The country cannot be classified as a classic offshore haven, but it can become an example of a respectable, legally transparent and at the same time tax-free jurisdiction. Estonian legislation provides for 0% rates for estonia company registration that have not distributed profits. The zero level remains if the company does not conduct commercial business in the jurisdiction, does not sell goods or services to tax residents.
After dividends are formed, they are charged 25%. There is also a zero rate for corporate tax. Before the distribution of profits, a company in Estonia may:
- Accumulate funds on accounts in Estonian banks;
- Reinvest without going beyond the zero tax rate regime;
- Take foreign economic loans – only interest will be taxed, not the ‘body’ of the loan.
VAT for non-resident legal entities in Estonia is the standard 20%. They are not paid if the company trades in goods outside the Eurozone, therefore, for entrepreneurs from Russia, the jurisdiction can be especially attractive. For organizations that have hired a resident of Estonia, there is an additional tax – social, 33%. It does not apply to non-resident employees working outside the country. Additional charges (excise, customs, land, transport, etc.) are provided only under certain conditions.