Estonian CIT – current legal status 2023
1 April 2023
1 April 2023
Estonian CIT is referred in the law as a lump sum on income of capital companies. It is a modern way of taxation that promotes investments and minimizes formalities when settling taxes for capital companies and partnerships.
This solution is addressed to:
All of the above criteria must be met simultaneously.
Estonian CIT is due when the Company distributes its profit. In principle, therefore, no CIT is payable by the company accounting for CIT under Estonian CIT until profit is distributed. The CIT rate for Estonian CIT is 10% for small taxpayers and 20% for all others.
However, the shareholder has the right to apply a deduction for the received dividend. The shareholder can reduce the tax paid on that dividend by the corresponding portion of the tax paid by the company.
This results in the partner’s final tax bill amounting to:
A company subject to Estonian CIT is also not obliged to pay the minimum tax (statutory exemption).
A company subject to Estonian CIT, that does not exceed the sales value of PLN 2,000,000.00 (including VAT) for the preceding tax year is eligible for a quarterly settlement of VAT.
However, when opting for an Estonian CIT settlement, it should be borne in mind that, in addition to the profit distribution indicated above, CIT tax liability will also arise in connection with:
Hidden profits are understood as benefits to shareholders, partners and their related parties, including e.g. a loan granted to such a shareholder. The choice of this solution entails its obligatory application for a period of four years, with the possibility of an extension for a further four years.
If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.