Estonia Tax Haven

Capital city:                Tallinn 
Currency:                    Euro (€)         
Population:                1.3 m 
Language:                  Estonian  
GDP                             $39 b USD (2016)

Estonia, officially the Republic of Estonia, is a country in the Baltic region of Northern Europe bordered by the Gulf of Finland, the Baltic Sea, Latvia, and Russia. The territory of Estonia has been inhabited since at least 6500 BC, with Finno-Ugric speakers – the linguistic ancestors of modern Estonians – arriving no later than around 1800 BC. The centuries of successive Teutonic, Danish, Swedish, and Russian rule ended in 1991 when independence was restored.

Since independence the country has rapidly developed its IT sector, becoming one of the world’s most digitally advanced societies. In 2005 Estonia became the first nation to hold elections over the Internet and in 2014 the first nation to provide E-residency. Skype was created by Estonian developers Ahti Heinla, Priit Kasesalu, and Jaan Tallinn and it is claimed that Estonia has the most startups per person in world.
A balanced budget, almost non-existent public debt, flat-rate income tax, free trade regime, competitive commercial banking sector, innovative e-Services and even mobile-based services are all hallmarks of Estonia’s market economy.

The Estonia tax system is attractive due to: 

  • 20% flat tax rate for individuals.
  • Natural persons can defer the tax liability created on income received from financial assets until the time of taking the income into use.
  • The company tax rate is 20%, however the profits are only taxed when distributed to shareholders (not when earned). Therefore, companies can retain profits tax free for reinvestment.
  • The standard VAT tax rate is only 9%.

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"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"

- Bono: U2