As to which taxes have to be paid at which rate, this depends on the specific characteristics of your company. Here is the of all tax types:
In most cases, Estonia only taxes income, to be exact distributed profits at a 20% tax rate.
- Income tax
- Value-added tax
- Social tax
- Customs tax and excise duties
- Unemployment insurance premium
- Environmental charges
- Taxes payable in the case of cross-border operations
This means that if a business in Estonia earns $100 and pays that $100 to its shareholders, the business would be required to pay a tax of $20 on the distributed profit. Instead, if that business decides to reinvest that $100, the business would not have to pay tax on that $100.
Now, this does not mean that the income goes untaxed. Instead, the profit is potentially taxed as at Estonia's 21 percent capital gains rate. If the business reinvests its $100 profit, it is probable that the value of the business would increase and, with it, the value of a shareholders shares. If a shareholder were then to sell their shares, they would face the 21 percent capital gains tax rate. In some other cases, a reduced rate of 14/86 may apply.