Estonia Fixes Gambling Tax Error

On February 10, Estonia’s parliament passed an amendment to the Gambling Tax Act, correcting a legislative error that left the iGaming segment untaxed from January 1.

A single tax rate of 5.5% will take effect on March 1, 2026, report ERR News. The Ministry of Finance estimates the budget loss caused by the error at €4 million.

Correction of the Online Casino Tax Error

Members of the Riigikogu approved a technical fix that restored the gambling tax for online casino operators. Due to the error in the law, remote operators temporarily did not pay the tax.

According to the Ministry of Finance, tax revenue could reach around €27 million in 2027, and approximately €4 million in the first quarter.

Voluntary Donations Instead of Tax

The Ministry of Finance has prepared guidelines for voluntary transfers covering the period affected by the error. Companies may transfer funds directly to the Estonian Cultural Endowment (Kulka) or to the state treasury account with the note “donation in place of gambling tax.”

A 22% income tax is also applied to the donation amount. Transferring this portion to the Cultural Endowment requires a separate government decision.

Deadlines and Operators’ Position

According to the Ministry of Finance, no donations have been received so far. The ministry notes that the standard tax payment deadline is February 15, so transfers are expected closer to that date.

The Estonian Gambling Operators Association (EGOA) said that operators are planning to transfer the funds in February, following the established tax payment schedule.

Impact on the Cultural Endowment

Lower tax revenue has resulted in reduced funding for the Estonian Cultural Endowment. The fund’s management said the current situation does not create immediate problems due to existing reserves.

The final amount of the shortfall will become clear after March, once it is known how much funding gambling operators have transferred.