What you need to know?
While using Estonian company for your business you need to be aware of the consequences of trading with non-cooperative jurisdictions. The payment of service fees and commissions to a company in a non-cooperative jurisdiction will result in withholding tax and corporate tax on certain distributions.
It is also not possible to use the exemption or tax credit method for dividends received from a company located in a non-cooperative jurisdiction.
EU list of non-cooperative jurisdictions for tax purposes
The EU list of non-cooperative jurisdictions for tax purposes is part of the EU’s work to fight tax evasion and avoidance. It is composed of countries which have failed to fulfil their commitments to comply with good tax governance criteria within a specific timeframe, and countries which have refused to do so. Regarding non-cooperative jurisdictions, the EU has drawn up a list that you may consider checking twice a year as the list is renewed biannually: in February and October.
You can find the EU list of non-cooperative jurisdictions here:
If you’ve chosen an Estonian company as your business vehicle, make sure your accountant checks the list twice a year to inspect if any of your trading partners is in the EU list of non-cooperative jurisdictions. If so, it is important to make sure to withhold and declare taxes properly. Doing it right – this can save you from a tax risk and losing your hard-earned money!
We’ve acquired and developed in-depth knowledge and experience over many years through assisting hundreds of resident and non-resident clients with their accounting and tax planning needs. We’re experts at knowing how to make Estonia work best for you to meet your company’s specific needs and requirements.
If you need any support with your tax declarations and international tax advice, the InCorpora team is ready to help.
Get in touch with our team of specialists today.
