LOWTAX.NET
CONTACT | ABOUT | LEGAL | LINKS     
   NETWORK SITES:
   LOWTAX   
   TAX-NEWS   

Jurisdiction Home Pages

Andorra
Anguilla
Aruba
Australia
Austria
Bahamas
Barbados
Belgium
Belize
Bermuda
Botswana
British Virgin Islands
Brunei
Bulgaria
Canada
Cayman Islands
Cook Islands
Costa Rica
Cyprus
Czech Rep
Denmark
Dubai
Estonia
France
Germany
Gibraltar
Greece
Grenada
Guernsey
Hong Kong
Hungary
Ireland
Isle of Man
Jersey
Labuan
Latvia
Liberia

Liechtenstein
Lithuania
Luxembourg
Madeira
Malaysia
Malta
Marshall Islands
Mauritius
Monaco
The Netherlands
The Netherlands Antilles
Nevis
New Zealand
Panama
Poland
Portugal
Romania
Russia
Seychelles
Singapore
Slovakia
Slovenia
South Africa
Spain
St. Kitts
St. Vincent and the Grenadines
Switzerland
Turks & Caicos Islands
USA
UK
Vanuatu

Newsletter

To receive monthly updates on new features in lowtax.net and tax-news.com just enter your e-mail address below:

Daily Tax Quote

The Network

3,000 free pages of accurate, timely information

Tax-News.com


Daily, updated news about tax and offshore from our team of 20 international journalists

Lowtax.net

'Low-tax' business and investment in the top 50 jurisdictions covered in exceptional detail

Investors offshore.com


Global information and advice for expatriates and international investors

Offshore-e-com.com

A topical guide to offshore e-commerce focused on tax and regulation

LawAndTax-News.com


Daily news and background data on tax and legal developments for international business

>
LOWTAX OFFSHORE

MALTA INFORMATION: BUSINESS, TAXATION AND OFFSHORE



You can find summarised information on this page, or use these links to access our more detailed knowledgebase:


Geography, Climate, Population and Culture

Estonia attained independence in 1918. Forcibly incorporated into the USSR in 1940 it regained its freedom in 1991, with the collapse of the Soviet Union. It joined both NATO and the EU in the spring of 2004. Estonia has a land area of 43,211 sq km, situated in Eastern Europe, bordering the Baltic Sea and Gulf of Finland, between Latvia and Russia. Estonia continues to press for realignment of the boundary based on the 1920 Tartu Peace Treaty that would bring the now divided ethnic Setu people and parts of the Narva region within Estonia. The mainland is mostly flat and partly wooded; offshore lie more than 1,500 islands; it’s natural resources include oil shale, peat, phosphorite, clay, limestone, sand, dolomite, arable land and sea mud (medical). The climate is maritime, wet, moderate winters, cool summers. The population was estimated at about 1.3 million in 2007, ethnically Estonian only Estonian 68%, Russian 26%.

[Further Information]


Government and Legal Structure

The capital of the republic is Tallinn, there are 15 counties. The President is the head of state; he is elected by Parliament, for a five year term. The head of government is the Prime Minister, appointed by the president on the approval of the Parliament; The Council of Ministers is appointed by the prime minister, approved by Parliament. The Parliament (101 seats; members are elected by popular vote to serve four-year terms. The legal system is based on the civil law system; Estonia accepts compulsory ICJ jurisdiction with reservations.

[Further Information]


 

The Economy

Estonia has a modern market-based economy. The current government has pursued relatively sound fiscal policies, resulting in balanced budgets and low public debt. In 2007, however, a large current account deficit and rising inflation, at 6.3%, put pressure on Estonia's currency. This has delayed Estonia adopting the Euro till between 2011 and 2013, later than planned. In 2007, GDP grew an estimated 7.3%, GDP per capita, $21,800 (2007 est.) one of the highest levels in Central Europe. GDP comprises agriculture: 3%, industry: 29%, services: 68% (2007 est.). The 668 thousand workforce (2007 est.) had a 5.2% unemployment rate.

[Further Information]


Company Forms

These are the Public or Private limited liability company, Limited partnership, Unlimited partnership, Branch and Individual trader. Entrepreneurs can submit data to the Commercial Register via the new E-filing portal run by the state governed Centre of Registers and Infosystems. One person is sufficient to set up a Private Limited Company (OU). A minimum registered share capital is EEK 40.000 (about EUR 2.550), with a minimum nominal value of EEK 100 per share. A Public Limited Company (AS) has a minimum registered share capital of EEK 400.000 (about EUR 25,500), with a minimal value of EEK 10 per share.

[Further Information]


Tax System

Distributed profits are generally subject to 21% corporate income tax. The tax rates are reduced to 20% in 2009, to 19% in 2010 and to 18% in 2011. All undistributed corporate profits are tax exempt. This distribution tax is not affected by double tax treaties, any required withholding tax is in addition to this. Estonia has a transitional period ending on 31 December 2008 to amend its present taxation system. The standard VAT rate is 18% and is applied to all supplies of goods and services, including imports. A reduced rate of 5% is applicable to certain categories such as books, hotel accommodation, listed pharmaceuticals and the treatment of dangerous waste. Operations exempt with credit include the export of goods. VAT exemption without the right of deduction applies to a range of activities including: financial services, insurance; most sales of real estate and health services. Excise duty is levied on certain goods including tobacco, alcohol, electricity and motor fuel. Employers operating in Estonia must pay social tax on salaries at the rate of 33%.

[Further Information]


Lowtax Opportunities

[There are no special tax incentives in Estonia.] The whole Estonian corporate tax system which provides for an indefinite deferral for taxing corporate profits is an incentive that promotes re-investment of profits and thus stimulates economic growth.

[Further Information]


Holding Companies

There is no form of consolidation or group taxation for corporate income tax purposes. Transactions between related parties (both resident and non-resident) and between a head office and its permanent establishment(s) should be conducted on arm’s length terms.

[Further Information]


Tax Treaties

Dividends paid to non-resident legal entities, which own less than 15% shareholding in the distributing company, are subject to 21% withholding tax, but reduced rates may be available under double tax treaties. Dividends paid to “tax haven” entities are always subject to 21% withholding tax. There is no withholding tax on interest payments to non-residents provided that the interest charged does not significantly exceed the arm’s length rate. Royalties and rental payments to resident individuals are subject to 21% withholding tax. Royalties paid to non-residents are generally subject to 15% withholding tax, but reduced rates may be available under double tax treaties. Certain royalty payments to associated EU and Swiss companies that meet certain conditions are exempt from withholding tax. Payments to non-resident companies for services provided in Estonia are subject to 15% withholding tax, but exemption may be available under double tax treaties. Service fee payments to “tax haven” entities are always subject to 21% withholding tax.

[Further Information]


Internet and Telecommunications

Foreign investment has greatly improved the telephone service; substantial fibre-optic cable systems carry telephone, TV, and radio traffic in the digital mode; Internet services are widely available; schools and libraries are connected to the internet, There were an estimated 1.659 million (2006) mobile phones. There were 387 thousand internet hosts (2007) and 760 thousand users (2006).

[Further Information]


Banking System

The Bank of Estonia is the central bank. The bank issues the Estonian currency, the kroon. Estonia maintains a fixed rate of exchange at EUR1=EEK15.64664; there are no restrictions on transactions. The currency board arrangement is a special kind of fixed exchange-rate system where the upper limit of base money issuance depends on the amount of the central bank's foreign reserves. This ensures an automatic cover for the kroon.

[Further Information]

User Comments | Views | Q & A | View All Comments




NO REGISTRATION REQUIRED

<
BACK TO OFFSHORE JURISDICTIONS COUNTRY MENU

THE LOWTAX LIBRARY

One of the web's largest and most authoritative business and investment information sources. Alongside topical, daily news on worldwide tax developments, you can receive weekly newswires or access up-to-date intelligence reports on a range of legal, tax and investment subjects.

FREE TRIAL NEWS SUBSCRIPTION

Our 16 constantly updated intelligence reports cover every important aspect of 'offshore' and international tax-planning in depth, including banking secrecy, the EU's savings tax directive, offshore funds, e-commerce, offshore gaming and transfer pricing. Reports are available for immediate downloading or as subscription services with news pages.

Advertising & Marketing

With over 50,000 qualified readers every month our web-sites offer a number of cost effective, targeted advertising, sponsorship and marketing opportunities:

Display advertising - from 'skyscrapers' to 'buttons'
Content/article submission and sponsorship
Opt-in email marketing
On-line Services Directory listings

Click here to learn more or contact Peter Wiggins on +44 1424 425933 or email him at peter@lowtax.net

News & Content Solutions

Could your corporate web-site or newsletter benefit from incorporating regularly updated news and content tailored to serve your clients' interests? We can provide a variety of maintenance-free news and content solutions that can be seamlessly integrated and dynamically delivered:

Customised, personalised 'own-brand' news services
Newsletter content and management
News Headlines Tickers

Click here to learn more or contact Peter Wiggins on +44 1424 425933 or email him at peter@lowtax.net

IMPORTANT NOTICE: THE LOWTAX NETWORK has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments. All materials on this site copyright THE LOWTAX NETWORK 1999 to 2009. Contact us for further information.