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Undistributed Profits Exempt from Income Tax
The biggest advantage of an Estonian registered company is that undistributed profits are tax-free, while distributed profits are taxed at a rate of 20%. In other words, as long as the company's profits are retained in the company's accounts, no taxes need to be paid.
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More Opportunities for Reinvestment
Since you do not need to pay tax on undistributed profits, you can use the excess money to reinvest in the company's development. This will give your company registered in Estonia a significant competitive advantage.
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Rapid Entry into the European Market
As a member of the European Union, Estonia enjoys economic benefits of free movement with EU member states. In addition, Estonia is part of the Single Euro Payments Area (SEPA), and companies established in Estonia can transfer bank accounts to anywhere in the euro area quickly and safely. This ensures that you receive your payments in a timely and full manner, and if there are any issues with your payment, the bank will take responsibility.
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Excellent Business Environment
Various international indices rate Estonia as one of the best business environments globally. For example, in 2019, the World Bank ranked Estonia as the 18th best business environment globally. In 2021, in a research report by the U.S. think tank Foundation, Estonia has ranked among the top OECD countries for the best tax systems for eight consecutive years.
Tax Info
Enter Dynamic Page- General CIT Rate
- Estonia does not tax retained earnings. Distributed profits are taxed at a rate of 20%. A reduced rate of 14% applies to regularly distributed dividends. From 2025, the general rate for distributed profits will increase to 22%.
- CIT Return Due Date
- Corporate income tax is assessed and declared monthly.
- CIT Payment Due Date
- CIT on distributed profits is payable upon distribution.
- CIT Estimated Payment Due Date
- Not applicable as tax is only due on distribution.
- Resident Withholding Tax (Dividend/Interest/Royalty)
- 0/0/0
- Non-Resident Withholding Tax (Dividend/Interest/Royalty)
- 0/0/10
- General VAT Rate
- 24
- General Capital Gain Tax Rate
- Estonia does not have a separate capital gains tax; gains are taxed as regular income at the corporate rate when distributed.
- Composite Effective Average Tax Rate
- 17.0%
- Composite Effective Marginal Tax Rate
- 0.0%
Administrative Regions
- 37 - Harju County
- 39 - Hiiu County
- 44 - Ida-Viru County
- 49 - Jõgeva County
- 51 - Järva County
- 57 - Lääne County
- 59 - Lääne-Viru County
- 65 - Põlva County
- 67 - Pärnu County
- 70 - Rapla County
- 74 - Saare County
- 78 - Tartu County
- 82 - Valga County
- 84 - Viljandi County
- 86 - Võru County
Belonging Jurisdiction
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EE - Estonia
Republic of EstoniaLearn MoreRepublic of Estonia -
EEA - European Economic Area
European Economic AreaLearn MoreEuropean Economic Area -
EU - European Union
European UnionLearn MoreEuropean Union -
WORLD - Global
EarthLearn MoreEarth
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