise duty on a litre wine and fermented beverages with an ethanol content exceeding 6 per cent by volume per litre will increase from the present 111.98 cents to 123.18 cents in February. Example: if the price of a wine (75 cl) with an alcohol content of 12% is currently 5.79 euros, then after the increase in excise duty it would be 5.89 euros. The excise duty on strong alcohol will increase by 10% every year until 2020. Example: if a vodka (1 l) currently costs 20.90 euros, then after the increase in excise duty early in the year its price would be 21.94 euros. The reduced rate of independent small breweries will be increased. Instead of the present 3,000 hectolitres, the reduced rate (50% of the excise duty on beer) will be applied to production of volumes of up to 6,000 hectolitres. The production volume of an independent small brewery in the previous year will be considered instead of the volume of the current year. Paying the difference in excise duty retrospectively is not required if the threshold is exceeded. Entrepreneurs need this to make the transfer from an independent small brewery to an ordinary brewery smoother in terms of expenses.

The excise duty on cigarettes and smoking tobacco will increase by 8 per cent from 1 January 2017. Example: a packet of cigarettes that currently costs 3.26 euros will cost 3.53 after the increase in excise duty, i.e. the amount of excise duty will increase by 27 cents.

The increase in the rate of excise duty on fuel that was planned for 2017 will be postponed from the start of January until the start of February. The excise duty on a thousand cubic metres of natural gas will increase from 1 January from the current 33.77 euros to 40.52 euros and the excise duty on a thousand litres of diesel fuel will increase on 1 February from the current 448 euros to 493 euros. The planned increase in taxes on diesel fuel, diesel fuel for specific purposes and light heating oil in 2018 is abandoned. Examples: excise duty currently comprises 0.465 euros of the price of a litre of motor petrol, which will increase to 0.512 euros; and excise duty currently comprises 0.448 euros of the price of a litre of diesel fuel, which will increase to 0.493 euros; and excise duty currently comprises 0.03377 euros of the price of a cubic metre of natural gas, which will increase to 0.04052 euros.

Other legal amendments

Important amendments have been made to the Investment Funds Act, which simplify the establishment of investment funds in Estonia. For example, an entirely new type of fund that can be established in the future is a trust fund, which in other countries is primarily used to manage venture capital investments. The act also increases competition on the pension fund market. The act favours the addition of new pension fund management companies and makes switching pension funds considerably cheaper for people.

Provisions that require banks to open payment accounts (current accounts) for consumers on request and provide services related to the accounts will be added to the Law of Obligations Act. In addition to opening an account, the services also cover depositing money in one’s account, cash withdrawal and initiation of direct debits, credit orders and payment card transactions. Transferring an account from one bank to another will also become easier.

Amendments have also been made in the Securities Market Act and Financial Supervision Authority Act Amendment Act to update the competencies of the Financial Supervision Authority and the supervision measures for a more effective prevention of abuse of the securities market. The act is based on the EU regulation that establishes the rules for prevention of abuse on the securities market (incl. the stock exchange). Market abuse means unlawful activity upon trading in securities, which damages the transparency and reliability of the market and consequently the interests of investors.

Two EU directives will be transposed into the Tax Information Exchange Act in 2017. The act will establish the obligation of annual country-by-country reporting for the large groups of companies operating in Estonia, whose annual revenues exceed 750 million euros. The deadline for transposition of the provisions of automatic information exchange in the area of country-by-country reporting of the European Union Administrative Cooperation Directive is 5 June 2017. Automatic information exchange will extend to the country-by-country reports of large groups from 2018. The amendments to the same directive pursuant to which the tax authorities of the European Union Member States will start to automatically exchange information about the binding preliminary decisions of tax authorities from 2017. Information exchange about preliminary decisions will not bring about additional obligations for entrepreneurs. However, the information exchange will also concern the preliminary decisions made earlier, since 2012. The deadline for transposition of the directive is 1 January 2017. The administrative cooperation between tax authorities in the European Union in the area of direct taxes is regulated by the directive on administrative cooperation in the field of taxation, on the basis of which Estonia automatically exchanges information about the salaries, remuneration of management board members, pensions and real property income of the persons of other Member States. Information about the various funds held in a foreign country will be automatically exchanged from autumn 2017.

The amendments to the Accounting Act that will enter into force as of 1 January simplify the requirements for accounting source documents and require the public sector to accept machine-readable e-invoices.

The draft act stipulates the possibility that a machine-readable e-invoice can be submitted to the public sector for goods or services as of 1 January 2017, and the act also stipulates the standard for e-invoices. An e-invoice is sent via an operator from one accounting software directly to another, and the recipient will no longer have to enter the data of the invoice manually. The state has created the e-Financials environment for small entrepreneurs where they can prepare and send e-invoices free of charge.

The amendments relax the requirements for accounting source documents such as waybills, receipts, certificates and contracts. In the future, the only mandatory information a source document must contain is the time, content and figures of the economic transaction. If the counterparty of an economic transaction of an accounting entity is an accounting entity, state accounting entity or foreign legal entity, the invoice submitted about the transfer of goods or the provision of the service must contain, in addition to the information specified above, the number of the invoice and the information that makes it possible to identify the parties to the transaction.

Also, the amendments release microentrepreneurs from the obligation to prepare accounting policies and procedures. A microenterprise is a public limited company belonging to the member of the management board whose assets amount to less than 175,000 euros and sales revenue is less than 50,000 euros, and whose liabilities do not exceed equity.

Budget and important figures

The minimum wage will increase to 470 euros per month and 2.78 euros per hour on 1 January compared with the earlier 430 euros per month and 2.54 euros per hour. According to the forecast of the Ministry of Finance,  the average wage will increase by 5.5 per cent or to ca 1,200 euros. The daily rate of the unemployment benefit will increase to 4.86 euros in comparison to the previous 4.41 euros. The minimum monthly social tax rate related to the minimum wage of the previous year will increase to 430 euros in comparison to the 390 euros applied in 2016.

The average old-age pension will increase by 5 per cent or to ca 416 euros according to the forecast. The average old-age pension will remain free of tax and the additional tax free income of pensions will increase from the present 225 euros to 236 euros for this purpose. The support scheme for pensioners living alone will give 115 euros of support per year to 92,300 pensioners. Payment of the support is planned for next October. In comparison to 2016 state budget expenditure will increase in 2017 by 7.6 per cent or by ca 734 million euros to 9.66 billion euros. The general government budget is in a structural surplus with 0.2 per cent of GDP.

According to the budget, the state plans to use European Union and other foreign support in the amount of 961 million euros, which amounts to more than a billion euros with the state’s co-financing in the amount of 81 million. The investments made with the support of EU funds boost the economic growth of Estonia.

Defence expenses will amount to ca 2.2 per cent of GDP in 2017, which is the highest level of all times. The expenses related to the presence of allies are incurred in addition to the 2 per cent of GDP that is meant for the development of independent defence capabilities. The new programme of defence investments will start in 2018.

The biggest share of budget expenditure – 34 per cent or 3.28 billion euros – is spent on social protection, incl. the 1.67 billion euros spent on state pension insurance. The health insurance budget will increase by 66 million euros to 1.090 billion euros on the account of the improved collection of social tax. In addition to this, an additional 10 million euros will be allocated to the Estonian Health Insurance Fund for health insurance from the state budget in the next year.

The state expects to earn revenue in the total amount of ca 9.48 billion euros next year, which is 8.9 per cent or 780 million euros more than forecast for 2016. Total tax revenue will comprise 6.71 billion euros, which is 470 million euros more than forecast for 2016. This includes 2.73 billion euros of social tax or 157 million euros more than forecast for 2016, 2.1 billion euros of VAT or 170 million euros more than forecast for 2016 and excise duties in the amount of 1.08 billion euros or 113 million euros more than forecast for 2016.

Source: Estonian Ministry of Finance

Taxes raised the price level in September

  • Inflation is low in Estonia, but still amongst the highest in the euro area
  • Without tax rises, prices would have remained at close to the same level as last year
  • Inflation will rise further in the coming months

The rate of increase in consumer price inflation (CPI) in Estonia climbed in September to 1% from 0.3% a month ago. Prices in Estonia were 0.2% higher than in August. The harmonised index of consumer prices (HICP), which also includes purchases made in Estonia by tourists 1, rose by 1.1% in August according to the latest available statistics, this being notably higher than the euro area average and the second highest behind only Belgium. The average inflation rate in the euro area has ranged between 0.2% and 0.4% in recent months. Prices continued to fall in eight euro area countries, or about half of them, in August.

Inflation rose in Estonia for three main reasons, which were rises in excise, state regulated prices, and the low reference base of a year ago for energy prices. Most of the growth in the consumer price index in September over the previous year came from higher excise rates for fuel, alcohol and tobacco, and the rise in those rates added 0.8 percentage point to inflation. The influence of the introduction of free services has also passed out of the calculation by now, having started in 2013 with the change to make public transport in Tallinn free of charge. The effect from the introduction of free higher education passed out this September after three years, having offset the higher inflation caused by tax rises until now. Service price inflation accelerated substantially in September 2014 from 0.2% to 1.9%.

The inflation figure is affected not only by the price changes that occur during the month, but also by the changes in the prices of goods and services 12 months earlier, which is known as the reference base effect. In the second half of last year prices for both oil and food commodities fell very quickly on global markets, but commodities have probably passed the bottom of their fall by now. The reference base effect for prices of motor fuels alone lifted inflation in Estonia by around 0.3 percentage point in August and September, and the effect will increase until the start of the new year. This means inflation will continue to rise even though the global oil price has stabilised in recent months.

1 The main difference between the HICP and the CPI is that the HICP also takes in purchases by tourists within the territory of the country. The HICP is also used as the reference value for price stability in the euro area, and allows a better comparison of changes in the price levels in different countries.

Source: Bank of Estonia

Author: Rasmus Kattai, Economist at Eesti Pank

Head of Estonian tax authority to begin working in Nortal

Marek Helm, current director general of the Estonian Tax and Customs Board (MTA), will be joining the software and business consultancy company Nortal as director of the company’s public finance and change management team in mid-January 2017.

According to Nortal founder and CEO Priit Alamäe, Helm has carried out extensive reforms and necessary transformations in one of the most important public authorities in Estonia for which there is strong demand globally. “Effective tax collection and transparent public finance management is becoming more relevant globally,” said Alamäe in a press release. “By uniting Helm’s experience with our knowledge and references, we are creating an international center of competence and export capability while preserving a recognized leader for Estonia.”

Helm said that he has worked in the public sector for over 20 years and feels that the time has come to put himself to the test in the private sector. “Nortal is a company with growing ambition and international scope that exports Estonian e-government success stories,” said Helm. 2I’m glad that with my expertise and experience I can contribute to the company’s continuous expansion to export markets that are of great importance to Estonia.”

The MTA’s current director general noted that he would be handing over the management of the state authority to his successor with peace of mind. “This is a fantastic organization and a professional close-knit team that serves the Estonian society and is a great partner for taxpayers,” Helm said.

“During the past few years, Nortal has made significant investments to develop internationally recognized competence in the field of complex e-government reforms,” explained Nortal’s CEO. “Our aim is to address a client’s needs as a whole by offering holistic service concepts that include everything from legislative drafting, organization and process re-design to the implementation of new technologies and change management. Marek Helm’s long-term experience in public sector reforms and creating more effective processes, where knowledge-based and well thought through change management plays an important role, fits perfectly with Nortal’s plans and strategy.”

Helm has led the MTA as director general from December 2011. Prior to that position, he was deputy secretary general for public governance policy at the Ministry of Finance from 2009-2011, led the founding of the joint internal security office under the Ministry of the Interior from 2007-2009, deputy secretary general for internal security of the Ministry of the Interior from 2006-2007 and director of the Ministry of the Interior’s Internal Security Department in 2006. From 2004-2006, Helm held the position of deputy director general of the MTA and in 2003-2004, deputy director general of the Customs Board in the customs enforcement and pre-trial investigation fields.

Nortal is an international strategy consultancy and software solutions company focusing on e-governance, health care, telecommunications, production and logistics. It operates in nearly 20 countries and employs 530 specialists. Nortal posted sales revenue of 45 million euros in 2015.

Source: ERR News

A simplified tax operation for foreign undertakings

The Tax and Customs Board shall offer to foreign undertakings a simplified application form for registration as a person liable to value-added tax which is accessible both in English and in Russian and which makes application for a value-added tax identification number simpler.

“We will contact, when needed, the undertaking who has submitted an application in order to clarify some aspects concerning business activities. We offer consultation to undertakings as well in order to clarify the information concerning the Estonian tax system, how to find information from our web site, how to choose transaction partners not to be involved in fraud schemes and wherefrom to seek further advice,” Monika Jõesaar, the head of the service division of  the Tax and Customs Board, explained.  She encourages everyone to use advisory services so that doing business in Estonia would be simple and comprehensible already from the very beginning.

You will find the English application form for VAT identification number here and in Russian here

Source: The Tax and Customs Board

Tax office cooperates with the investors in terms of vast VAT return

The Tax and Customs Board calls on the economic operators intending to make greater investments than ordinary ones to inform the Board beforehand in order to ensure the fast refund of input VAT and thereby the stable cash flow.  

Such cooperation where economic operators send the preliminary information about major transactions to the Tax and Customs Board beforehand and thus the VAT refund is customarily fast is giving an effect already, for example, with lots of developers of immovable property. A prior notification to the Tax and Customs Board would surely support the operation of those companies as well which sell to external markets, intend to make great investments or start their investment period, and where the immediate monthly refund of VAT shall ensure the stable cash flow.

“A delay in refunding of the VAT may noticeably influence the financial resources of the company and thus the whole economic run. That is why we encourage to notify about such first or exceptionally great charges already in advance so that we could handle these primarily and refund the VAT to the company”, Jaanus Värk, the head of the Audit Department of the Tax and Customs Board explained. You can contact the Board via e-mail:

The Tax and Customs Board receives on an average 35,000 claims for the refund of VAT per month and 98 per cent of these claims are fulfilled within four working days. Often the claim of the company for the refund may be controlled additionally just for the reason that an exceptionally large amount to be refunded is in question and in this case the refunding will take place at least two weeks.

Source: The Tax and Customs Board

Estonia’s tax revenues increased by 7.3 pct in 2015

According to the Ministry of Finance, the state received revenues in the amount of 7.98 billion euros, which is 171.3 million euros more than last year. In comparison to 2014, the state tax revenues increased by 483.1 million euros or by 7.3 percent.

Expenditures increased by 7.2 percent up to 8.33 billion euros in comparison to last year. The highest increase, 23.8 percent, was in state investments. EU funds and other subsidies were used less than in the previous year, because the new period for using subsidies has not started in the extent it was expected.

“I would like to thank all the tax-payers, especially all the enterprises that provide jobs for Estonian people,” said Sven Sester, the Minister of Finance of Estonia. “The money in the state budget is the money of the taxpayers and the government uses it for the benefit of the entire Estonian society.”

“The government incurred expenses with the aim of improving Estonia’s security and the economic safety of our families. We ended the 2015 fiscal year with Estonia’s public finances in a good shape,” Sester added.

Tax revenues collected during the year made up about 90 percent of all the state revenues. The Estonian Tax and Customs board collected 7.13 billion euros in taxes, which is 483.1 million euros or 7.3 percent more than in the previous year. The growth was mostly due to the increased revenues from value added tax and social tax. As the largest revenue types of tax revenues, social tax was paid in the amount of 2.39 billion, value added tax in the amount of 1.86 billion and excise duties in the amount of 873.0 million euros. The highest revenue growth was in collecting value added tax (161.4 million euros or 9.5 percent) and social tax (160.4 million euros or 7.2 percent). Transferable taxes were collected in a total amount of 1.19 billion euros, which is 56.2 million euros or 5 percent more than in the previous year.

The total amount of non-tax revenues received by the end of the year was 852.2 million euros, which is 311.8 million euros less than the year before. This decrease was mainly caused by EU funds and other subsidies, whose use decreased by 42.3 percent within the year. During the year, goods and services were sold for 162.5 million euros and other revenues that were received amounted to 148.1 million euros.

8.33 billion euros was allocated for expenses, making the year’s increase of expenses 556.8 million euros. About a half of this increase or 256 million euros constituted  the payments for retirement, healthcare, unemployment insurance and other subsidies. In terms of expenditure types, 4 billion euros for subsidies, 2.54 billion euros for other operational expenditures and 1.44 billion euros for labour and management costs were paid last year.

Labour and management costs increased by 98.4 million euros or by 7.4 percent in comparison to the year 2014. 722.4 million euros were spent on labour costs with an annual increase of 6.9 percent. Management costs included 712.8 million euros or 7.8 percent more than in the previous year. Similarly to the two preceding years, labour and management costs for all types of expenditure were considerably larger for December than the average of previous months, exceeding the average expenditures of the year by 62.5 percent.

468.8 million euros was allocated for investments during the year which is 9.5 percent less than in the previous year. State agencies invested 337.3 million euros which is 23.8 percent more than in the previous year. Investment subsidies, however, were allocated to the extent of 131.6 million euros which is 114 million euros or 46.4 percent less than last year. The more modest figure in the use of investment subsidies is related to the smaller use of foreign financing in comparison to what was planned for the year 2015.

Foreign subsidies with advanced payments were allocated in the amount of 658.9 million euros or 65.5 percent of what was planned. A total of 14 677 projects were executed with EU financial backing in the 2007-2013 programming period. Estonia can use up to 4.4 billion euros of the allocated European Structural and Investment Funds and can apply for an additional 2 billion euros from different special programmes and direct aid funds for the entire on-going 2014-2020 financial period. 109.1 million euros has been paid as subsidies for the new period so far, including 68.6 million euros of structural aid and 40.3 million euros within the framework of the rural development programme. The difference between receipt and disbursement of foreign subsidies in the last year was 288 million euros which also affected the size of the liquidity reserve.

At the end of December, the State Treasury had 1.15 billion euros of liquid financial assets (deposits and bonds), which included 733.1 million euros in the Liquidity Fund and 398.5 million euros in the Stabilisation Fund. Compared to the end of 2014, the total size of liquid assets managed by the State Treasury decreased by 347.6 million euros or 23.3 percent. The size of the resources of the Ownership Reform Reserve fund increased by 5.3 million euros within the year, reaching 14.8 million euros.

By the end of November, the general government nominal budget surplus was 0.3 percent of the GDP or 53.1 million euros. The budget deficit of the central government was 44.8 million euros and the budget deficit of the health insurance fund amounted to 26.6 million euros. The budget of the unemployment insurance fund was in a surplus from the start of the year, growing throughout the period. The budgetary surplus of the unemployment insurance fund was 42.7 million euros at the end of November. The total sum of local government budgets was also in surplus, which constituted 81.8 million euros at the end of November.

Source: Press release by the Ministry of Finance