Tax authorities
Estonian Tax and Customs Board
Narva mnt 9j, 15176 Tallinn
Tel: +372 683 5700
Fax: +372 683 5709
Website: www.ma.ee
Tax rates at a glance
(As of September 2009)
| Corporate tax rate (%) |
21(a)(b) |
| Capital gains tax rate (%) |
0/21(b)(c) |
| Branch tax rate (%) |
21(a)(b) |
Withholding tax (%) |
(d) |
| Dividends |
0/21(b)(e) |
| Interest |
0/21(b)(f) |
| Royalties |
15/21(b)(g) |
Rental payments |
21(b)(g) |
| Services |
15/21(b)(h) |
| Salaries and wages |
21 |
(a) Resident companies and permanent establishments of nonresident companies registered with the Estonian authorities are not subject to tax on their income. They are subject only to tax at a rate of 21% on certain payments made by them. The tax rate is applied to the taxable amount divided by a specified percentage.
(b) The 21% tax rate was expected to be reduced to 20%, effective from 2009. However, at the time of writing, a draft law that would postpone the tax reduction was under discussion in parliament. This law is expected to be adopted. As a result, the tax rate is likely to remain at 21% for 2009.
(c) Resident companies and permanent establishments of nonresident companies registered with the Estonian authorities are not subject to tax on their capital gains. Nonresident companies without a permanent establishment in Estonia are subject to tax at a rate of 21% on their capital gains derived from Estonian sources.
(d) These are final withholding taxes.
(e) Withholding tax at a rate of 21% is imposed on dividends paid to nonresident companies owning less than 10% of the capital of the payer and nonresidents from low-tax jurisdictions. Other dividends are exempt from withholding tax.
(f) Withholding tax at a rate of 21% is imposed on interest paid to resident individuals and to the portion of interest paid to nonresident individuals and nonresident companies that is more than the market interest rate. All other interest payments are exempt from withholding tax.
(g) Withholding tax at a rate of 15% is imposed on payments to nonresident individuals and companies. However, under the EU directive on interest and royalties, no tax is withheld from royalties if the beneficial owner of the payment is an associated company or permanent establishment in another EU member state or Switzerland. A 21% withholding tax is imposed on payments to resident individuals.
(h) The 21% rate applies to payments to nonresidents from low-tax jurisdictions (a low-tax jurisdiction is a jurisdiction with a tax rate of less than 1/3 of the Estonian tax rate). The 15% rate applies to payments to other nonresidents for services rendered in Estonia.
Source: Ernst & Young