The CIT Act and the PIT Act contain a list of intangible services, the income from which, as a rule, is subject to a 20% flat-rate income tax (withholding tax / WHT). These services include: consulting, accounting, market research, legal, advertising, management and control, data processing, employee recruitment and personnel acquisition, guarantees and sureties, and…
Entities that pay dividends to their parent companies have been struggling for years with documentation challenges when attempting to confirm their right to apply for withholding tax exemption. In Explanations concerning the beneficial owner clause published on July 3, the Minister of Finance proposed a solution that can be described as a “safe harbour.” It…
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.…
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…
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…
Since 2021, it has been possible to conduct business activity in the form of a simple joint-stock company (PSA). The PSA was intended to address the challenges of the modern economy – no barriers to entry, simplified profit distribution and faster liquidation, in short – the ideal legal form for start-ups. However, entrepreneurs still approach…