Estonian e-residency and taxes - key points

Though we at Expat Legal Estonia are not tax consultants and when it comes to tax then it seems almost impossible to give 100% waterproof answers, there are basic rules and concepts that should get most of you through your tax challenges.

Generally speaking you should firstly differentiate between personal tax residence and corporate tax residence.

Corporate tax residence will be in Estonia as a country where your company is registered (in most cases). This means you can take advantage of the fact that there is no corporate tax on income in Estonia. No tax has to be paid as long as the money stays in the company/is re-invested. Income tax of 20% applies if profits are distributed to the shareholders.

Personal income tax is far more complex and it always requires looking at the rules of your home country and tax treaties in place between Estonia and your home country/country of tax residence. In most cases these treaties make sure you are not taxed twice in both countries.

While it is possible to keep moving around and avoid being a tax resident anywhere (do let us know if you are pulling this off), most still have a home country and as a rule of thumb, you should keep your local taxman happy. Please also bear in mind that tax residency is determined differently in different countries (most seem to apply the rule that you should live somewhere for at least 183 days in a consecutive 1 month period).

Your personal tax is then paid on your income when your company pays your wage and it is subject to the rules in the country of your personal tax residency. This means that it is best to consult with your local tax authority/tax consultant. On the Estonian side you can email the Estonian Tax Authority at nonresident@emta.ee - they are usually very helpful!