Ship Taxation in Estonia
Ship taxation in Estonia falls under corporate income tax. Unlike the other Baltic states the Tonnage tax systems is not yet used in Estonia. It is important to bear in mind that in Estonia in contrast to a number of European countries there is no systematic monthly corporate tax. Instead a resident company shall pay income tax on profits distributed as dividends or any other profit distributions in monetary or non-monetary form upon their payment.
With regard to the distribution, the income tax is not charged on profit distributed by the way of a bonus issue. Furthermore there are several exception situations where taxation on the corporate level is applied. In accordance with Estonian legislation such corporate income tax can be imposed on the resident legal person or a non-resident legal person that has a registered permanent establishment in Estonia.
A legal person is considered a resident if it is established in accordance with Estonian law.
Value Added Tax in Estonia
In Estonia to all registered ships the Value Added Tax incentives apply (VAT).
Rate for Value Added Tax is zero per cent (0%) of the taxable value for sea-going vessels navigating in international waters, except pleasure craft used for purposes other than those of business interests, and equipment, spare parts, fuel and other supplies used on such sea-going vessels and goods to be transferred to passengers for consumption on board, except goods sold on board sea-going vessels during intra-Community passenger transport to be taken away;
The rate for Value Added Tax is zero per cent (0%) of the taxable value for the repair, maintenance, chartering and hiring of or establishment of a usufruct on sea-going vessels navigating in international waters, except pleasure craft used for purposes other than business and the repair, maintenance and hiring of or establishment of a usufruct on equipment used on such vessels.
There is a flat income tax rate for natural persons, which is 21%. Starting form 2015 tax rate changes into 20%.
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