Page 20 - CEE Tax Guide 2025

Estonia

SIRIUS ADVISORY OÜ
Harju maakond, Tallinn,
Jalgpalli tn 1, 11312
Phone: +372 56495263
www.siriusaudit.ee

Corporate taxes and other direct taxes 1) 7% withholding tax applies to dividend payments
made to resident or non-resident individuals
Income derived by a resident company is not (applies to dividends taxed at a lower tax rate
taxed if retained. The taxation of profit distribution 14/86 prior to the 2025 changes).
(dividends) is cash-based and the tax rate applied 2) Royalties (including payments for the use
will therefore depend on the date of the profit of industrial, commercial, or scientific equipment)
distribution. Upon distribution, CIT is levied at a rate paid to non-residents are generally subject
of 22/78 (28.21%) of the net amount of the profit to 10% withholding tax under domestic law.
distribution, corresponding to 22% on the gross 3) 22% on rental payments to non-residents
amount (distribution + CIT) of the distribution. for the use of immovable property located
Resident credit institutions and Estonian branches in Estonia, and movable property subject
of non-resident credit institutions are required to registration in Estonia.
to make quarterly advance payments of income 4) Interest, royalties, and rental payments
tax on the previous quarter’s profit, at a rate to resident individuals.
of 18%. These advance payments can be taken 5) 10% on payments to non-resident companies for
into consideration when distributing profits and services provided in Estonia.
calculating income tax liability.
6) Salaries, directors’ fees, and service fees paid
The following payments are subject to withholding to individuals.
tax (unless tax treaty restricts or reduces the rate): 7) 10% on payments for the activities of non-
resident artists or athletes carried out in Estonia.
Transfer pricing in Estonia Starting January 1, 2025, the preferential

Arm’s length principle Since 2007 14/86 tax rate on dividends will be replaced
by a standard 22/78 rate.
Documentation liability Since 2007

APA No – VAT and other indirect taxes
Country-by-Country Since 2016 VAT applies to the supply of goods and services
liability performed by a taxable person in the course of their
Master file-local file Since 2019 business activities in Estonia.
(OECD BEPS 13)
applicable A taxable person is one who is engaged in business,
that is, independent economic activity in the
Penalty
course of which goods or services are supplied, and
lack of documentation No – is registered or required to register for VAT.
The standard 22% rate applies to the supply of all
tax shortage 22/78 tax on gross
value of underpayment goods and services not qualifying for the reduced
+ late payment interest rate of 9%, 13% or exemption. A reduced rate applies
to accommodation, books, certain periodicals, listed
Related parties Broad The concept
definition of a related person pharmaceutical products, and medical devices.
encompasses a wide The VAT rate on the export of goods, and the intra-
range of relationships.
Community supply of goods and certain services
Safe harbors No – is 0% (i.e. exemption with credit).

Level of attention paid 9/10 VAT and all other taxes are administered by the
by Tax Authority
Estonian Tax and Customs Board (www.emta.ee).
Central and Eastern European tax guide 2025 Forvis Mazars 20