Estonia Tax 2018

Income Tax Rates in Estonia in 2015

• An individual's income is taxable, as at 2015, at the rate of 20%.
• A limited company is liable for tax at the rate of 20%.
  - The tax does not apply to accumulated undistributed profits.
  - The tax applies to an actual distribution of profits by the company, mainly to a dividend or to gifts and benefits that have been distributed. The tax payable is at the rate of 20/80 of the actual payment (20% of the gross profit).

Estonia Capital Gains

• In most cases, capital gains of companies and individuals in Estonia are added to the regular income.
  For companies the tax charge is when distributed.

Estonia Overseas Income

• An individual who is resident in Estonia and an Estonian company are liable for tax on their income outside Estonia as well.
• From the aspect of the individual:
  - A stay in excess of 183 days a year in Estonia qualifies him as a resident of Estonia.
  - A permanent residence in Estonia qualifies him as a resident of Estonia.

Estonia Reporting Dates and Payment

• The tax year in Estonia ends on December 31. Companies are obligated to report monthly with payment on the 10th day after the end of the current month.
• An individual is obligated to submit an annual report by March 31. Penalties are imposed in the case of a delay in submitting the annual report as well as a fine for each day's delay in payment of the tax due.
• An individual whose entire income is from a salary or whose income as a self-employed individual is less than the amount defined in law, is exempt from submitting an annual report.

Estonia Deduction of Tax at Source

• As regards salaried employees, the employer is obligated to deduct tax at source. Each month from a salaried employee and to make additional contributions to social security.
• The employer's contribution to national insurance is 33% and that of the employee is 1.6% for unemployment insurance.

• Dividend - 0%.
• Interest - 0%.
• Royalties -10%. (zero if subject to the EU directive)
• Services, artists' income and that of sportsmen and women - 10%.

• Deduction at source for payments to foreign residents is subject to the Double Taxation Prevention Treaty.