A tax debt does not stand still. Interest is added every day at 0.06% per day, that is 21.9% per year. The interest is added from the day after the due date until the debt is paid. It runs at weekends as well. The law states the rate like this:
§ 117. Interest rate
(1) The interest rate provided for in §§ 115 and 116 of this Act is 0.06 per cent per day.
(Taxation Act, Riigi Teataja)
The calculation is simple: unpaid tax × number of days late × rate. This is more expensive than almost any bank loan. That is why an unpaid tax bill is the worst debt to carry. The thought "I will deal with it when it grows bigger" is exactly backwards.
From 100 euros the debt is public
When a tax debt that was not paid on time reaches 100 euros, anyone can see it in the public query of the Estonian Tax and Customs Board. The bank, the landlord and the business partner all look at it when they check you before a contract. A debt below 100 euros, and the interest calculated on it, are not shown by the query.
The same query also shows whether the debt is disputed or already in an installment plan. A debt in an installment plan therefore looks like a good sign, not a hidden shame. For your Estonian partners this is not a private money worry. It is a public data point about you.
The way out: an installment plan for the tax debt
If the company is in temporary difficulty, the tax debt can be put into an installment plan, which means paying it in parts. This is a normal procedure, not a favor.
- The schedule runs for 2–24 months.
- The interest on a debt in an installment plan can be reduced by up to 50% — in simple cases this happens automatically.
- The application needs a realistic payment schedule and a justification. Simple cases are decided in e-MTA at once, cases that need review within 20 days.
- The precondition: all declarations must have been filed.
This turns panic into a payment schedule. But only with honest numbers — and the schedule then has to be kept. If the conditions of the installment plan are broken, the Estonian Tax and Customs Board cancels the decision and the interest reduction. The claims are then collected without any further warning.
The most important thing: the order
A debt rarely comes alone — often it comes together with an unfiled annual report. It is the right order that decides whether the matter is settled in weeks or drags on for a year. What matters is what you file first and what you pay first. This is a question of organization, not a hopeless situation.
This article was prepared with the help of artificial intelligence.