[vc_row][vc_column][vc_column_text]A recent analysis of the Startup Estonia (SUE) program and the Estonian E-Residency program shows that E-Residents have created almost a third of the startups in Estonia – of the 1,200 Estonian startups listed in the SUE database, 348 were created by E-Residents of Estonia. Most of them are companies engaged in business software development and financial technology solutions.
According to Startup Estonia’s chief executive Eva Peeterson, Estonia’s innovative digital society and international reputation attract talent from all over the world, offering beginners an excellent platform for growth. ” The diverse start-up sector is an important engine of innovation and economic growth in Estonia. Thanks to the E-Residency Program, the Estonian Startup Community can rapidly develop,” said Peeterson. She added that the e-residents brought unique skills, international experience and cultural richness to the local startup landscape, strengthening Estonia’s position as one of the most attractive innovation centers in Europe.
According to Natalya Storozhuk, a resident and founder of the Estonian startup company PRNEWS.IO, local startups gave the Estonian business landscape an international image. ” I admire the aspiration of Estonian startup entrepreneurs to help newcomers. There is a friendly atmosphere of support and excellent interaction between proven startups and Freshmeikers,” said Storozhuk. Vicky Brock, a resident and recognized startup entrepreneur, added that Estonian startups have invaluable experience in how to use the strengths of a digital society to scale the company up effectively. ” Estonian startups serve as a huge knowledge bank, and even the most experienced startups have something to learn from their Estonian colleagues,” noted Brock.
The e-residency programme was established at the end of 2014 to provide foreign citizens with secure access to Estonian public electronic services. Since the launch of the e-residency programme, more than 83,000 e-residents have established more than 17,800 new enterprises in Estonia. In addition to the indirect economic income, which is linked, inter alia, to the growth and investment of Estonian e-resident enterprises, the direct economic impact of the programme on the State budget of Estonia amounted to more than €68 million.
Startup Estonia is a national ecosystem development programme for Estonian startups, aimed at making Estonia the birthplace of many success stories in the future. The aim of the organization is to make Estonia a better place in the world for startups. To this end, contacts and partnerships are being developed with the best start-ups, incubators, business accelerators, and the private and public sectors. Startup Estonia implements KredEx.
LKS Consult OÜ team assists startups, company formation and helps in legalising activities in Estonia. Contact us and get a consultation today![/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column][vc_column_text]Consolidated financial statements is the financial reporting of a group of interconnected organizations considered as a single economic entity or as a consolidated group. It describes the group’s property and financial position as of the reporting date, as well as its financial performance for the reporting period. A characteristic feature of consolidated group accounts is that the assets, liabilities, revenues and expenses of two or more legally separate entities are combined into a separate system of financial statements.
The accounting records of the consolidation group (concern) (hereinafter also a consolidated financial statement) include, in addition to the business transactions of the entity responsible for accounting, under its dominant influence
Dominant influence is the ability to make decisions about the financial and operational policies of a subsidiary.
Requirements for consolidated financial statement
parent and subsidiary must have one accounting period
the accounts of the subsidiary and the parent enterprise must be in the same currency
The subsidiary and the parent should have common accounting standards
When to submit a consolidated financial statement
According to RTJ 11 on accounting in Estonia, the main indicator for determining the influence of a related enterprise (dominant or significant) is the presence of control over that enterprise. Control may also exist if the participation of the parent enterprise is less than or equal to 50 per cent, but the parent enterprise (RTJ11 p.8):
1) has control over more than 50% of voting rights by agreement with other investors,
2) Supervises the financial and operational policies of the enterprise on the basis of a contract or charter;
3) Be able to appoint and withdraw most of the existing guidance and parent bodies;
4) has the power to determine the decisions of the assemblies of the current leadership and the higher-ranking bodies.
If the above conditions are met, the enterprise under control is considered to be a subsidiary and must be consolidated.
Payment of dividends by the subsidiary to the parent
According to Article 335 of the Estonian Commercial Code, the parent enterprise, which prepares a report for the economic year in the consolidated group, decides on the distribution of profits on the basis of consolidated reports of the consolidated group. Even if there is no obligation to compile a consolidated report, and they did not voluntarily consider it necessary to do so, the parent enterprise may transfer to its owners the dividends declared by the subsidiary on the basis of the annual accounting report with identical accounting periods if it does not reflect the subsidiary’s accounting at acquisition cost, a by sharing.
According to the report, it is possible to reflect the subsidiaries as a solo report of the parent enterprise, and, in the case of the consolidated annual accounting report, in the parent’s non-consolidated annual accounting report, the acquisition cost method or equity method.
LKS Consult OÜ offers full support in compiling a consolidated financial statement for your Estonian company and provides a full range of accounting services for an Estonian company. Contact our specialist and get a price offer as soon as possible.[/vc_column_text][/vc_column][/vc_row]
Many enterprises fail to obtain licenses from the financial regulator of the city-state.
Crypto entrepreneurs lured into Singapore by a clear openness to the growing industry are beginning to realize how difficult it is to work legally in a city-state.
Singapore strictens its regulations towards crypto licenses
The regulation of cryptocurrency in Singapore is primarily concerned with the introduction of improved standards for service providers associated with crypto assets. Views have been expressed around the world that a vibrant digital asset market is a potential haven for money-laundering and the financing of terrorism. Blockchain security studies conducted in 2020 show that 56% of digital currency services have weaknesses in KYC and AML controls. Therefore, regulators need to pay more attention to decentralized finance. Hence, the new FATF recommendations on Anti-Money Laundering/Combating the Financing of Terrorism (POD/FT) for digital assets.
Given that the regulation of cryptocurrency in Singapore is relatively high compared to many other jurisdictions, the government responded immediately to the new recommendations and drafted amendments to the PSA Payment Services Act, enacted in 2019. (entered into force in January 2020).
Key changes:
Introduction of improved standards for virtual asset service providers
The right of MAS to regulate market crypto participants who do not have their own cryptocurrencies
Tighter control of proper implementation of AML/CTF rules with careful monitoring of transactions
Improved consumer protection with risk notification
Separation of clients’ assets from those of the service provider itself
In the government’s view, such regulation of cryptocurrency in Singapore would allow MAS to respond quickly and in a timely manner to all changes in the cryptocurrency industry, maintaining the stability of the state’s financial system. The monetary authority of a country is being extended to ensure effective fiscal policy and a high level of consumer protection.
Together with tighter enforcement of AML/CTF, the new legislation will allow MAS to exercise oversight not only over Singaporean crypto companies, but also globally over organizations that are based outside the jurisdiction and conduct cryptocurrency business. In addition, technology risk management requirements for financial institutions have been developed, as well as a dispute resolution procedure that provides crypto clients with an accessible way to resolve disputes.
Hence, here are the main disadvantages of starting crypto business in Singapore:
In the light of recent legislative developments, Singapore is only suitable for certain platforms whose tokens are not securities.
Expensive legal services.
Strict AML-legislation. It is a set of measures to ensure the fight against illegal money trafficking and the financing of extremist organizations.
The need to obtain a MAS license. This takes time and effort, registration implies a number of essential requirements.
Estonian jurisdiction has something to offer
Only one cryptocurrency license is required to legalize any crypto-activity in Estonia. This strengthens its position among the most preferred jurisdictions to launch a crypto-project.
Estonia is 99% digitalised, thereby offering unlimited opportunities to entrepreneurs. The favorable tax system, innovative e-Residency programme, fintech opportunities, advanced business ecosystem, rich talent pool— that’s just the beginning of what to expect from the Estonian business environment.
More and more people are entering the Estonian business market by investing in cryptocurrency, and it is undoubtedly worthwhile: the country welcomes every aspiring entrepreneur.
In less than 3 years, Estonia has issued more than 2,000 cryptocurrency licenses (400 active as of now), thereby strengthening its position among the most preferred jurisdictions for launching a blockchain project.
Globally, Estonia has been selected as a favorable ecosystem for building startups, offering a 0% income tax rate. In addition, it is necessary to take into account the following favorable characteristics of doing business in Estonia: minimal bureaucracy, digitisation of doing business, online company registration, and low administrative costs. Let us remind you that for a completely remote management of your company from anywhere in the world, you can use an electronic resident card.
The IT jurisdiction of Estonia is considered one of the most crypto-lenient of its kind (read our comparative analysis here) with facilitated conditions for obtaining a license for the exchange of cryptocurrency in the blockchain technology industry. In other words, the so-called single cryptocurrency license is an official permission to conduct a regulated cryptocurrency business in Estonia.
Many new cryptocurrency and trading platforms are created every day, and a significant part of them have received their license in Estonia, since the local order presupposes an easier process of obtaining a crypto-license, compared to the similar process in other countries.
Required documents for applying for a crypto-license in Estonia:
A Member of the company’s Board can apply for a cryptocurrency license in Estonia. An application for a license can be submitted electronically with an e-resident card, when visiting a notary in Tallinn, or by issuing a power of attorney to a representative of LKS Consult OÜ , so that our lawyer can submit the application for you.
The state fee for an application for a license is 3,300 EUR. The fee must be paid to the Estonian Ministry of Finance(FIU). The issue of a license is decided by the Rahapesu andmebüroo (RAB) within 60 working days after the application is submitted.
Taking into account the needs of customers from all over the world, LKS Consult OÜ has developed an all-in-one offer “Company & Crypto-License in Estonia”, which includes registration of an Estonian company plus all the necessary services for obtaining a single crypto-license.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column][vc_column_text]The topic of cryptocurrency and taxes is relatively new from the point of view of taxation in Estonia and despite the fact that crypto assets are not specifically mentioned anywhere in Estonian tax legislation, they are regulated by ordinary tax rules, because the company’s turnover is taxed. This means that it is legal to trade, own and store crypto assets in Estonia.
NFT is the same asset as other cryptocurrencies. The only difference is that it is not necessary to use the FIFO method or the weighted average method, because NFT is distinguishable, and the value of the acquisition and the cost of selling each particular crypto of the asset is known. According to the Estonian Tax Department, The tax exemption on movable property does not currently apply to the NFT because the Estonian Tax and Customs Department considers that the NFT cannot be used for personal purposes, but this may change in the future.
The sale of NFT tokens is an electronic service subject to a value-added tax. The VAT rate is 20 per cent or 0 per cent, depending on the specific situation. It is important to bear in mind that taxation arises only when a company is registered as having a sales tax obligation. Obligation to register as a sales tax liability arises when the company is liable for a turnover of 40,000 euros from the beginning of the calendar year. Please note that sales tax payers can register before reaching a turnover of €40,000.
In order to find out at what rate the sale of NFT tokens will be charged, we recommend you to contact our specialist for individual advice.
However, if NFT is sold to persons of another EU state who are not registered as liable for sales tax, and if the total turnover of all EU countries by such legal persons has reached 10,000 euros, it is either necessary to register as a sales tax liability in each of the states where the partner is operating, or to register in Estonia as a sales tax liability and join the OSS system.
How do companies declare taxes on cryptocurrency?
VAT tax returns are filed every month up to the 20th day with the Estonian Customs Department.
The profit from the sale of NFT to the Estonian Company is taxed only if it is distributed. As long as these funds are not withdrawn from the company through dividends or any other means of distributing profits, the transaction is tax-exempt.
Also, if in the case of the business of the Estonian Company, some transactions are profitable and some are unprofitable, when filing the declaration the company can account for losses, thereby reducing the tax burden. As long as the company does not distribute dividends, no tax is levied. Income and social tax returns are filed before the 10th of each month.
In addition, income tax may be levied, for example, on special benefits or on payments and expenses not related to the business of the company, as well as in case of expenses for gifts and donations and for reception of guests and business partners.
How do individuals declare taxes in cryptocurrency?
Individuals in Estonia file their tax returns once a year. No other interim declaration is required by tax legislation. The annual declaration should state:
Transaction date
Purchase price
Sale price
Only transactions that make a profit are declared, and the tax rate is always 20 per cent. Loss-making transactions are not counted. It is also important to note that crypto assets are not equities, which means that an investment account cannot be used to delay any tax claims, as crypto assets do not fall within the legal definition of shares/securities.
For detailed advice on the taxation of NFT tokens in Estonia and other accounting services in Estonia, we recommend contacting the accountant or tax consultant of LKS Consult OÜ .[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column][vc_column_text]The Estonian Electronic Commerce Union has signed a cooperation agreement with eBay. This will help support thousands of small businesses and allow local entrepreneurs to sell their goods worldwide, writes Postimees.
With the E-Commerce Alliance and eBay programme, local enterprises will appoint a personal eBay development manager, provide support and a personal training programme that offers the necessary tools and best practices, as well as higher sales limits to ensure rapid growth. For the first three months this service is free of charge.
“A free training program and marketing support will help thousands of our small businesses and online shops to start selling their products abroad and to increase turnover several times – said Têne Väert, Executive Director of the Estonian Electronic Commerce Union. – eBay – is an important platform through which Estonia can present its high-quality and handmade products to the world”.
The Estonian E-Commerce Union is an umbrella organization of about 450 companies, established in 2008.
[vc_row][vc_column][vc_column_text]According to the summary report of the Development Monitoring Center “Property taxes in Estonia and European countries”, Estonia is the country with the lowest property taxes in the European Union. If property taxes were to reach the EU average, it would bring in more than 500 million per year.
“Estonia’s tax system is based mainly on taxes on labor and on taxes on consumption. At the same time, property taxes are less used to finance public expenditure, said Magnus Pieritz, an expert from the Development Monitoring Centre. — In EU countries, property taxes account for about 5 per cent of total tax revenue. If property taxes in Estonia were to reach the EU average, in 2019 this would mean that revenues to the state budget would be more than 530 million euros more”.
Property taxes include taxes on real estate, net assets, inheritance and gifts, as well as taxes on financial transactions and capital transactions, such as transactions in securities and shares of enterprises. According to Pieritz, in many EU states (including Estonia), most property taxes consist of property taxes.
In Estonia, the main property tax is the land tax, which is paid to local governments. “ For example, real estate taxes accounted for 0.6% of all tax revenues in Estonia in 2019. The average in the European Union was 3 per cent. Since 2012, the land tax in Estonia has remained in the range of 60 million euros per year”, noted Pieritz.
According to Magnus Pieritz, changes in Estonia’s tax structure are inevitable in the future. “ In view of the shrinking of the working-age population, the development of digital technologies and changes in forms of work, labor taxes can no longer effectively cover public expenditures. If the costs remained the same or increased, it would be necessary to find a way to cover those costs”, he added.
According to Pieritz, when speaking of global trends, it is important to bear in mind that in recent decades the world has become more unequal in terms of wealth. “ As much as 45 percent of the estate goes to the top 1 percent. The printing of money by central banks also exacerbates inequality, as it increases property prices”.
In addition, the fight against concealment of property is being strengthened through new info-technology solutions and more effective cooperation between countries. “ This is becoming a fertile ground for wider application of property taxes. On the other hand, new asset classes are emerging, such as cryptocurrency, whose value is very difficult to value,” added Pieritz.
One of the research areas of the Development Monitoring Center in 2021 is “Tax structure that will stand the test of time”. In the study, the authors consider how to cover the costs of an ageing society and how to change the tax system over the next 15 years.
The Development Monitoring Center is a research center established in the Riigikogu Office, which analyses the long-term prospects of society and the economy. The Center conducts research projects to analyse long-term trends in Estonian society and to identify new trends and development directions.
Accounting services in Estonia
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Consult OÜ provides accounting services and legal advice on taxation. Please contact us and present your enquiry.[/vc_column_text][us_btn label=”order now” link=”url:https%3A%2F%2Fwww.estonia-company.ee%2Fcontacts%2F” align=”center” css=”%7B%22default%22%3A%7B%22margin-top%22%3A%2210px%22%2C%22margin-bottom%22%3A%2220px%22%7D%7D”][/vc_column][/vc_row]
[vc_row][vc_column][vc_column_text]Estonia currently offers one of the most convenient tax systems in the world. The active support of the state to small businesses has made Estonia a European center of entrepreneurship.
All business processes can be tracked online (company registration, filing of declarations, communication with state authorities).
Income tax on legal person – 20/80, applies to income distributed as a dividend
Income tax for legal person – 14/86, applies to regularly distributed dividend profit
Social tax – 33%, minimum social tax – 192.72 euros per month
Insurance against unemployment:
for an employee – 1.6 per cent,
or employer – 0.8 per cent
Cumulative pension – 2% if no application for suspension of contributions is filed
Three rates of turnover tax 20%/9%/0
Minimum wage
C 1.01.2022 minimum wage for full-time work is EUR 654 per month or EUR 3.86 per hour.
Accounting for tax-free income of a resident of Estonia
If the annual income is up to €14,400, the tax-free income will be €6,000 per year.
If the annual income is between €14,400 and €25,200, the non-taxable income is calculated by the formula.
If the annual income is 25,200 euros, the tax-free income will be zero.
Annual income includes:
Wages (both in Estonia and abroad)
Dividends (both regular rate and simplified rate)
Dividends not subject to income tax in Estonia
Other income taxable (both in Estonia and abroad)
Accounting for non-taxable income of non-resident in Estonia
A non-resident of Estonia, if he is a resident of a State party to the Agreement of the European Economic Area, is entitled to tax-free income in the same way as a resident of Estonia.
For the application of the non-exhaustive minimum, it is necessary to provide:
Statement
Certified Resident Certificate
A non-resident of Estonia, if he is a resident of a State not party to the Agreement of the European Economic Area, is not entitled to tax-exempt income.
States Parties to the Agreement of the European Economic Area:
[vc_row][vc_column][vc_column_text]Non-reciprocable token (NFT, non-fungible token) is a type of cryptographic token, each specimen of which is unique and cannot be replaced by another analogous token without changing the value and substance of the object.
Non-reciprocable token is a certificate of uniqueness of a digital object – a digital cryptographic certificate that confirms ownership of a digital asset. The NFT does not prevent copying of a digital artifact, but only secures ownership of the original copy of a digital asset. NFT tokens are used on open platforms to confirm ownership of digital assets. NFT tokens are most commonly used as examples of computer art, collectible digital objects, and characters in online games. Fully digital art was one of the first uses of unique tokens, as they provide evidence of the authenticity and possession of a digital object.
Like cryptocurrency, NFT is created using a blockchain that acts as a database to record all transactions. Blockchain guarantees authenticity of non-reciprocable tokens. With this system, any user can verify the original and history of each particular NFT. By buying a NFT token, the user buys a certificate on the product. The product itself is not moved anywhere. It is on the Perpetual Repository (IPFS). This certificate is essentially a line of code that confirms that it is the owner of the token who owns the original copy of the object. The NFT token is compared to a painting that may belong to a gallery, a museum or a private individual, but the audience can see it in a catalogue or exhibition.
The NFT market grows and develops every year, and captures millions of investors, collectors, gamers, and all those who are interested in obtaining unique objects in digital form around the world. In 2021, the NFT market showed an increase of 2,500% compared to 2020. The main beneficiaries of the NFT market were websites (NFT marketplaces), which provide the opportunity for the simplest purchase and sale of NFT.
NFT marketplace operating principle
Unlike cryptocurrency (BTC, Ethereum, etc.) it is not possible to trade non-reciprocable tokens directly on ordinary cryptocurrency exchanges. You can buy and sell NFT on special trading platforms that allow to release, store and trade non-reciprocable tokens. Major marketplaces such as:[/vc_column_text][/vc_column][/vc_row][vc_row el_class=”logo”][vc_column width=”1/4″][us_image image=”7028″ align=”center” link=”url:https%3A%2F%2Fopensea.io%2F|target:_blank” css=”%7B%22default%22%3A%7B%22margin-top%22%3A%2237px%22%7D%7D” onclick=”custom_link”][/vc_column][vc_column width=”1/4″][us_image image=”7029″ align=”center” link=”url:https%3A%2F%2Frarible.com%2F|target:_blank” onclick=”custom_link”][/vc_column][vc_column width=”1/4″][us_image image=”7030″ align=”center” link=”url:https%3A%2F%2Fsuperfarm.com%2F|target:_blank” css=”%7B%22default%22%3A%7B%22margin-top%22%3A%2235px%22%7D%7D” onclick=”custom_link”][/vc_column][vc_column width=”1/4″][us_image image=”7031″ align=”center” link=”url:https%3A%2F%2Fmintable.app%2F|target:_blank” onclick=”custom_link”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]These sites generate NFT with special smart contracts that add a unique set of information (metadata) and specify its main parameters (name, permanence, inseparability, address/number, etc.) to each token. After that, you can buy and sell non-replaceable tokens on the site at a fixed price or through auctions.
NFT niches and applications
Most FFTs are used to commercialize digital art from digital copies of real pictures to memes. For example, on the OpenSea marketplace you can buy, sell and transmit images, videos, gifs and music. This platform runs on Ethereum and releases NFT using the ERC721 and ERC1155 protocols. Visual art is not the only field of application of non-retestable tokens. They can also be used for trading collectible cards (NBA Top Shot), game characters (CryptoKitties), real estate (Mintable), virtual worlds (Metaverses), and any other sphere where you can token ownership of something.
Standards for non-reciprocable tokens
To run a NFT on a blockchain basis, it is necessary to use certain token standards that guarantee that the asset will act in a certain way and demonstrate, how to interact with the main functions of the asset. Currently, the most popular standards for running NFT are:
ERC721. Used to uniquely identify someone or something based on Ethereum. It supports smart contracts and offers an authorized transfer method using transferFrom.
ERC1155. By standard, identifiers represent not just one unique asset, but an asset class. This is much more effective than the ERC721 standard.
BEP. The largest cryptocurrency exchange, Binance, launched a new BSC blockchain with support for smart contracts and compatibility with the Ethereum Virtual Machine (EVM). And it has the analogues ERC721 and ERC1155 for NFT – BEP-721 and BEP-1155, respectively.
In which country to launch NFT project?
If you want to start a project using NFT, Estonia is the most appropriate jurisdiction. In Estonia, the issue of NFT tokens is not regulated by law – there are no restrictions provided by law for the creation and further sale of NFT. Income earned in virtual currency is taxed in the same way as income earned in regular currency.
LKS Consult OÜ specialists will be glad to help you with the launch of the project using NFT and will advise you on company formation in Estonia.[/vc_column_text][/vc_column][/vc_row]
Since December is the most magical time of the year, our team has prepared a special offer for all of our clients. Due to the upcoming holidays, during this month we are providing several discounts for the services you order.
(This offer is available until 31st of December of 2021)
[vc_row][vc_column][vc_column_text]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.
There are many statutory preferential business opportunities in Estonia. Here is one of them, which is unique in its financial and legal nature in comparison with other EU countries. According to the Estonian legislation, at the time of the company establishment there is no need to contribute its share capital (from 2,500 EUR). The articles of incorporation determine the period for the authorised capital to be contributed, which can be set from a year up to a date of payment of dividends. It should be considered that while the share capital is not contributed, the owner (founder) is personally liable with their unauthorised funds in the share capital.
Taxes in Estonia are administered by the Estonian Board of Taxes and Customs. A large proportion of tax returns are available via the Internet.
Rates
Private person 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.
According to the Social Tax Act, social tax is paid by:
resident legal person
a natural person
a non-resident who has a permanent place of business in Estonia or who makes payments
the establishment of a State, a municipality or a city
the State, a municipality or a city in cases specified in article 6 of the Social Tax Act.
VAT
Value Added Tax – VAT, levied on goods and services sold in business activity, imports of goods from non-EU countries, and purchases of goods from countries of the EU. The final consumer pays Value-added tax.
Companies are obliged to register a VAT number when sales in Estonia exceed 40,000 EUR from the beginning of the calendar year. A company can also apply for VAT registration before this threshold value is reached.
If sales do not exceed 40,000 EUR in Estonia, VAT payers can be registered on a voluntary basis.
Obligations
As a sales taxpayer, you must:
When selling a good or providing a service, add a sales tax to the sales price; Keep a record of turnover tax
Calculate and pay the sales tax
Keep the documents relating to the transactions and issue the appropriate invoices
From the taxable turnover, you can deduct the turnover tax (turnover input tax) paid on the purchase of a good or service used for the purposes of the taxable turnover.
According to the Estonian regulations, the total rate of turnover tax is 20 per cent of the taxable value of the good or service.
The specialists of LKS Consult OÜ will be happy to assist you with accounting services for your Estonian company.[/vc_column_text][/vc_column][/vc_row]
A recent analysis of the Startup Estonia (SUE) program and the Estonian E-Residency program shows that E-Residents have created almost a third of the startups in Estonia – of the 1,200 Estonian startups listed in the SUE database, 348 were created by E-Residents of Estonia. Most of them are companies engaged in business software development and financial technology solutions.
Consolidated financial statements is the financial reporting of a group of interconnected organizations considered as a single economic entity or as a consolidated group. It describes the group’s property and financial position as of the reporting date, as well as its financial performance for the reporting period. A characteristic feature of consolidated group accounts is that the assets, liabilities, revenues and expenses of two or more legally separate entities are combined into a separate system of financial statements.
The regulation of cryptocurrency in Singapore is primarily concerned with the introduction of improved standards for service providers associated with crypto assets. Views have been expressed around the world that a vibrant digital asset market is a potential haven for money-laundering and the financing of terrorism. Blockchain security studies conducted in 2020 show that 56% of digital currency services have weaknesses in KYC and AML controls. Therefore, regulators need to pay more attention to decentralized finance. Hence, the new FATF recommendations on Anti-Money Laundering/Combating the Financing of Terrorism (POD/FT) for digital assets.
The topic of cryptocurrency and taxes is relatively new from the point of view of taxation in Estonia and despite the fact that crypto assets are not specifically mentioned anywhere in Estonian tax legislation, they are regulated by ordinary tax rules, because the company’s turnover is taxed. This means that it is legal to trade, own and store crypto assets in Estonia.
According to the summary report of the Development Monitoring Center “Property taxes in Estonia and European countries”, Estonia is the country with the lowest property taxes in the European Union. If property taxes were to reach the EU average, it would bring in more than 500 million per year.
Non-reciprocable token (NFT, non-fungible token) is a type of cryptographic token, each specimen of which is unique and cannot be replaced by another analogous token without changing the value and substance of the object.
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.