[alde]

Please read up on what a permanent establishment means from a tax perspective. Most countries tax laws, especially EUs unambiguously state that the Estonian company will be taxed as if it was a company in your primary residence country.

The e-residence website repeats this many times, with many examples focusing on Germany.

https://learn.e-resident.gov.ee/hc/en-gb/articles/3600025428...

The whole e-residence thing only makes sense if you are from a non-EU country which doesn’t model its tax code on the OECD model.

People do get away with it until they get audited.

[mhitza]

There are a handful of countries listed there but you expand the criteria to all EU countries, which is not the case.

I don't have the issues you're talking about, I pay corporate taxes in Estonia, and I pay income taxes in Romania.

I thought Germany was a well-known country that is incopatible with this model (curious how things will change with EU Inc), but asking an accountant in your home country of tax laws and double taxation treaties will be better than random internet people.

[alde]

I hate to say it, but you don't have any issues mainly because the romanian tax office is just more relaxed than the german one.

> A company is considered tax resident in Romania if it has its ‘place of effective management’ (POEM) in Romania.

All EU countries have the same laws in this regard, as it is a precondition for joining the EU.

[mhitza]

> but you don't have any issues mainly because the romanian tax office is just more relaxed than the german one.

I'd argue because I'm not a resident of those 2 EU countries out of 27. Hence my previous comment.

You can't take only place of effective management in account because double taxation treaties also kick in.

[romanovcode]

> non-EU country which doesn’t model its tax code on the OECD model.

It's a very narrow list of countries then. Only reason where it would really work if the owner is digital nomad with no tax residency anywhere.

[alde]

Yes, the specific details are outlined in the bilateral tax treaties between Estonia and the given country, but it is almost always tax evasion.

It mostly makes sense for people from countries with weak corporate tax enforcement that need a limited liability entity in a reputable jurisdiction like Estonia.