When applying Estonian CIT, the question arises as to whether remuneration for the redemption of shares financed from pre-lump sum profits should be treated as hidden profit. This is not an abstract issue – it affects many entities that accumulated significant reserve capital before choosing the lump sum and are now planning to redeem shares.…
Why TP obligations for 2024 matter for businesses The upcoming autumn marks the need to fulfil transfer pricing obligations for 2024. Businesses are required to prepare the Local Transfer Pricing Documentation (Local File) for 2024 and keep in mind the upcoming deadlines relating to the TPR form and the Group Transfer Pricing Documentation (Master File).…
One of the issues addressed in the explanatory notes of the Ministry of Finance of July 3, 2025, is the status of collective management organizations for copyright or related rights (hereinafter: CMO). The activities of CMOs consist in the protection of the copyrights and related rights entrusted to them, within the framework of which these…
The Ministry of Finance has announced modifications to the regulations concerning Estonian CIT. On September 16, 2025, a draft bill amending the PIT and CIT regulations was presented. It appears that for companies applying Estonian CIT, the chosen direction is primarily to increase the tax burden. However, there are also solutions that may resolve existing…
The Ministry of Finance has published draft amendments to the Family Foundation Act, which are to come into force on January 1, 2026. Key changes concerning family foundations Taxation of the sale of assets within 36 months of acquisitionThe foundation will pay 19% CIT on income from the sale of property donated by the…
The modern world of finance is dominated by liquidity management. Companies, especially those belonging to international capital groups, focus on centralization in order to effectively manage cash surpluses and deficits. Cash pooling, a system that enables cash flow management within a group, is becoming not only a popular but also a key tool in this…
The data presented in the Ministry of Finance’s response to a parliamentary question[1] is a warning sign for entrepreneurs that the correct application of Estonian CIT rules may be more challenging than many of them had anticipated. The information presented shows that the tax authorities’ practice of verifying lump sum settlements is extremely restrictive. In…
Reimbursement of travel expenses for board members is, as a rule, exempt from income tax (PIT) and social security contributions.
As part of our series TP and VAT, where we discuss key issues concerning intra-group transactions (Intra-group settlements under the scrutiny of the CJEU – key issues in transfer pricing and VAT | MDDP), we covered the Arcomet case (C-726/23) and the opinion of the Advocate General of the CJEU (A new perspective from the…
The tax Guidelines published by the Ministry of Finance concerning the application of the so-called beneficial owner clause for withholding tax purposes (hereinafter: Guidelines) are intended to clarify the rules for applying this clause in the context of the withholding tax collection obligation. One of the issues that has raised doubts in the past was…