Regime Rate
0%
Under the Estonian Corporate M
Standard Top Rate
20%
without this regime
Duration
Unlimited
No expiry — permanent regime
Target Profile
Profit Deferral
Estonia
Tax Savings Illustration
Example: €150,000 Annual Gross Income
Under Estonian Corporate M
N/A
Standard Rate
20%
Annual Saving
—
Eligibility Requirements
Who qualifies?
- All companies registered in Estonia
How the Regime Works
Full details
Corporate income tax of 20% applies ONLY on distributed profits. Retained and reinvested earnings are tax-deferred indefinitely. Reduced 14% rate on regular dividends (with 7% withholding for individuals).
Regime vs Standard Rates in Estonia
| Tax Type | Standard Rate | Under This Regime | Saving |
|---|---|---|---|
| Income Tax (top rate) | 20% | 0% | -20.0pp |
Frequently Asked Questions
What is the Estonian Corporate Model in Estonia?
The Deferred Distribution Tax — 0% on Retained Profits is a special tax regime in Estonia that provides 0% flat rate to qualifying individuals or entities. Corporate income tax of 20% applies ONLY on distributed profits. Retained and reinvested earnings are tax-deferred indefinitely. Reduced 14% rate on regular dividends (with 7% withholding for individuals). Legal basis: Income Tax Act §50.
Who is eligible for the Estonian Corporate Model?
Eligibility for the Estonian Corporate Model is limited to: All companies registered in Estonia. Applicants typically must not have been Estonia tax residents during a specified prior period. Always verify current conditions at the source: Income Tax Act §50.
How much tax do you pay under the Estonian Corporate Model?
Under the Estonian Corporate Model, you pay 0% personal income tax — compared to the standard Estonia top rate of 20%. This is a complete exemption for qualifying residents.
How long does the Estonian Corporate Model last?
The Estonian Corporate Model is a permanent regime with no set expiry — it applies for as long as you continue to meet the eligibility criteria.
How do I apply for the Estonian Corporate Model?
Application procedures for the Estonian Corporate Model are set out in Income Tax Act §50. You typically need to file a formal application with Estonia's tax authority after establishing residency. Consult a local tax advisor for guidance.
Other Special Regimes to Compare
Disclaimer: This information is for general guidance only and does not constitute tax advice. Tax laws change frequently. Always consult a qualified tax professional before making residency or tax planning decisions.