Estonia Corporate Income Tax

Corporate income tax base and rates

Estonia's corporate income tax is levied only on distributed (and deemed-distributed) profits, not on accrued earnings. Retained and reinvested profits are taxed at 0%, making the timing of distribution the key tax event.

• Tax on retained / reinvested profits — 0% percent (Income Tax Act (Tulumaksuseadus) — https://taxsummaries.pwc.com/estonia/corporate/taxes-on-corporate-income)
• Tax on distributed profits — 22% of the gross amount, levied as 22/78 of the net distribution percent (Income Tax Act (Tulumaksuseadus) — https://taxsummaries.pwc.com/estonia/corporate/taxes-on-corporate-income)
• Distribution tax formula — CIT = net distribution × 22/78 (e.g. 78 EUR dividend → 22 EUR CIT) (Income Tax Act (Tulumaksuseadus) — https://taxsummaries.pwc.com/estonia/corporate/taxes-on-corporate-income)
• Reduced 14% rate on regular dividends — Abolished from 1 January 2025 (previously 14/86 on regularly distributed profits) (Income Tax Act (Tulumaksuseadus) — https://www.ey.com/en_ee/insights/tax/significant-tax-changes-in-estonia-in-2025-2026)
• Tax base — Profit distributions, fringe benefits, gifts/donations, non-business expenses, and other deemed distributions — not annual accounting profit (Income Tax Act (Tulumaksuseadus) — https://taxsummaries.pwc.com/estonia/corporate/income-determination)
• Withholding tax on dividends to non-residents — 0% (no WHT; the 22% CIT is borne at company level on distribution) percent (Income Tax Act (Tulumaksuseadus) — https://taxsummaries.pwc.com/estonia/corporate/withholding-taxes)
• Withholding tax on interest to non-residents — 0% (generally no WHT on ordinary interest payments) percent (Income Tax Act (Tulumaksuseadus) — https://taxsummaries.pwc.com/estonia/corporate/withholding-taxes)
• Withholding tax on royalties to non-residents — 10% under domestic law (often reduced under double tax treaties) percent (Income Tax Act (Tulumaksuseadus) — https://taxsummaries.pwc.com/estonia/corporate/withholding-taxes)
• Withholding tax on certain services performed in Estonia — 10% on payments to non-residents for services rendered in Estonia (treaty relief may apply) percent ((approx — confirm)) (Income Tax Act (Tulumaksuseadus) — https://taxsummaries.pwc.com/estonia/corporate/withholding-taxes)
• CIT return and payment deadline — Monthly via Form TSD by the 10th of the following month (tax due only when a distribution is made) (Income Tax Act (Tulumaksuseadus); Form TSD — https://taxsummaries.pwc.com/estonia/corporate/tax-administration)
• Advance income tax for credit institutions — Banks pay quarterly advance income tax on profit (rate set in law; confirm current percentage) ((approx — confirm)) (Income Tax Act (Tulumaksuseadus) — https://taxsummaries.pwc.com/estonia/corporate/taxes-on-corporate-income)