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Last updated March 2009
Income Tax Rates in Estonia in 2009
- An individual's income is taxable, as at 2009, at the rate of 22%.
- A limited company is liable for tax at the rate of 22%.
- 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 22/78 of the actual payment (22% of the gross profit).
Estonia Capital Gains
- In most cases, capital gains in Estonia are added to the regular income
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
Taxation of Employees:
- 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 - 0%.
Other deductions:
- Dividend - 0%/24%.
- Interest - 0%.
- Royalties -15%.
- Services, artists' income and that of sportsmen and women - 15% (non - resident).
Comments:
- Deduction at source for payments to foreign residents is subject to the Double Taxation Prevention Treaty.
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