A fundamental requirement for Estonian CIT is that the majority of revenue must be derived from operating activities. In practice, this means that less than half of the company’s total gross revenue may come from so-called passive sources. In the list compiled by the legislator, the following items are included: income from the disposal and…
Organised part of an enterprise Tax regulations define an organised part of an enterprise [hereinafter: OPE] as a set of assets – tangible and intangible, including liabilities – organisationally and financially separated within an existing enterprise, intended to perform specific business tasks, which could also constitute an independent enterprise performing these tasks on its own.…
The tax authorities have changed their position on the so-called repeated non-monetary services provided by partners in limited liability companies with Estonian CIT, based on Article 176 of the Commercial Companies Code. Repeated benefits result from the shareholders’ obligation, specified in the articles of association, to perform activities of a remunerated and repetitive nature for…
Lump-sum tax on corporate income [Estonian CIT], as a very attractive form of taxation for individuals, is steadily gaining popularity. This is evidenced by the fact that the number of taxpayers subject to Estonian CIT is increasing every year. One interesting aspect of Estonian CIT concerns dividends in kind. When is tax payable under Estonian…
Does a gratuitous guarantee granted to a taxpayer subject to Estonian CIT by a related entity give rise to a transfer pricing documentation obligation? According to DKIS [1] – yes – if the value of the guarantee exceeds the threshold of PLN 10 million, the taxpayer will be required to prepare transfer pricing documentation. …
Family foundations have been part of the Polish legal system for over two years and have naturally become a popular tool for succession planning. As they gain traction, questions have arisen regarding the permissibility of accumulating and disposing of digital assets by family foundations, especially in light of their tax-advantaged status. In its tax ruling…
Does a free of charge surety granted to a taxpayer subject to Estonian CIT give rise to a tax obligation to recognise income as hidden profits or revenue from free of charge benefits? The conclusions of the latest individual tax ruling[1] indicate that it does not. Hidden profit or income from a free of…
Can the payment of remuneration for the redemption of shares, financed from profits earned before the implementation of Estonian CIT, result in lump-sum taxation of company income? Although it may appear that profits once subject to taxation should not be subject to further taxation, tax authorities’ practices demonstrate otherwise. For the tax authority, it…
Recently issued individual interpretations indicate that tax authorities have inconsistent positions on the classification of lease or rental costs from related entities as so-called hidden profits. While the regulations remain consistent, the authorities’ positions are subject to variation depending on the specifics of each case. The following three approaches demonstrate the various perspectives of the…
The real estate tax regulations in force from 2025 have affected the industrial sector. In this and a series of subsequent articles, we will highlight the issues most frequently identified by MDDP experts as affecting industry. Are industrial installations considered buildings? The change in the definition of a structure and a building means that…