The new 2% tax in Estonia even for not distributed profits (No more 0%?)
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Until the last Estonian, for Ukraine thu&¤#
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@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
Close your Estonia company folks.
They claim it is a temporary tax until 2028...lol. Spain said something similar when it introduced wealth tax as a temporary measure and it still exists today under different name. You didn't mention also that companies will be forced to make an advance tax payment also. I am so glad I closed my Estonia company. An Estonia company seems to now be a bureaucratic nightmare to run and will no doubt drive up running costs.
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Advance tax payments
Companies will be required to make an advance defense tax payment to the Tax and Customs Board's bank account by the 10th day of the third month of each quarter. It is calculated as follows:- on one-fourth of the pre-tax profit earned in the previous financial year, if the deadline for making the advance tax payment is after 1 July;
- on one-fourth of the pre-tax profit earned in the financial year before the previous one if the deadline for making the advance tax payment is before 1 July, unless the annual report for the previous financial year has been submitted;
- on one-fourth of the pre-tax profit earned in the previous financial year if the deadline for making the advance tax payment is before 1 July and the annual report for the previous financial year has been submitted.
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I have added link below to GT so people can read the full details and how it will all work...
https://www.grantthornton.ee/en/ins...-profits-preparations-should-begin-this-year/
P.S If Estonia is not defending your resident country then why would you want to pay so called "defense taxes" to them? Seems a waste. I'm gonna bin my Estonia e-residency card or cancel it as Estonia is done for me.
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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.
Latvian banks: gone
Estonian companies: gone
Lithuanian EMIs: gone
RIP so called Baltic countries (or what was left of them)
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Estonian companies: gone
Lithuanian EMIs: gone
RIP so called Baltic countries (or what was left of them)
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@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
If someone is thinking about relocating or opening up a company in Estonia you guys have to visit first and see how depressive and ultra-expensive everything has become. New taxes are being introduced from 2025 and onwards, all are ridiculous. The government budget is in huge deficit - starting from 2025 they'll rape the hell out of normies.
All Estonians are living in Marbella now.
All Estonians are living in Marbella now.
Yes they increased VAT from 22 to 24%. Then corporate tax from 20 to 22%. Personal income tax from 20 to 22%. Now introduce this 2% defense tax on undistributed corporate profit. Not to mention the bureaucracy of doing VAT returns and paying tax multiple times a year. And they say its all temporary measures....lol. Did I forget e-invoice are coming also? I think it is gonna get a lot worse as Estonia has a tiny population and they are trying to squeeze the population financially across the board. Keep in mind e-residency card holders will likely be squeezed also I can imagine with costs going up for renewals etc.
I can understand why things become expensive when the full extent of the tax rises get passed on the the population. It's not like Estonia is a rich country either.
https://www.stat.ee/en/find-statist...osts/average-monthly-gross-wages-and-salaries
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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.
Fees are already increasing starting from 2025.
I will test the mighty power of Estonia to enforce taxes from e-residents rof/%
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@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
AFAIK those taxes impact natural persons and companies to the extent that their income is taxable in Estonia so Estonia can still be used as holding location (if you don't plan to sell your company)
Are foreign investments in Estonia experiencing an ice age?
https://news.err.ee/1609552576/are-foreign-investments-in-estonia-experiencing-an-ice-age--- quote start
Swedish electronics manufacturer Ericsson announced this week that it is abandoning plans for a major investment in Estonia, citing a challenging market and economic environment. "Aktuaalne kaamera. Nädal" investigated whether Estonia has lost its appeal and competitiveness in the eyes of investors.
Both the minister, EIS and the Chamber of Commerce and Industry pointed to the Ukraine war as a key factor negatively influencing foreign investment decisions.
"Russia is our direct neighbor, and we are seen as a frontline state. Understandably, investors are hesitant to make large investments in a frontline state, as worse-case scenarios could result in a complete write-off of their investment," explained Väärtnõu.
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I can see why they need to increase taxes to pay for defence. Geopolitics can be costly when you don't get on with your neighbors. However taxes will have to increase further if things heat up and it could be costly financially and physically.
P.S I think if it also not a good time to become a citizen of Estonia either 🙁
https://kra.ee/en/national-defence-obligation/have-you-recently-become-an-estonian-citizen/
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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.
Of course it's again Russia's fault rof/%
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@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
Economist: Electricity cable failure to affect GDP less than tax rises
https://news.err.ee/1609561385/economist-electricity-cable-failure-to-affect-gdp-less-than-tax-risesSo they admit that the tax hikes are likely to affect Estonia's GDP more than the increase in electricity prices due to repair of the undersea Estlink 2 undersea power cable...yikes eek¤%&
Textbook 101 on how to destroy an economy and impoverish your population authored by Olaf Scholz. Good luck to Estonia and its trajectory.
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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.
That's a decision they made themselves, so no reason to pity them. Gorbachev wanted to start afresh and get along with the rest of Europe, but with cheap Russian resources, Europe would be a direct competition to the US, (financially speaking), so Uncle Sam acted the way he usually does, and here we are. The Baltics, and the rest of Europe would be better off by having good relationships with Russia but when you have a bunch of spineless pussies in the office, there isn't much you can do except to get fucked.
Honestly, I'm not sure if I'm buying that they're increasing taxes because of the eastern boogeyman that is to blame for every problem known to man. Governments are greedy, and most of them will raise their taxes over time, which we've seen with other jurisdictions. They probably saw this as an opportunity you can not go to waste, similar to 9/11, covid etc.
Not much to add to what has already been said. No doubt its a stupid policy.
Estonia certainly loses its main benefit as an offshore jurisdiction.
Dividends from subsidiaries or foreign PE-s are still not going to be taxed though.
Merging or closing company wont really help to save on tax.
However, stripping company from assets/profits would probably be a better choice.
The main benefit of the tax system was and still is anyway to acquire leverage against your undistributed profits to boost capital growth.
On the bright side, the biggest corporate bank is moving Baltic HQ from Lithuania to Estonia now:
https://www.lrt.lt/en/news-in-engli...eadquarters-to-tallinn-in-a-blow-to-lithuania
The END of Estonia as an offshore jurisdiction and the continued melt down of tax loopholes inside Europe.
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The reason to fail while you try to setup your business offshore....the guide that helped me setup my offshore company.
Wiseman sayings - May the gifts of three wise men fill your home with prosperity.
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The reason to fail while you try to setup your business offshore....the guide that helped me setup my offshore company.
Wiseman sayings - May the gifts of three wise men fill your home with prosperity.
The tax is based on profit.
If there is no profit then no tax.
Depends on your activities. Development costs for example are normally not capitalized.
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