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Double Taxation Treaties in Estonia

Double Taxation Treaties in Estonia

The usual withholding tax on the distributed profits in Estonia is 21% and 0% for undistributed profits. The foreign shareholders in their attempts to avoid the double taxation of their profits and incomes in Estonia and in the country of origin can use the provisions of these treaties signed by Estonia over the years.

These treaties are stipulating that the incomes or the profits are not taxable in Estonia or if are taxable, a refund can be granted in order to cover their values.

Other exemptions are granted for the withholding taxes on interests and royalties. Usually the value of these rates is 21% and 10%.

In order to use the regulations of the treaties a certificate of residency has to be deposited at the custom center of the Estonian Tax and Customs Board along with the tax return. The necessary documents are available on the Estonian tax and Customs Board. These certificates can be used three years by corporate bodies and one year by natural persons. After this period, the certificates become invalid.

If the retained taxes are higher than what the treaties are stipulating, the entity may request for a refund but no later than three years after discovering the mistake. The application submitted at the Estonian Tax and Customs Board must contain besides other dates such as the amount that has to be refunded, the name of the bank and the account where the refund must be deposited.

Examples of double tax treaty countries

Estonia has signed double tax treaties with the following states and jurisdictions: Albania, Armenia, Azerbaijan, Austria, Belarus, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Isle of Mann, Israel, Italy, Kazakhstan, Korea, Latvia, Lithuania, Luxembourg, Macedonia, Moldova, Malta, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom and the United States.

The withholding taxes on interests and royalties with the Isle of Mann and Georgia are 0%. 

These double taxation treatiessigned by Estonia are also helping the signatory states to avoid the tax frauds by posting clauses of tax exchange information. These provisions are stating the conditions and the way the tax information can be requested by entities.

Additional services

We can also give you details about the implications of the doble tax treaties with relation to Estonian residency and deriving income from an Estonian source, as well as sources from other countries. For residency purposes, we can give you information about the available temporary residence permits, the application fees and process, as well as the renewal conditions. 

The double tax treaties are signed in order to attract the foreign investments in Estonia and in the partner countries.

For more information please contact our lawyers in Estonia.

Our local team of experts can also answer questions about personal taxation based on the existing double tax treaties signed by Estonia with other countries. We can also answer questions about obtaining residence permits, the right of residence, permanent stays in the country and acquiring Estonian citizenship based on the minimum number of years spent in the country on a permanent basis.

Those interested in immigration to Estonia can send us their inquiries once the minimum period of five consecutive years has passed. EU and EEA citizens will apply for the right of permanent residence after this period, while foreign nationals of other countries will apply for a ling0term residence permit. Our team will give you details about the needed documents and the application process.