Estonia repeals the Security Tax Act, cancelling the planned 2029 return of VAT to 22% and keeping the 24% rate

What changed in detail

The Ettevõtlustulu lihtsustatud maksustamise seaduse ja tulumaksuseaduse muutmise ning julgeolekumaksu seaduse kehtetuks tunnistamise seadus was adopted by the Riigikogu on 18 June 2025, proclaimed by the President on 26 June 2025 (Resolution No. 575) and published as RT I, 08.07.2025, 1.

Its § 2 repeals the Julgeolekumaksu seadus (Security Tax Act, RT I, 02.01.2025, 2). Under § 4(2), § 2 takes effect in the ordinary way, ten days after publication, but not before 2 July 2025, so the repeal took effect on 18 July 2025. The same Act’s §§ 1 and 3, which change income tax rates, take effect on 1 January 2026.

The Security Tax Act had amended the VAT Act through its § 21. Points 1, 3 and 5, which raised the standard rate from 22% to 24%, took effect on 1 July 2025 and are already part of the VAT Act. Points 2 and 4, which would have brought the rate back from 24% to 22%, were due on 1 January 2029. Repealing the Security Tax Act before that date means those points never enter into force.

What it means

The repeal is in force, and its effect is that Estonia’s 24% standard VAT rate has no end date. The rate rise itself is recorded separately (Estonia raises VAT to 24%); this record is why that rate is no longer temporary.

Anything built on the 2029 cut needs correcting: rate tables, long-term contracts with VAT-inclusive prices, and price forecasts. A future return to 22% would now need a new act of the Riigikogu.