Estonian CIT

Estonian CIT

The name refers to the corporate taxation model in place in Estonia. It is a solution that allows companies to defer CIT payments until profits are distributed to shareholders. Estonian CIT is addressed mainly to growing technology businesses, focusing mainly on creating significant value or scaling through reinvesting of the income rather than sharing the

The deferral of CIT payments is only one of the benefits of Estonian CIT. Other advantages include:

• a lower effective tax rate on profit distribution to shareholders. Estonian CIT allows for effective rate of 20% (small taxpayers) and 25% (other taxpayers). In the case of standard CIT, the effective rate is 26.29% and 34.39%, respectively.
• a simplified reporting process. As in companies applying Estonian CIT, all documents are based on accounting principles alone. There is no need to keep separate tax accounts or calculate tax costs or depreciation.