Estonia Guide

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Infomation

  • Country:Estonia
  • Date:May 2019
  • Tags:tax, general informations

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Estonia Guide

Corporate Tax Rate (%) 14/20 (a)

Capital Gains Tax Rate (%) 0/14/20 (b)

Branch Tax Rate (%) 14/20 (a)

Withholding Tax (%) (d)

Dividends 0/7 (c)

Interest 0/20 (d)

Royalties 0/10/20 (e)

Rental Payments 20 (f)

Services 0/10/20 (g)

Salaries and Wages 20

(a) Resident companies and permanent establishments of nonresident companies are not subject to tax on their income. They are subject only to tax at a rate of 20% on the gross amount of distributed profits and certain payments made. The tax rate is applied to the net taxable amount divided by a specified percentage. A lower income tax rate of 14% is applied to regular dividends. For further details, see Section B.

(b) Resident companies and permanent establishments of nonresident companies are not subject to tax on their capital gains received. They are subject only to tax at a rate of 14% or 20% on the gross amount of distributed profits. Nonresident companies without a permanent establishment in Estonia are subject to tax at a rate of 20% on their capital gains derived from Estonian sources. For further details, see Section B.

(c) Withholding tax is not imposed on dividends paid to companies. Dividends are subject to 20% (or 14% in certain cases) corporate income tax at the level of the resident distributing companies only. Withholding tax at a rate of 7% is imposed on certain profit distributions to individuals. For further details, see Section B.

(d) Interest payments are generally exempt from withholding tax. Withholding tax at a rate of 20% is imposed on interest paid to resident individuals (including payments made by contractual investment funds on the account of the funds). Interest paid to nonresidents as a result of ownership of contractual investment funds is subject to a 20% withholding tax if more than 50% of the assets owned (directly or indirectly) by the fund during a two-year period preceding the date of the interest payment is real estate located in Estonia and if the interest recipient has at least 10% ownership in the contractual investment fund at the moment of receiving the interest. Withholding tax is not imposed on interest paid from the profits of contractual investment funds if the profits have already been taxed.

(e) Withholding tax at a rate of 10% is imposed on payments to nonresident individuals and companies. Royalties paid to companies resident in other EU countries or Switzerland are not subject to withholding tax if the provisions of the EU Interest-Royalty Directive are satisfied. A 20% withholding tax is imposed on payments to resident individuals.

(f) Withholding tax at a rate of 20% is imposed on payments to resident individuals and nonresidents.

(g) The 20% rate applies to payments to nonresidents from low-tax jurisdictions (a low-tax jurisdiction is a jurisdiction that does not impose a tax on profits or distributions or a jurisdiction in which such tax would be less than of the Estonian tax payable by resident individuals on a similar amount of business income). The 10% rate applies to payments to other nonresidents for services rendered in Estonia. A 0% rate may apply under double tax treaties.

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