Эстония : Налоги в Эстонии ( english )

Estonia: Taxes and Costs

Rental Income A flat rate of 23% is imposed on both Estonian tax residents and non-residents. Taxable income includes property and investments such as rental income, interest on deposits and loans, and capital gains on disposal of movable and immovable property. The tax–exempt basic personal allowance for residents is set at EEK24,000 (€1,534). Non-residents do not benefit from this allowance except for residents of EU Member States if certain conditions are met such as sourcing 75% of their income from Estonia and filing a tax return. Land tax An annual land tax is levied from 0.1% – 2.5% of the official valuation. Land taxes are paid by landowners in three installments. Withholding tax Interest paid to non-residents on loans is liable to a 23% withholding tax, unless reduced by tax treaties. Value Added Tax (VAT) The disposal and rental of real estate is tax exempt unless the taxpayer elects it to be taxable. Election is not applicable to residential apartments. Residents are taxed on their worldwide income, while non-residents are taxed on Estonia–derived income only. Tax residency is defined as having a permanent establishment or physical presence in Estonia for at least 183 days in any 12-month period. Capital Gains Tax Private owners pay no capital gains tax on the sale of their permanent residence, or the sale of summer cottages or garden houses owned for at least two years. Profits from the sale of a second home, as well as disposal of real estate rights, are taxed as regular income. The taxpayer is entitled to deduct acquisition cost and documented expenses related to the sale of the property such as interest on loans. Costs of improvements however are not deductible. Corporate Route Corporations are taxed in the same way as individuals (23%). For corporations, however, all expenses are deductible and companies pay no tax unless profits are distributed e.g. in the form of dividends. Upon distribution, corporate profits are taxed at the same 23% rate as ordinary income. This rate will gradually decline to 20% by 2009. If corporate profits were retained in company and used to generate new business, no taxation takes place.