What Are Deductible Expenses?

Deductible expenses are those that can be assigned to the company, meaning they are legitimate business expenses paid by the company and properly supported by the required documentation. Thanks to the innovative Estonian tax system, these expenses are exempt from taxes. They are considered money that you are reinvesting in the company.

Due to increased scrutiny by the Estonian Tax and Customs Board regarding the type and content of invoices, Companio can only accept expenses when the appropriate supporting documentation is provided.
Basically, a deductible expense must be directly related to your business activity and must not imply that you have a permanent establishment in another country, which could affect your company's tax residency.

Some examples include:

• The expenses of your servers and web: hosting, domains, and any other web service that your business needs.
• Administrative tools and software online or offline for management, accounting, etc.
• Web tools, subscriptions, and software that you need to develop your activity.
• Telecommunication costs communication costs are deductible as long as they are not "land lines" or suppose a "permanent establishment" (includes office lines outside of Estonia). You can deduct cell phone and internet for mobile devices only.
• Fungible office supplies.
• Business travel: Flights, train journeys, car rentals, and accommodation required for legitimate business trips can be deductible when properly documented. This can also include necessary business trips to Estonia, for example, when required for company-related procedures.

For airline and train travel, you must obtain a proper invoice issued in your company's name. A ticket, receipt, or booking confirmation issued only in the owner's or traveller's personal name is not sufficient. Airlines and transport providers generally offer ways to request an invoice for a company. If you do not receive one automatically, contact the airline or train operator and request a corporate invoice containing your company's details.

• Payment gateway fees: Fees charged by payment gateways used by your online store or other business services.
• In exceptional cases, a business lunch may be deductible, but it will require you to hire a catering service and get an invoice for your company from them. This is for a special event that may be justified for business reasons, not just because you want to have a Chai Latte at your favorite café. Remember, these expenses, even with the invoice, will be declared as "Costs of entertaining guests" or even "non-business expenses", and subject to tax liability (meaning, you will have to pay taxes for them). So it is indeed cheaper for you to pay for your latte with your money. Please note, Companio does not support personal expenses such as meals, drinks, food, or clothing.

Local transport expenses

Local transportation expenses such as buses, metro, taxis, and ride-hailing services are not accepted as deductible business expenses by Companio.
Because these expenses cannot be reliably distinguished between business and personal use, they should not be submitted as deductible expenses, even when they occur during a business trip.

Meals and entertainment

In exceptional cases, a business lunch or similar expense may be related to a legitimate business event. However, it requires appropriate documentation, such as an invoice issued to your company by a catering provider.
These expenses may be classified as Costs of entertaining guests or non-business expenses and may therefore result in tax liability.
Companio does not support personal expenses such as meals, drinks, food, or clothing as deductible business expenses.

Remember: the invoice matters

An expense being related to your business is not enough on its own. The supporting document must also meet the applicable accounting requirements.
Whenever an invoice is required, make sure it:

• Is issued in your company's name.
• Contains the required company and supplier information.
• Clearly describes the goods or services purchased.
• Meets the applicable invoice requirements.

If a supplier, airline, or other service provider initially gives you a personal receipt or booking confirmation, contact them and request a proper invoice issued to your company before submitting the expense to Companio.

Updated on: 10/08/2026