Estonian guidance says cash receipts belong in the entrepreneurship account

Estonia’s Tax and Customs Board has added an explicit instruction for entrepreneurship-account holders who receive payment in cash from a private individual: transfer the amount to the entrepreneurship account at the first opportunity. The guidance addresses the payment route needed for the account’s automatic tax handling.

The instruction appears in the authority’s explanation of how the account works. Normally, the customer pays for a service directly into the provider’s entrepreneurship account. The added sentence deals with the cash alternative and places the transfer step with the account holder. It does not specify a fixed number of days; the wording is tied to the first opportunity to make the transfer.

Under the statutory framework, the tax applies to amounts received in the entrepreneurship account. The account is held in the individual’s name, with instructions for the bank to reserve the tax amount for the Tax and Customs Board and transfer it to the authority. The law specifies that only receipts in euros from services and sales of goods are paid into that account.

The basic entrepreneurship-income tax rate is 20% of the amount received.Emta Where the account holder is subject to funded-pension contributions, the rate increases by the relevant pension contribution rate. The authority explains that the bank reserves the amount and sends it automatically to the Tax and Customs Board; the remaining balance is available for the account holder to use.

The account is a simplified business arrangement, so the authority warns that costs cannot be deducted from its receipts and tax allowances cannot be applied to those receipts. That distinction matters for someone comparing this arrangement with business forms that permit deduction of business expenses: the account taxes the incoming amount rather than the profit after costs.

Account holders accepting cash should build the transfer step into their receipt-handling routine and check the account’s receipts and tax calculation in e-MTA. The new sentence is operational guidance from the Tax and Customs Board; the statutory framework is Ettevõtlustulu lihtsustatud maksustamise seadus, particularly §§ 1, 4 and 6.