If you pay yourself a board member fee, distribute dividends, or employ anyone through your Estonian OÜ, you are filing TSD returns. The TSD (tulu- ja sotsiaalmaksu deklaratsioon) is Estonia's combined income tax and social tax return, filed monthly through e-MTA. It covers everything from payroll withholdings to dividend distributions to fringe benefits. Miss the deadline and penalties apply. Get the annexes wrong and EMTA may have questions.
This post explains what the TSD is, which annexes apply to your company, and how the cash-based timing rules work — with a worked example for a solo OÜ owner paying themselves a board member fee.
What Is the TSD?
The TSD is a monthly return that declares all income tax and social tax obligations for a given month. It is not one form — it is a main form plus up to seven annexes, each covering a different type of payment or obligation.
Filing is done electronically through e-MTA, the Estonian Tax and Customs Board's online portal. Both the filing and the corresponding tax payment are due by the 10th of the month following the payment month.
| Fact | Detail |
|---|---|
| Full name | Tulu- ja sotsiaalmaksu deklaratsioon (TSD) |
| Filing frequency | Monthly |
| Filing deadline | 10th of the following month |
| Payment deadline | Same — 10th of the following month |
| Filing method | e-MTA (electronic only) |
| Who files | Any company that makes taxable payments |
The Seven Annexes
Not every annex applies to every company every month. Most small OÜ companies regularly use Annex 1 (payroll) and occasionally Annex 7 (dividends). Here is what each annex covers:
| Annex | What It Covers | When You Need It |
|---|---|---|
| Annex 1 | Payments to resident natural persons: salaries, board member fees, contract payments. Withheld income tax, funded pension, unemployment insurance. Calculated social tax and employer unemployment insurance. | Every month you pay a salary or board fee to an Estonian resident |
| Annex 2 | Payments to non-resident natural and legal persons: withheld income tax, unemployment insurance, calculated social tax. | When you pay a non-resident board member, contractor, or make certain payments to foreign legal persons |
| Annex 3 | Payments to contractual investment funds. | Rarely used by small OÜ companies |
| Annex 4 | Profit taken out of permanent establishments. | Only if your company has a PE in Estonia (foreign parent) |
| Annex 5 | Non-business expenses, gifts, donations, entertainment expenses. | When representation expenses exceed the tax-free limit (EUR 50/month + 2% of gross payroll), or for non-business expenses |
| Annex 6 | Fringe benefits (erisoodustused). | When tax-free allowances are exceeded, or when providing non-cash benefits to employees/board members |
| Annex 7 | Dividends and profit distributions: regular dividends, hidden distributions, equity payments. | Every month you distribute dividends or make other profit distributions |
Which Annexes Do Most Solo OÜ Owners Use?
For a solo e-resident or founder who pays themselves a board member fee and occasionally distributes dividends:
- Annex 1 (or Annex 2 for non-residents): every month a board fee is paid
- Annex 7: months when dividends are distributed
- Annex 5 or 6: occasionally, if exceeding allowance limits
That's it. Annexes 3 and 4 are irrelevant for most small companies.
Cash-Based Timing: The Most Important Rule
The TSD follows cash-based timing. The tax obligations are triggered by the payment date, not the accrual date or the period the work relates to.
This means:
- December 2025 board fees paid in January 2026 are declared on the January 2026 TSD (due 10 February 2026), using 2026 tax rates
- March salary paid on 31 March goes on the March TSD (due 10 April)
- March salary paid on 1 April goes on the April TSD (due 10 May)
The rate that applies is the rate in force on the day the payment hits the recipient's bank account — not when the work was done.
Why This Matters
Cash-based timing has real consequences:
- Rate changes: If tax rates change on 1 January, anything paid in December uses the old rates, even if it's "for" January. Anything paid in January uses the new rates, even if it's "for" December.
- Deadline management: If you pay on the last day of the month, you have until the 10th of the following month to file. If you wait one day and pay on the 1st, you get an extra month.
- Zero months: If no payments are made in a given month, no TSD filing is required for that month — with one exception: an active, non-exempt employment relationship keeps the minimum social tax due even when no wages are paid (see Common Mistakes below).
Worked Example: Solo Board Member Fee
Here is a complete TSD Annex 1 example for a solo OÜ owner paying themselves a EUR 1,500 gross board member fee in March 2026. The recipient is an Estonian resident who has requested the basic exemption be applied.
Step 1: Calculate withholdings and employer costs
| Component | Calculation | Amount |
|---|---|---|
| Gross board fee | — | EUR 1,500.00 |
| Funded pension (2%) | 1,500 x 0.02 | EUR 30.00 |
| Basic exemption | Flat (2026 rules) | -EUR 700.00 |
| Taxable income | 1,500 - 30 - 700 | EUR 770.00 |
| Income tax (22%) | 770 x 0.22 | EUR 169.40 |
| Net to board member | 1,500 - 169.40 - 30 | EUR 1,300.60 |
| Social tax (33%) | 1,500 x 0.33 | EUR 495.00 |
| Total company cost | 1,500 + 495 | EUR 1,995.00 |
Note: unemployment insurance (1.6% employee + 0.8% employer) typically does not apply to board members. If the recipient were an employee, those would be additional line items. The funded pension contribution is deducted from the income tax base before the 22% is applied — that is why the taxable income is EUR 770, not EUR 800.
Step 2: Filing timeline
| Event | Date |
|---|---|
| Payment made | 31 March 2026 |
| TSD Annex 1 filing due | 10 April 2026 |
| Social tax payment due | 10 April 2026 |
| Income tax payment due | 10 April 2026 |
All three — the filing, the social tax, and the withheld income tax — are due on the same date: the 10th of the following month.
Step 3: What appears on the TSD
The TSD Annex 1 for March would show one row for the board member:
| Field | Value |
|---|---|
| Recipient | Board member's name and registry code |
| Gross payment | EUR 1,500.00 |
| Basic exemption applied | EUR 700.00 |
| Income tax withheld | EUR 169.40 |
| Funded pension withheld | EUR 30.00 |
| Social tax calculated | EUR 495.00 |
Social tax is simply 33% of the actual fee — EUR 495.00 here. The monthly minimum social tax (EUR 292.38 in 2026, 33% of the EUR 886 minimum base) applies to active employment relationships only; a board member fee carries no top-up obligation, so no minimum check is involved.
Common Mistakes
1. Filing for the wrong month
If a March board fee is paid on 1 April, it belongs on the April TSD, not March. The payment date drives the filing period.
2. Forgetting dividend months
Dividend distributions go on Annex 7, not Annex 1. If you distribute EUR 10,000 in dividends in June, the June TSD needs an Annex 7 — even if your company doesn't pay any salaries or board fees that month.
3. Misapplying the minimum social tax
The monthly minimum social tax base (EUR 886 in 2026) applies to employment relationships. If you pay an employee EUR 500 gross in a month, the company pays social tax on EUR 886, not EUR 500 — that's EUR 292.38, not EUR 165 — unless an exemption qualifies (pension, student, A1 certificate, etc.). Board member fees are excluded from the minimum: social tax on a board fee is 33% of the actual amount paid, with no top-up — and zero if an A1 certificate from an EEA country or Switzerland exempts the person from Estonian social tax altogether. The flip side: a board fee below EUR 886/month does not, by itself, qualify the board member for Estonian health insurance.
4. Zero returns
If your company makes no payments at all in a given month — no board fee, no salary, no dividends — and has no employees, you do not need to file a TSD for that month. There is no obligation to file "zero returns." The carve-out is an active, non-exempt employment relationship: the minimum social tax stays due even in a month with no wages (unless the employment is suspended), so that month's TSD must still be filed and the minimum paid.
5. Not filing after paying yourself
Some new founders pay themselves a board fee but forget to file the TSD. EMTA sees the bank transfer but no corresponding declaration. This triggers automatic queries.
Quick Reference
| Item | Detail |
|---|---|
| Filing deadline | 10th of the following month |
| Payment deadline | Same — 10th |
| Timing rule | Cash-based (payment date determines filing period and applicable rates) |
| Payroll annex | Annex 1 (residents) or Annex 2 (non-residents) |
| Dividend annex | Annex 7 |
| Fringe benefit annex | Annex 6 |
| Representation excess | Annex 5 |
| Zero months | No filing required — unless an active employment keeps the minimum social tax due |
| Minimum social tax (2026) | EUR 292.38/month (33% of EUR 886) — employment only, not board fees |
For a full breakdown of all tax rates used in TSD calculations, see Estonian Tax Rates 2026. For help deciding between board member fees and salary, see Board Member vs Employee.
Auto-Generate Your TSD with Arvello
Getting the TSD right by hand means juggling four different tax calculations, remembering which annex each payment belongs on, checking whether the minimum social tax base applies, and doing it all by the 10th of every month. One wrong field and you're filing a correction.
Arvello generates TSD data directly from your payroll runs and dividend distributions. When you record a board member fee or process a dividend, the system calculates all withholdings, social tax, and — for employment payments — the minimum social tax top-up if needed. On the 10th, the TSD annexes are ready to submit — the XML file is generated in the format e-MTA expects, so there's no re-keying numbers into a web form.
