How Do Taxes Work for Estonian Companies?
If you are opening a company in Estonia, you have to understand how basic concepts such as taxes and VAT work, in order to invoice your customers properly.
In addition, you need to differentiate between yourself (as a person) and your company. They are different entities, even if your company is just you.
Your company, founded in Estonia, pays taxes in Estonia (unless special circumstances apply).
In Estonia, company taxes are only paid when there is profit distribution (Eg. money that leaves the company in the form of salary or dividends). Your company does not pay any tax for the money earned or reinvested in the company.
If you are a tax resident in any country, you pay personal taxes in that country for salaries, dividends, or any other income received, from your Estonian company or any other source of income.
If you are not tax resident in any country (Eg. a digital nomad or location independent entrepreneur) you don't pay personal taxes.
You can learn more in this article.
In addition, you need to differentiate between yourself (as a person) and your company. They are different entities, even if your company is just you.
Your company, founded in Estonia, pays taxes in Estonia (unless special circumstances apply).
In Estonia, company taxes are only paid when there is profit distribution (Eg. money that leaves the company in the form of salary or dividends). Your company does not pay any tax for the money earned or reinvested in the company.
If you are a tax resident in any country, you pay personal taxes in that country for salaries, dividends, or any other income received, from your Estonian company or any other source of income.
If you are not tax resident in any country (Eg. a digital nomad or location independent entrepreneur) you don't pay personal taxes.
You can learn more in this article.
Updated on: 29/08/2022
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