The Estonian tax system is characterized by its simplicity, transparency, and low tax rates. The country has a flat income tax rate of 20%, which applies to both individuals and corporations. This rate is among the lowest in Europe and provides a strong incentive for businesses to locate in Estonia.

In addition to the flat income tax rate, Estonia also has a value-added tax (VAT) system, which is levied on the sale of goods and services. The standard VAT rate in Estonia is 20%, although there are reduced rates of 9% and 0% for certain items.

Estonia also has a social tax system, which is levied on the wages and salaries of employees. The social tax rate is 33% and is used to fund the country's social security and health care systems.

One of the key features of the Estonian tax system is its simplicity. The country has a transparent and straightforward tax code, with few exemptions or deductions. This makes it easy for businesses and individuals to understand their tax obligations and comply with the law.

In addition to its simplicity, the Estonian tax system is also highly digital. The country has a fully integrated e-tax system, which allows taxpayers to file their taxes, pay their taxes, and access a range of services online. This makes it easy for businesses and individuals to manage their tax affairs and reduces the administrative burden of compliance.

Overall, the essentials of the Estonian tax system are its simplicity, low tax rates, and digital integration. These features make it easy for businesses and individuals to comply with the law and support the country's strong and dynamic economy.