The Riigikogu discussed amendment of the Funded Pensions Act
At today’s sitting of the Riigikogu, the Bill on Amendments to the Funded Pensions Act passed the first reading. Its purpose is to make contributing money to the first and second pension pillars more flexible.
Four Bills passed the first reading
Under the Bill on Amendments to the Funded Pensions Act and Other Acts (464 SE), initiated by the Government, it will be simpler to transfer inherited assets in the second pension pillar of a bequeather to the second pension pillar of a successor, allowing the successor to make several different transactions with a single application in the future. The conditions for closing a pension investment account will also become more flexible, and the Bill also contains some amendments regarding the implementation of European Union legislation.
The Bill on Amendments to the Value Added Tax Act and the Taxation Act (462 SE), initiated by the Government, also passed the first reading. It will establish a special scheme for small enterprises from next year which will simplify their operation in other European Union Member States. If an enterprise generates turnover in another member state, it will no longer have to be registered for VAT purposes there if two conditions are met. First, the calendar year turnover of the enterprise in the relevant Member State must not exceed the ceiling at which the obligation of registration arises as established there and, second, the overall turnover in the Union of the enterprise must not exceed EUR 100,000 per year.
The first reading of the Bill on Amendments to the Simplified Business Income Taxation Act and Amendments to Other Associated Acts (463 SE), initiated by the Government, was also concluded. The number of users of the special taxation regime established by the Simplified Business Income Taxation Act and the amounts of income declared through the business account have grown rapidly over the years. At the same time, several bottlenecks have emerged, due to which the business account may no longer serve its original purpose and may no longer be an attractive way of paying taxes for the taxpayer at some point in time. The Act will make four major amendments to the taxation of income earned through a business account. The amendments will concern both business account users and legal entities purchasing services from business account users.
The Bill will amend the tax liability arising from the provision of services to a legal entity – the current additional income tax liability will be replaced by a social tax liability. The amendment will reduce the tax burden for companies and increase the social guarantees for business account users. In addition, the rate for the tax on business income and the rules for distributing the tax will be amended. Among other things, the higher tax rate will be abolished, the rate of tax on business income of business account users affiliated to a mandatory funded pension scheme will change and, consequently, the scheme for distributing the tax will also change.
The Bill on Amendments to the Weapons Act and Amendments to Other Associated Acts (468 SE), initiated by the Government, passed the first reading as the last item on the agenda. Its purpose is to strengthen the Estonian defence industry and to ensure a competitive environment for the defence industry in Estonia, primarily in the field of arms and ammunition production. Compared to the current situation, the purpose of the amendments is to create an opportunity for companies in countries who have friendly relations with Estonia and engage in defence cooperation with Estonia to contribute to the Estonian defence industry.
As a result of the entry into force of the amendment, it will be possible to grant licences for handling military weapons and ammunition not only to citizens of NATO or European Union member states, but also to citizens of OECD countries, as well as to citizens of countries with which Estonia has concluded an agreement on the exchange of classified information.
According to the Bill, in the future, companies holding a licence for the transport of military weapons and ammunition issued in another European Union member state will also be allowed to provide transport services for military weapons and ammunition in Estonia.
The Bill will organise the clarity of the definitions related to military weapons, ammunition, and munition. The Code of Criminal Procedure will be amended by including a new basis precluding criminal procedure. The purpose of the amendment is to fill a legal gap and to reduce the number of military weapons in circulation and in illegal possession. The State Secrets and Classified Information of Foreign States Act will be amended by including a new basis for classification arising from the development of the defence industry and the related processing of sensitive information.
Verbatim record of the sitting (in Estonian)
Video recording will be available to watch later on the Riigikogu YouTube channel.
Riigikogu Press Service
Maiki Vaikla
+372 631 6456, +372 5666 9508
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