[davidverhasselt]

> In addition, if you've taken out profits before, then the company income tax is 14%, up to the amount that equals the average of the last 3 years. So if you take out similar profits on a regular basis, the tax rate is only 14% on everything.

As I understood it, this is only so for distributing profits to legal entities. If you're distributing to a private person, the private person will have to pay a new 7% income tax which sums up to a total of about 20%. This of course only matters if the private person is tax resident in Estonia.

I find the PwC tax alerts very informative to be kept up to date on the tax laws in Estonia: https://www.pwc.com/ee/en/press-room/tax-alerts/estonian-tax...

[Strom]

You're very much correct, thanks for pointing that out!

I hadn't seen any mention of the new 7% individual rate in any newspaper articles or even accounting firm articles. I now inspected the actual income tax law [1], and sure enough the 7% clause is there.

One one hand this means a slight net tax increase to 20.02% [2], on the other hand if the total individual income is less than 25200€/year then a part of that 7% will be returned.

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[1] Unfortunately not yet translated to English https://www.riigiteataja.ee/akt/107072017022

[2] 100 * 0.86 * 0.93 = 79.98

[davidverhasselt]

Indeed, I too had difficulty finding exact information on this new change. I then stumbled upon the PwC tax alerts where it was very transparently explained. Personally I wouldn't mind if they would take a bit longer to implement changes like this, so everyone can be accurately informed and optimise in time.