Private persons may apply for an income tax free grant for connecting to water and sewerage

18. September 2018 | 15:07

Private persons no longer have to pay income tax on a grant received from the Environmental Investments Centre (EIC) for connecting to the public water supply and sewerage system or installing a holding tank. The amendment to the Income Tax Act recently entered into force, thanks to which individuals who have previously received assistance from the EIC may receive an income tax refund.

Siim Kiisler, Chairman of the Supervisory Board of the EIC and Minister of the Environment, believes that – thanks to the opportunity to submit applications, which began in June, and the exemption from income tax that has now been added – the time of substandard drinking water being consumed in homes will soon be coming to an end. ‘We made connecting to the public water supply and sewerage system more accessible to people, since a large portion of the costs can now be borne with the help of the EIC. As of today, more than 800 households have received grants, who will soon be able to begin consuming quality drinking water and whose waste water will no longer endanger the environment’.

‘The implementation of the amendment was the result of a great deal of effort between the EIC and the Ministry of the Environment, as well as the Finance Committee of the Riigikogu and the Ministry of Finance. I would like to thank everybody! While income tax was previously deducted upon payment of the grant, this is no longer the case,’ said Veiko Kaufmann, Director of the EIC. The EIC will be refunding income tax to people who have already received support in 2018. The EIC will also be cancelling already declared income at the Tax and Customs Board for individuals who have already received the grant, meaning that the grant will no longer be included as part of the received income. The EIC will not be refunding the income tax to those people who authorised the water-undertaking to submit an application. In this case, the EIC will be refunding the income tax to the water-undertaking, who will perform the settlement of accounts with the individuals who received the grant’.

Applications may be submitted by residents of areas in which the inhabitant’s household is located within a waste water collection area, where the pollution load exceeds 2000 consumers. It is possible to use the search engine on the EIC’s homepage to determine whether the place of residence is in a corresponding waste water collection area. Only one application may be submitted per registered immovable.

The average grant amounts are within the range of EUR 1382–EUR 3792. The applications are to be submitted via the E-support environment or via a form available on the EIC’s homepage, which can be sent to the EIC by e-mail (info [at] or by post (Narva mnt 7a, 10117, Tallinn). There is also a video guide on the EIC’s website, which is of help when filling out the E-application environment.

The EIC will process the applications within 50 calendar days as of the moment of their submission, and after receiving the funding decision a period of six months is provided to perform the works. During the course of construction works the grant recipient must ensure that a placard is displayed in a visible location at the site of the construction works. The required placard must be printed in A3 format, in colour, and must be weather proof.

The EIC has received 1001 applications from private individuals, for connecting to the public water and sewage system or for the installation of waste water holding tanks, in a total amount of EUR 2.8 million. Out of these, 833 have received a positive funding decision, with the total amount being EUR 2.33 million. At present, the grant has helped 300 households connect to the public water supply and sewerage system and slightly more than EUR 847,000 has been paid out in grants. The budget for the application round is EUR 10 million and applications will be accepted until the budget is exhausted, but not later than 31 December 2020.

The grant is provided from the measure “Development of Water Management Infrastructure” for the structural support period 2014-2020 and from the EU Cohesion Fund. The measure was developed by the Ministry of the Environment.

Additional information on the application round is available from the EIC’s homepage.