Capital Gain Tax In Estonia

Capital gain is difference between sales price of capital asset and value of acquisition, as well as difference between liquidation quota and value of investment.

In Estonia there is no special capital gains tax and capital gains are treated as ordinary income of Estonian resident companies, but are only taxed where there is a profit distribution. The system of corporate earnings taxation in force currently in Estonia is a unique system, which shifts the moment of corporate taxation from the moment of earning the profits to the moment of their distribution. Income tax is charged on all dividends and other profit distributions received by a resident natural person from a foreign legal person in monetary or non-monetary form. Profit distributions are taxed at a rate of 21/79 (approximately 26,6%). 21% is applied to gross payments and 21/79 is applied to net payments.

 
Please see the section “Dividend Tax in Estonia” for a thorough explanation of dividend taxation in Estonia.