Penalties for late PE registration?

[inector]

If you had 2 companies (one in Estonia, one in Singapore) for the past 3 years (both are active, both are managed from Estonia).

Then after 3 years, you decide to register the Singaporean company as a branch/PE in Estonia.

Singaporean company never distributed dividends, but it still paid up less taxes than it would in Estonia (especially with the tax incentive for new companies).

What are the penalties to expect for this 3 year delay?

 

[daniels27]

You pay a lot. First most likely an administrative fine. Then all the taxes plus‌ interest and fines. And worst of all, you won't get the tax you paid credited.‍ Singapore may also deny a tax refund as you should have known the law.

Better close the company and forget it. Or open a new one in 2026.

 

[Xshore]

What taxes are there in EE if the company didn't distribute any⁣ dividends?

Is it sure that the tax office would know/enquire about if the SG company⁢ had a PE in EE previously?

 

[daniels27]

EE taxes once you take out money from the EE company/PE. The‍ tax liability is not only upon distribution of dividends from the parent. It is on⁠ the subsidiary / PE level. And this may very well lead to long and useless⁤ discussions whether the money was taken out of the PE.

It is like crossing a red light with a police︀ car next to you, in most cases, they won't stop your bicycle, but if the︁ guy has a bad day, he just might. The best is not to wake sleeping︂ dogs. And this will also be the advice you will be getting from pretty much︃ any lawyer. Hence better close the SG company and not report anything. If you need︄ one, you open another one some years later. If you really have to report the︅ PE, you better hire some guys in SG for a year and then fire them.︆ You then have evidence that there was no PE before and you only report now︇ because things changed.