The Estonian taxation system is one of the most profitable in the world. It includes state and local taxes. A tax is a financial obligation that the law imposes on a taxpayer and is enforceable in the manner, amount and duration prescribed by law. The taxpayer is obliged to pay only the state and local taxes prescribed by law.
Taxes in Estonia are administered by the Estonian Board of Taxes and Customs. A large proportion of tax returns are available via the Internet.
- Income tax on retention rate — 20%.
- The income tax rate of a legal entity applied to dividends of profits is 20/80. The income tax rate of a legal entity, which is applied to a regularly distributed profit dividend, is 14/86, and income tax is withheld at a rate of 7 per cent in addition to dividends paid to an individual.
- The amount of income tax-free depends on the income received (up to EUR 500 per month and up to EUR 6,000 per year).
- The social tax rate is 33%. The monthly rate on which the minimum social tax obligation is based is 584 euros; respectively, the minimum social tax duty is 192.72 euros per month.
- Social tax is levied to obtain the income necessary for State pension and health insurance, from payments made in the context of an employment or service relationship, from payments made in favour of a member of the management or control body of a legal entity, Payments made under a contract of obligations concluded for the provision of services to an individual, as well as special benefits and income tax paid from that place. In such cases, the payer of the social tax is the person who makes the payment, and the tax period is the calendar month.
- Unemployment insurance rates: 1.6 per cent for the worker and 0.8 per cent for the employer.
- The compulsory cumulative pension payment rate is 2 per cent.
- In calculating the December 2020 payroll and other payments and calculating the taxes (payments) accrued/withheld, it should be borne in mind that taxes are calculated on a cash basis.
While working with us, our clients quite often need some professional advice and help. For these purposes, Company in Estonia OÜ has developed the tax advisor service.
Advice is provided in order to give an overview of taxation in case of international transactions arising in the course of your Estonian company’s activity. The exact scope and cost of advice depends on your query.
International companies shall be aware of taxation and laws in the countries of activity. We will be happy to advise you on issues related to taxation, tax agreements, and potential risks that may arise during your company’s operation.
Issues that may be addressed when getting advice:
- Taxation of an Estonian company
- Tax agreements between Estonia and other countries
- Analysis of the identification of potential operational risks
- Taxation of dividends and other income
- Cross-border VAT rules
- Taxes arising in different countries
- Send us your questions so that we can determine the scope and cost of advice.
- Get a quote from us.
- Select the time, language and format of consulting (by phone, via Skype, at our office)
Apart from accounting services and tax advisor services, Company in Estonia OÜ offers accounting services for Estonian companies that already have a VAT number, as well as accounting services for companies without a VAT number. We have successful experience in various business segments and are currently developing over 900+ companies in Estonia and abroad. Therefore, our company additionally offers clients assistance in registering a VAT number in Estonia, assistance in obtaining an EORI number, and drawing up an annual report.