DOING BUSINESS IN ESTONIA

Posted By Romain Ponsot on Oct 6, 1907 in Doing Business


Date de publication : 06-10-1907

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The following information are for the sole purpose  of providing a general overview of  the local taxation of the Corporate tax aspects of the country. In any case, it can not replace a tax advice, or be considered as an official information.

 

Yes we tax in Estonia

 

Flash News

Governement plans to lower the CIT rate to 14% on regular profit distribution

Local tax advisors

No specific information on the local tax advisors.

Useful Links

Ministry of Finance : Click here

Tax administration : Click here

VAT identification number within EU:

Permanent Establishment

The definition of Estonian residence corresponds to the OECD model convention.

Corporate Income Tax

All undistributed corporate profits are tax-exempt.

This exemption covers both active and passive types of income, as well as capital gains from sales of all types of assets, including shares, securities and immovable property.

Profit distributions, fringe benefits, gifts, donations, entertainment expenses, profit adjustments and non-business related expenses are taxed at a flat rate of 20%.

 

Taxable income is profit distributions, fringe benefits, gifts, donations, entertainment expenses, profit adjustments and non-business related expenses.

Carry forward : Non applicable (only distribution are taxed)

Carry back : Non applicable (only distribution are taxed)

The taxable period of legal entities is a calendar month.

Companies self-assess their tax liability.

Whithholding Taxes (payment to foreign companies)

The local tax rates in Estonia are the following, subject to the provisions of an applicable double tax treaty, if any.

Profit distributions, fringe benefits, gifts, donations, entertainment expenses, profit adjustments and non-business related expenses are taxed at a flat rate of 20%.

Profit distributions, fringe benefits, gifts, donations, entertainment expenses, profit adjustments and non-business related expenses are taxed at a flat rate of 20%.

Profit distributions, fringe benefits, gifts, donations, entertainment expenses, profit adjustments and non-business related expenses are taxed at a flat rate of 20%.

Royalties are taxed with a 10% WHT rate.

10% if services are provided in Estonia (otherwise 0%)

10% if services are provided in Estonia (otherwise 0%)

Capital gains

Capital gain derived by a non-resident from sale of shares in an Estonian company are not taxed in Estonia, unless the company constitutes a real estate company for tax purposes.

VAT

Majority of domestic supplies is subject to standard 20% rate.

Exemption is available for example to export of goods, EU supplies of goods, services related to international transport and services provided to EU and non-EU companies.

After tax authority’s approval, excess VAT is released to the tax payer’s prepayment account. The general time limit for making the refund is up to 60 days.

VAT registration threshold of taxable supplies is 16kEUR in a calendar year (and 40kEUR starting 2018).

VAT registration is effected within five working days. And Voluntary registration is also possible.

VAT returns have to be submitted and VAT due has to be paid by 20th of every months.

Miscellaneous

General statute of limitation is 3 years. In certain cases the period could be extended to 5 years.

No foreign exchange control.

No thin capitalization rules. A company can be financed with debt to a chosen extent.

 

 

 

Do not hesitate to share your experience in Estonia with us in the comments below. Any comments are welcome !

 

Romain Ponsot

Romain est conseiller en fiscalité au sein d’un leader mondial du shipping. Grâce à son expertise tant en matière de TVA, fiscalité internationale, problématiques intragroupe qu’en matière de fiscalité des particuliers, Romain vous guidera au travers d’articles professionnels et humoristiques. 

Romain, poète dans l’âme, aime particulièrement le couscous et passe beaucoup de temps à glacer ses souliers. Profil LinkedIn
Romain Ponsot

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