There is no corporate income tax on retained and reinvested profits.
Tax on distributed profits is 14-20%.
Distributed profits include:
- corporate profits distributed in the tax period
- gifts, donations and representation expenses
- expenses and payments not related to business
- transfer of the assets of the permanent establishment to its head office or to other companies
Dividends paid to non-residents are no longer subject to withholding tax, irrespective of participation in the share capital of the distributing Estonian company. However, various withholding taxes may still apply to other payments to non-residents if they do not have a permanent establishment in Estonia or unless the tax treaties otherwise provide.
As the tax period for corporate entities is a month, income tax must be returned and paid monthly by the 10th day of the following month.
It is possible to run your company without any corporate income taxation at all.