Company Formation Estonia

CHECK COMPANY
NAME AVAILABILITY (Step 1)



Articles

Corporate Tax in Estonia

Updated on Tuesday 02nd June 2015

Rate this article
5 5 1
based on 0 reviews


Corporate-Tax-in-Estonia.jpg

According to Estonian Corporate Tax System, any undistributed corporate profit, of either local companies or  foreign companies registered in Estonia, is tax-exempt. Both active (such as trading) and passive (dividends, interest, royalties) types of income are also tax-exempt. This exemption also covers any capital gain from all kind of sales - immovable property, shares, securities etc.
 
 
Corporate income tax-exemption for companies registered in Estonia
 
For any company registered in Estonia, distributed dividends are exempt from corporate income tax if these are derived from:
 
  • dividends received from any Estonian, Swiss, EU or EEA (European Economic Area) tax resident corporations for which the Estonian company owns at least 10% of the shares;
  • profits paid by any permanent establishment („PE”) in Switzerland, EU or EEA;
  • capital reductions, share buy-backs or liquidation proceedings which have been subject to taxation by the distributor of the income; 
  • dividends from any foreign company in which the Estonian company has at least a 10% shareholding, provided that either the underlying company has paid foreign tax or foreign income tax for the profit;
  • profits from a foreign PE in all other countries, provided that such profits have been subject to tax in the country of the PE.
  • Estonian corporate tax system
 
Before opening a company in Estonia, you must know that there are no special tax incentives in Estonia. Instead, the corporate tax system in Estonia makes it possible to postpone the taxation of corporate profits for an indefinite period of time. Therefore, we can say that the whole Estonian corporate tax system is a tax incentive that stimulates economic growth, by encouraging re-investment of profits.
 
According to the same Estonian corporate tax system, corporate profits - derived from resident companies and permanent establishment of the foreign companies (branches included) - are taxed only after they are distributed as dividends, liquidation proceeds or deemed profit shares (like expenses and payments not related to business, fringe benefits, gifts, donations and business entertainment expenses). For fringe benefits, the payments are made by the employer, as income tax and social tax.
 
 
Corporate tax in Estonia - tax filling period
 
Generally, branches and subsidiaries are subject to same tax system in Estonia. For any corporate company registered in Estonia, the tax period is one month. The income tax must be paid by the 10th day of the following month.
 
In Estonia, distributed corporate profits are generally subject to a 21% income tax (at a rate of 21/79 on the net amount of profit distribution). According the Estonian law, any company can distribute dividends in value of maximum 79% on the net amount of profit distribution.
 
For more information related to how to open a company in Estonia or corporate taxes in this country, please contact our company formation specialists in Estonia.

Comments

There are no comments

Comments & Requests


Please note that client queries should NOT be posted here but sent through our Contact page.

Meet us in Tallinn

Call us now at +372 5057800  to set up an appointment with our consultants in Tallinn. As our client, you will benefit from the joint expertise of local advisors  for opening a company in Estonia.

We offer:

-cost-efficiency: competitive company formation prices;

-prompt response to your inquiry (24 hours)

-free and complete legal information featured on our site, at your disposal.

 

Online Incorporation

tax-calculator-estonia

Tax Calculator

tax-calculator-estonia

Testimonials

Mihai-Cuc.jpg

CompanyIncorporationEstonia.com has a reliable team of company formation experts that helped my clients with the entire company registration procedure in this country. I was very pleased with our collaboration.

Mihai Cuc, Partner of
Enescu & Cuc Law Firm
www.RomanianLawOffice.com

Read more testimonials

We Recommend ClientPedia

This website is marketed by ClientPedia

Banner-Promoting ClientPedia-244px.jpg

We accept online payments

paypal-logo.png