Estonia Tax & Accounting — Deferred CIT, VAT 24% & Monthly e-Filing
CIT 22% on profit distribution only (22/78 mechanics), 0% on retained earnings. VAT 24% (since 1 July 2025). Monthly TSD (income and social tax) and KMD (VAT) e-declarations via the e-tax portal — we run them for you.
What Tax & Accounting includes in Estonia
What you receive
How it works
Helpful resources
Where to register and how we differ
Tax & Accounting in Estonia — frequently asked questions
Corporate income tax (CIT) of 22% arises only when profit is distributed as dividends (since 1 January 2025, 22/78 mechanics). Profit retained in the company — reinvested, held as cash, or spent on capex — isn't taxed at all. The deferral is unique in the EU: capital compounds tax-free for as long as you like. On distribution, out of 100 EUR the shareholder gets 78 and EMTA 22; the effective rate on net distributed profit is ≈28.2%.
VAT registration is mandatory the moment cumulative taxable turnover in Estonia passes €40,000 in a calendar year. The standard rate is 24% (up from 22% on 1 July 2025; before that 22% from 1 January 2024, and 20% earlier). Below the threshold, voluntary registration is possible. EU B2B transactions run on reverse charge. We file the monthly or quarterly VAT returns through the e-Tax/e-Customs portal for you.
Every OÜ keeps double-entry books under Estonian GAAP (aligned with IFRS for SMEs) and files annual accounts with the e-Business Register within 6 months of financial year-end. Turnover above €4 million or assets above €2 million trigger a statutory audit. Payroll taxes (income tax 22%, social tax 33%) are due by the 10th of the following month. We run the accounting end to end.
No — Estonia levies no withholding tax on dividends. When an OÜ pays dividends out of profit that hasn't yet borne CIT, the 22% falls at company level (22/78 mechanics, since 1 January 2025); the reduced 14/86 track and the accompanying 7% on payouts to individuals were abolished on 1 January 2025. From 2025, every distribution is taxed solely at company level at 22/78. For non-EU shareholders, Estonia's network of 60+ tax treaties adds further protection. We cost out the full distribution before building the structure.
Yes. If an Estonian OÜ receives dividends from an EU subsidiary in which it holds at least 10% for 12+ months, those dividends are exempt from Estonian CIT. Symmetrically: dividends from the OÜ to a qualifying EU parent are exempt from withholding tax. Hence Estonia's strong EU holding position — especially for digital and IP structures against the backdrop of deferred CIT.