EMTA Identifies Six Common Mistakes with Investment Accounts

Briefly

The Estonian Tax and Customs Board (EMTA) has published clarifications on common mistakes in managing investment accounts. The main task for an investor is to annually report all accounts, deposits, and withdrawals to ensure the correct application of deferred tax on investment income.

What Happened

EMTA has pointed out six typical mistakes when filling out personal income declarations related to investment accounts. These are not new rules, but clarifications of the existing procedure as published by the agency.

An investment account allows you to defer the taxation of investment gains: tax reporting becomes relevant when withdrawals from the account exceed the contributions made to it. Simply opening a separate bank or brokerage account is not enough—you must also report its details in your annual tax return.

According to EMTA, for 2025, more than 87,000 people declared over 132,500 investment accounts. In autumn 2026, following EMTA reminders, the declared tax obligation increased by nearly half a million euros.

Please note: The investment account is a tax accounting regime for individuals. It is not intended for the regular business account of an Estonian OÜ and does not replace its bookkeeping obligations.

Six Mistakes Highlighted by EMTA

Account Not Declared or Incorrectly Declared

You must declare your account even in years when no funds were withdrawn from it. Any balance is carried forward to the next tax period. If a parent opens an account for a minor child, the parent must declare it as long as the account remains open.

Some major banks and the investment company Lightyear allow reporting data directly to the e-MTA. However, pre-filled data should always be checked: it may lack the previous year’s balance, separate contributions, withdrawals, dividends, or interests. Data for foreign accounts must be entered manually by the investor.

Mixing Everyday Payments with Investments

Paying rent, groceries, or personal expenses from the investment account counts as a withdrawal for tax purposes. This complicates accounting and increases the risk of mistakes.

Example: If you deposit €10,000 into your investment account and then spend €2,000 on rent, this amount is considered a withdrawal, even if the money was not transferred to your regular bank account.

Asset Purchased Outside the Investment Account System

When buying a financial asset, you must choose the accounting regime from the start. Shares, fund units, or bonds purchased from a regular account and reflected in the standard regime cannot later be transferred into the investment account system. Their sale is also taxed according to the initially chosen system.

Not every account or platform associated with investments qualifies for this regime. For example, a crowdfunding platform or a crypto service provider is not necessarily an investment account. EMTA recommends checking the status of service providers in official registers and distinguishing between accounts used for holding/transferring funds and the acquisition of financial assets themselves.

Amending Past Data and Closing the Regime

If errors were made in several tax returns, EMTA advises starting corrections with the earliest available year, as the investment account balance rolls over from one period to the next. Submitted declarations can only be rectified retroactively within three years. Undeclared deposits for earlier periods might no longer be included in calculations, which may affect your final tax liability upon making withdrawals.

When ceasing to use the regime or changing your Estonian tax residence, you must close out the investment account for tax purposes: declare the date of closure and report the remaining cash and acquisition value of financial assets on the account as a withdrawal. This does not necessarily mean actually closing the bank or brokerage account.

Important! The investment account regime is intended for tax residents of Estonia. If you lose this status, you must finalize your Estonian tax reporting for the investment account via your declaration.

In June 2026, EMTA sent notifications to 400 people who marked all investment accounts as closed but may not have reported the remaining funds and asset values. As a result, more than €1.5 million in withdrawals was declared. About 200 more notifications were sent to non-residents with unfinished accounting, resulting in €2.9 million in reported withdrawals.

Who is Affected and What to Check

This clarification primarily concerns individuals using the investment account: current and former Estonian tax residents, investors with foreign accounts, parents of minor investors, and people leaving Estonia. e-Residency status alone does not define tax residency or grant participation in the investment account regime.

Before submitting your tax declaration, it is worth:

1. Matching all investment accounts in use and their balances with the previous declaration.
2. Checking that all contributions, withdrawals, dividends, and interests are recorded.
3. Separating personal expenses from investment transactions.
4. Ensuring all acquired assets were purchased via the declared investment account.
5. If relocating or closing the regime, reviewing the closure procedure following EMTA’s clarification.

Frequently Asked Questions

• Should you declare the account if there were no withdrawals during the year? Yes, the account must be reported yearly, and the balance carried forward.
• Can you use the investment account for everyday expenses? You can make the payment, but for tax purposes it counts as a withdrawal and complicates calculations.
• Does closing the regime mean you have to close the bank account? No. Ending the regime in the declaration does not require you to formally close the bank or brokerage account.

Conclusion

The main risk with an investment account is not just individual transactions, but the continuity of reporting year after year. Regularly checking your tax declaration, keeping a separate account for investments, and properly closing out the regime when changing tax residency all help avoid distortions in future tax calculations. In nonstandard situations, always verify the latest requirements with EMTA, and if needed, seek individual professional advice.

Sources

• Pane tähele: 6 levinuimat viga investeerimiskonto deklareerimisel

Article Author

Evgeniy Mialik

Business consultant, working in this field since 2011. I help entrepreneurs with company registration and administration, powers of attorney, accounting and tax returns. In my articles I write about the issues my clients face and share useful news for business owners in Estonia.