What are deductible expenses?
Deductible expenses are those that can be assigned to the company, that is, paid by the company and deducted as a business expense. Thanks to the innovative Estonian tax system, these expenses are exempt from taxes. They are considered money that you are reinvesting in the company.
Basically, it is any expense related to your activity that does not imply that you have a permanent establishment in another country, to avoid considering your company a tax resident there. Let's see some examples:
The expenses of your servers and web: hosting, domains, and any other web service that your business needs.
Administrative tools and software online or offline for management, accounting, etc.
Web tools, subscriptions, and software that you need to develop your activity.
Telecommunication costs communication costs are deductible as long as they are not "land lines" or suppose a "permanent establishment" (includes office lines outside of Estonia). You can deduct cell phone and internet for mobile devices only.
Fungible office supplies.
Travel or public transportation for work, including flights, car rentals, services like Uber or Taxify, and accommodations like Airbnb. This includes trips to Estonia (if you need it to open your bank account, for example).
The fees of the payment gateways, such as the payment gateways of your online store or similar services.
In exceptional cases, a business lunch may be deductible, but it will require you to hire a catering service and get an invoice for your company from them. This is for a special event that may be justified for business reasons, not just because you want to have a Chai Latte at your favorite café. Remember, these expenses, even with the invoice, will be declared as "Costs of entertaining guests" or even "non-business expenses", and subject to tax liability (meaning, you will have to pay taxes for them). So it is indeed cheaper for you to pay for your latte with your money. Please note, Companio does not support personal expenses such as meals, drinks, food, or clothing.
Basically, it is any expense related to your activity that does not imply that you have a permanent establishment in another country, to avoid considering your company a tax resident there. Let's see some examples:
The expenses of your servers and web: hosting, domains, and any other web service that your business needs.
Administrative tools and software online or offline for management, accounting, etc.
Web tools, subscriptions, and software that you need to develop your activity.
Telecommunication costs communication costs are deductible as long as they are not "land lines" or suppose a "permanent establishment" (includes office lines outside of Estonia). You can deduct cell phone and internet for mobile devices only.
Fungible office supplies.
Travel or public transportation for work, including flights, car rentals, services like Uber or Taxify, and accommodations like Airbnb. This includes trips to Estonia (if you need it to open your bank account, for example).
The fees of the payment gateways, such as the payment gateways of your online store or similar services.
In exceptional cases, a business lunch may be deductible, but it will require you to hire a catering service and get an invoice for your company from them. This is for a special event that may be justified for business reasons, not just because you want to have a Chai Latte at your favorite café. Remember, these expenses, even with the invoice, will be declared as "Costs of entertaining guests" or even "non-business expenses", and subject to tax liability (meaning, you will have to pay taxes for them). So it is indeed cheaper for you to pay for your latte with your money. Please note, Companio does not support personal expenses such as meals, drinks, food, or clothing.
Updated on: 20/09/2024
Thank you!