18.08.2015 Author:

Establishing a company in Estonia brings different tax benefits to the owners of the companies.

In case the tax benefits are pursued, moving to Estonia must be real. The transfer of the functions and living is applied to by the international general principles of which the residence principle and the source principle are central.

A company established in Estonia can also take advantage of the pricing. Due to a smaller tax, we can consider that the profits are greater in Estonia and the prices of the products that move to Finland can response lower to the tax paid to Finland. The fact that Estonia implemented euro has made it easier to trade between Finland and Estonia.

The minimum capital stock of the private company limited is in Estonia 2 500 euro’s and limited liability company is accordingly tenfold, 25 000 euro’s. Most companies founded by foreigners have started their business in Estonia as a private company limited.

The income tax paid by the company is 20 % in Estonia. The income tax is paid only in case the profit is raised out from the company, for example as a dividend. The amount of value added tax is 20 % (in some cases 9 % or 0 %). For the gross salaries of the employer’s, the employer company has to pay an income tax of 20 % (in 2018 tax exempt income is 500 euro a month) and a 1.6 % unemployment compensation. In addition to the employees’ gross salary, the employer company has to pay a social security tax of 33 % and employer’s unemployment compensation of 0.8 %.

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