How are Bondora investments taxed in Estonia for a private person

We made a query to the Estonian Tax and Custom Board on how to declare your Bondora earnings. Here is a short summary how peer-to-peer lending is taxed in Estonia for a private person (applies only to Estonian residents) and a step-by-step guide on where to find the relevant data on our platform.

What type of personal income is taxed in Estonia?

According to Estonian Income Tax Act chapter 3 Taxation of income of resident natural persons – § 12. Income of resident natural person – taxable income in Estonia includes income from employment, business income, INTEREST (§ 17), rental income and royalties, capital gains, pensions and scholarships, dividends, insurance indemnities and payments from pension funds and income of a legal person located in a low tax rate territory.

§ 17. Interest
Income tax is charged on all interest accrued from loans, leases and other debt obligations, as well as securities and deposits, including such amount calculated on the debt obligations by which the initial debt obligations are increased. Interest shall also include monetary payments made to unit-holders on account of a contractual investment fund, excluding the payments specified in subsection 15. The fine for delay (late fee) payable in the event of delay in performance of a monetary obligation is not deemed to be interest.

Read in detail:
Income Tax Act in English
Tulumaksuseadus (TuMS) in Estonian

How income in peer-to-peer lending is taxed in Estonia for a private person?

The income tax rate in Estonia is 20%. In peer-to-peer lending the yearly declaration consists of:

  1. Earned interest (received interest payment from the borrower)
  2. Earned interest from defaulted loans
  3. Secondary Market capital gains (profit earned from selling and buying loan shares)

For Bondora investors that means declaring “Total Interest Received”. This column consists of all earned interest and earned interest from defaulted loans and you’ll find that information from the Cash Flow page. If you read on we’ll show you where and how to find the data you need from Bondora.

If your net profit is purely virtual and your strategy is to reinvest all your returns, it doesn’t matter – you still have to declare the earned interest. If for some reason you haven’t earned any profit in a calendar year, e.g. when the borrower is on payment holiday and no interest has been received, then you have no duty of declaration – you only pay on actual received interest payments. Keep in mind that you cannot use Investment Account (§172) to invest on Bondora. And when declaring your income as a private person you cannot offset any losses or fees against earned interest and income tax is payable on gross interest received.

Is capital gains earned from trading on the Secondary Market also taxed?
Yes, you are obliged to declare any capital gains earned from profitable sales on the Secondary Market. Here is an illustrative example: Let’s say you bought a €5 loan and sold it with a mark-up for €6 from which you made a profit of €1 – this €1 you declare as the Secondary Market capital gain.

Step-by-step guide to finding your earned income on Bondora

How to find income earned from interest payments.

CASH FLOW – Account Statement PDF

Go to the Cash Flow page, choose the period and click on the PDF icon – the Account Statement report will be created for you immediately. On the Account Statement PDF the most relevant rows for you are “Interest Received” and “Interest Repaid from Loans in Default” that already includes earned interest + earned interest from defaulted loans.

REPORTS – Account Statement or Monthly Overview

cash flow Monthly Overview
The second option is to go to the Reports page. There you can filter out earned interest + earned interest from defaulted loans to get separate values. Click on “Create new report” and check “Account statement” or “Monthly overview” and choose your period. The relevant rows for you are “Repaid Interest” and “Repaid Penalties”.

How to find capital gains earned from trading on the Secondary Market.
REPORTS – Investment List

peer-to-peer lending Investment List
The “Investment List” gives you the best overview of your Secondary Market capital gains. These four columns – Investment Principal, Purchase Price, Sold in Resale Price, Sold in Resale Principal – help you calculate your capital loss and gain on Bondora.


Please note that Bondora does not provide tax, financial or legal advice. We recommend that you consult your financial or tax adviser if you have any questions.

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