The draft, which has been causing quite a stir amongst taxpayers for some time, has taken on a new form. Although its scope has been narrowed, the proposed measures should still be of interest to companies utilising the Estonian CIT regime.
The draft provides for:
- the removal of the option to join the Estonian CIT scheme during the financial year,
- an ‘amnesty’ for companies that have not prepared or signed their interim financial statements on time,
- the option to treat employees and contractors as a single category provided the employment condition is met,
- new rules for the taxation of profits distributed after exiting the Estonian CIT scheme.
The amnesty for companies that faced difficulties in preparing or signing their interim financial statements on time due to opting into the Estonian CIT scheme during the financial year is currently attracting the most attention.
Of particular interest is the change concerning the presumption of distribution of profits generated during the period under the Estonian CIT regime but paid out only after exiting that system. Linked to this is a proposed amendment to the PIT Act, which would exclude the possibility of reducing a shareholder’s PIT by the portion of Estonian CIT paid by the company. This potentially creates scope for numerous uncertainties and disputes with the tax authorities.
Is your company prepared for the changes to the Estonian CIT regime from 2027? Or perhaps it will be able to benefit from the amnesty relating to interim financial statements? We invite you to contact our advisors to analyse the impact of the new regulations on your company’s situation.