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Estonia: Law of Offshore

Law on Free Zones

Free Zones come under the control of the Estonian Tax & Customs Board. The exemption from excise duties and VAT in Free Zones is legislated by the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (effective April 1, 2003). This Act defines the stipulations for the storage, receipt and despatch of goods in and out of a Free Zone; it also stipulates the criteria for creating Free Zones in Estonia, the creation of "excise warehouses", and the laws governing the import and export of the goods and commodities covered by this law.

The Competition Act 2001 provides for the safeguarding of competition in the interest of free enterprise. The Act covers all those who are involved in business, whether a sole proprietor or a large company and whether or not any restrictive practices are committed within the borders of Estonia, if they affect free enterprise in Estonia. The Act prohibits any form of price fixing or attempts to form a cartel or any other practice that might restrict competition.

Circumstances where liability for VAT is exempt, or where VAT might be refunded, are defined by the Value Added Tax Act 2004, particularly with regard to the import and export of goods into and out of a Free Zone.

The Commercial Code 1995, with subsequent amendments, details the various forms a business or enterprise can take when trading in or with Estonia.



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