Annual financial statements
Every year, within 6 months after the end of the financial year, an entrepreneur must submit a report on economic activity to the Register of Entrepreneurship. For example, if the financial year of an enterprise is from 01.01 to 31.12, then the deadline for submitting the report is 30.06. The fiscal year does not have to match the calendar.
According to the Law on Accounting (Raamatupidamise seadus), all companies can choose, either prepare their financial statements in accordance with the requirements of the International Financial Reporting Standards adopted by the European Commission, or according to the Good Accounting Practice of Estonia (i.e., in accordance with the Law on Accounting and the Instructions of the Accounting Service – Raamatupidamise Toimkonna juhendid).
If an Estonian company has more than 50% interest in another company, then it shall prepare consolidated financial statements.
Liquidation statements
The liquidation procedure of a company may include up to 3 types of reports.
The liquidation report is a report for the financial year of a company, from the beginning of the liquidation process to the termination of its economic activity.
The interim liquidation report is a report drawn up after the decision on liquidation is made if the liquidation process is not completed and the period from the day the process began exceeds 12 months.
The final report is a report drawn up at the end of liquidation process.
Liability to report the goods and pay taxes
By the 10th day of the month following the reporting period, a TSD declaration on income and social taxes, mandatory funded pension payments and unemployment insurance shall be submitted.
By the 10th day of the month following the reporting period, there are obligations to pay income, social tax, payments for mandatory funded pension and unemployment insurance.
By the 20th day of the month following the reporting period, a KMD declaration on the turnover tax shall be submitted.
By the 20th day of the month following the reporting period, INF annexes to the KMD declaration on the turnover tax shall be submitted, indicating the names of all those from whom goods/services were purchased and to whom goods/services were sold for more than 1000 euros (excluding turnover tax).
By the 20th day of the month following the reporting period, a report on intra-union turnover shall be submitted (VD form).
Current tax rates
Payroll taxes
Income withholding tax – 20%
Social tax – 33%
Entrepreneur insurance against unemployment from wages – 0.8%
Unemployment insurance withheld from employee wages – 1.6%
Pension insurance (voluntary) – 2.0%
Minimum not liable to income tax: If an annual employee income does not exceed 14 400 euro (including all income gained by the employee in the particular calendar year), then he can easily apply non-taxable income of EUR 500 per month, then the amount of non-taxable income will decrease.
Turnover taxes
The turnover tax rate in the Republic of Estonia is 20%, with the exception of cases specified in Section 15 of the Turnover Tax Law (KMS).
The tax on the turnover of books, medical drugs and accommodation services is 9%
The tax on export and internal trade turnover is 0%
Tax-free turnover (Art. 16 KMS) – universal postal service, medical services, dental services, insurance and other services.
Dividends
Dividends in Estonia are subject to 25% corporate income tax at the rate of 20/80 of the net amount.
Income tax
In Estonia there is no tax on profit received but retained.
NB! The list of taxes on this page contains the most important applicable taxes and is not final. Additional information on taxes can be found on the website of the Estonian Tax and Customs Board www.emta.ee/et?lang=en, as well as in the database of the State Gazette Riigiteataja www.riigiteataja.ee/en/.
The Estonian Statistics Department annually samples companies and imposes various reports to be filled out, depending on the field of activity of the company. There are various kinds of reports, however most often the Department does not impose more than 5 reports to one company. Data shall be submitted both electronically and on paper with a frequency of once a month, quarter or year.
A report to the Central Bank of Estonia is quarterly submitted. The report is submitted only by companies selected by the Central Bank that have foreign economic activity.