Principal assets

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In 2018 Index of Economic Freedom (prepared by the Heritage Foundation) Estonia is ranked 7th out of 180 countries.
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The Ease of Doing Business index by the World Bank (2017) sets Estonia at the 12th position.
20%

Corporate income tax only in respect to all distributed profits (both actual and deemed)

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In Corruption Perception Index Estonia is ranked 21st out of 180 countries.
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Via Estonia’s e-services client can run an Estonian company remotely.

Facts

Official name Republic of Estonia
Capital and
Largest city
Tallinn
Official languages Estonian
Government Unitary parliamentary republic
History Estonia is a small country located at the heart of the Baltic Sea Region. Attractive location between East and West, an excellent business environment, stable government and liberal economic policy, moderate costs and the ease of doing business have already attracted numerous international companies to Estonia. Estonia’s economic freedom is among the highest in the world.
Area • Total: 45,227 km2 ; 17,462 sq mi
• Water: 4.45%
Population • 2019 estimate: 1,323,824
• 2011 census: 1,294,455
• Density: 28/km2 ; 72.5/sq mi
GDP (nominal) 2019 estimate:
• Total: $31.179 billion
• Per capita: $23,653
Currency Euro (€) (EUR)
Time zone
Summer
EET (UTC+2)
EEST (UTC+3)

Taxation

Estonian resident companies and the permanent establishments of foreign entities (including branches) are subject to 20% income tax only in respect to all distributed profits (both actual and deemed).

Distributed profits include:

  • corporate profits distributed in the tax period
  • gifts, donations and representation expenses
  • expenses and payments not related to business
  • transfer of the assets of the permanent establishment to its head office or to other companies

Starting from January 1, 2018 – the corporate income tax rate on regular profit distributions was lowered from 20% to 14%, but only in cases where dividends are paid to legal persons.

Personal Income Tax Rates

Estonia has a proportional (i.e. flat) tax rate of 20%, which applies to all items of income derived by a resident taxpayer. From 2018 onwards, dividends that have been subject to the reduced rate of 14% at the level of the distributing Estonian company will have WHT of 7% levied. Certain pension payments are subject to 10% income tax.

Property Taxes

Land is subject to an annual land tax, which is calculated on the assessed value of land at rates between 0.1% and 2.5%, depending on the municipality.

VAT and Duties

VAT 20%

Duties 0-17% (avg. 5%)

* Disclaimer:
The information and forms provided do not constitute legal or tax advice. The information and forms provided are provided “as is” and without any assurance that the information is correct, complete or current or that the forms are appropriate for your uses. The facts and circumstances of each business person or company may be unique and the clients and customers are encouraged to seek legal or tax advice if they have questions of a legal or tax nature. Author is not accepting any responsibility for this text

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