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The Republic of Estonia is located in North eastern Europe, borders The Baltic Sea to the west, The Gulf of Finland to the north, Russia to the east and Latvia to the south. Total area is 45,215 sq km (350 km from west to east and 240 km from north to south), land area 43,200 sq km.
The climate is temperate, characterized by warm summers and moderately cold winters. The weather is often breezy and humid due to the proximity of the Baltic Sea. The mean January temperature in Tallinn is -5.0 C (23.0 F); in July the mean temperature is +17.1 C (62.8 F). Average temperatures range from +19 C in summer to -8 C in winter. Average annual rainfall is 568 mm.
ESTONIA is parliamentary
republic
The Government of the Republic has executive power. It implements domestic and foreign policies of the State, issues orders and regulations, submits draft laws to the State Assembly ( Riigikogu ), as well as foreign treaties for ratification and denunciation, prepares drafts of State budgets, administers the implementation of the State budget, etc.
The President of the Republic designates the candidate for Prime Minister, who is given the task of forming a new government. The candidate for Prime Minister reports to the State Assembly the basis for the formation of a new government, after which the State Assembly decides whether to grant authority to form a government.
The State Assembly (101 members) holds legislative power. Elections to the Estonian State Assembly are due every 4 years.
The government is appointed by the President of the Republic.
The Government of the Republic is comprised of the Prime Minister and ministers ( not more than 15).
The population of Estonia is about 1.4 million people. Estonian is the official state language, but people engaged in business can usually also speak English or German. In 1989 Estonian replaced Russian as the official state language. Estonian is a member of the Baltic-Finnic group of the Fenno-Ugric languages (Hungarian, Finnish and Estonian) and is written in the Latin script. It is closely related to Finnish and distantly related to Hungarian.
Estonian currency
The Estonian currency is KROON (EEK)= 0.06391 EUR or 1 EUR = 15,64664 kroons (fixed exchange rate of central bank).
1 Estonian kroon (EEK) = 100 cents; (introduced in June 20, 1992).
On 16 April 2003 Estonia along with nine other acceding countries signed the Treaty of Accession to the European Union, and membership in the European Union was also approved in a referendum on 14 September 2003. According to the Accession Treaty all new Member States join the European Economic and Monetary Union as Member States with a derogation. They become full members once they will adopt the euro and join the euro area. Eesti Pank regards the eventual adoption of the euro an essential step for Estonia's economy, which is to secure a consistently favourable investment climate, improve our competitiveness, and strengthen the conditions for sustained long-term and balanced economic growth, and an increase in the living standard.
The Government of the Republic and Eesti Pank maintain the position that it is Estonia's objective to be technically prepared to adopt the euro by the middle of 2006. Estonia seeks to join the euro area without changes to the framework of the existing currency board system and exchange rate.
Judicial power is held by the Supreme Court.
The Supreme Court has 17 justices. The Chief Justice of the Supreme Court is appointed by the State Assembly (the Riigikogu) on nomination by the President of the Republic. Justices of the Supreme Court are appointed by the Riigikogu on nomination by the Chief Justice of the Supreme Court. Justices are appointed for life.
Since Estonia regained its independence in August 1991, radical economic reforms have placed Estonia at the forefront of development and growth in Eastern Europe.
The introduction of the national currency made it
possible to implement rational monetary and economic policies. The government is required by law to keep the budget balanced. These two constraints have been the major factors that have enabled Estonia to gain control over inflation.
Estonia has established a highly liberal external trade regime with virtually no tariff or non-tariff barriers.
The essence of Estonian trade policy is that, as a small country, it must rely on open economic policies to ensure competitiveness, quickly restructure its domestic industries and provide for long-term growth.
Estonian trade has rapidly shifted away from unstable Eastern markets and turned to the West.
With private ownership, economic activity in the private sector has skyrocketed. The Government has been able to completely privatise the retail and wholesale trade industries, the service industries and the banking sector.
The Government of Estonia is fully committed to free market policies.
This strong commitment has made economic development and reforms irreversible. Growth of GDP is about 4-6 percent per year.
The main sectors of Estonian industry are food processing, textile and garment manufacturing, forestry and wood processing, electrical engineering, chemical products manufacturing, machine-building, construction and construction materials manufacturing.
Today, agricultural production in Estonia accounts for less than 10% of the GDP, with about 10% of the total workforce engaged in that sector.
The service sector is one of Estonia's most significant and rapidly developing areas, especially in the international sphere. Transportation, freight-forwarding and tourism are booming. Estonia's state-of-the-art commercial port in Tallinn (Muuga) has become one of the primary gateways to Russia and the CIS states, offering not only the most modern handling, but what is more, safe and crime-free facilities. Tourism has also skyrocketed since the reopening of Estonia.
Construction services provided in Estonia have grown rapidly.
Quality and expert construction also play a major export role, servicing Russia and other CIS countries. Other traditional Western services such as insurance, financial services, communication services, advertising, etc., are experiencing major growth as they fill in the market niches left empty during the fifty year period of occupation.
European Union
1 May 2004 is a date of historic importance for Estonia as it is Estonia’s date of accession to the European Union. This means that, together with other Member States, Estonia now has the opportunity and the challenge of participating in the development of the European Union.
Being a Member State means integrating our own national interests into the common European interests. For effective participation in the development of the EU, we must take into consideration both the expectations of our citizens and the global challenges confronting the European Union. Many problems that our country is facing can be solved more efficiently in co-operation with other Member States. The broader vision of Estonia as a member of the EU is set forth in the document "Estonian Government’s European Union policy for 2004-2006".
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The modern Baltic Sea region consists of ten countries with a combined population of 90 million people. Estonia offers foreign companies an ideal entrance to the large and fast-growing markets of the Baltic Sea Region.
Companies partly or wholly owned by foreigners account for about 50% of Estonia’s GDP and over 50 per cent of the country’s exports. Estonia leads the way among the Baltic States in Internet usage and today an amazing 35% of the population is using the Internet in one way or other, a figure that is higher than in most other countries.
A key to success for any business thinking of investing in Estonia is its highly skilled, hardworking, well-educated and cost-effective labour force, willing to learn and flexible in their approach to new technologies and ideas.
A ’warm welcome’ to business is reflected in many areas of living and working in Estonia.
More specific information about investment factors are available on internet site
www.eia.ee. (Estonian Investment Agency).
Government incentives
There are almost no direct subsidies to individual business in Estonia.
It is possible for assistance to be given towards the costs of a single project of significant social or environmental benefit.
Sources of Finance
When setting up a business in Estonia finance can be raised from the following sources:
Banks
Estonian central bank is Eesti Pank.
The mission of Eesti Pank as the central bank of Estonia is to strengthen both domestic and international confidence in the stability and integrity of the Estonian currency and the Estonian monetary system.
Main Objectives of Eesti Pank:
- To ensure the value and integrity of the Estonian kroon in fulfilling the functions of the currency.
- To promote the efficiency and stability and support the development of the Estonian financial system.
- To meet the cash demand of the public.
Biggest commercial banks are Hansapank, Ühispank, Nordea pank, Sampo pank.
Short term financing of working capital
Banks in Estonia offer two types of credits to finance your working capital:
overdraft
working capital loan
The choice is made considering the period of time between expenses and incomes. Overdraft is used for short term financing, working capital loan is used to finance an entire season.
Long term investment loan
A company's equity may not be sufficient to finance a new project. It is also unreasonable to use equity as the use of foreign capital is generally cheaper and the return on equity is higher. A long term investment loan is meant for financing the purchase of new machinery, buildings, reconstruction or repairs of buildings, construction, or long term need for working capital, that is caused by purchase of merchandise needed to start a new project and growing debts.
A good business plan and self-financing of at least one third of the total cost are prerequisites in order to finance a new project with a loan. The bigger share of self-financing reduces the risk of the entrepreneur (smaller expenses) as well as the banks. The bank expects the loan to be paid from the project's income, i.e. from natural business not by selling the collateral.
Bank guarantees
Bank guarantees give an added security to your business. It is in fact deposited funds, which your business partner will definitely receive in case of faulty payments, products, etc.
Common bank guarantees are:
payment guarantee: the bank guarantees payment on time; guarantee of an offer: the bank guarantees fulfilment of obligations arising from changed or declined offer; guarantee of advanced payment: the bank guarantees designated use of advance payment; performance bond: the bank guarantees fulfilment of obligations arising from inept performance; warranty bond: the bank guarantees the cover for expenses arising from inept quality of product or service. The bank also issues several guarantees for the Customs Board (guarantees of import taxes, principal, bonded warehouse and customs brokerage).
Leasing and factoring
If you wish to buy something valuable, but lack funds, you have another option to loans - leasing. The difference between loan and leasing is that when you take a loan, you are paying for the purchase; if you lease something, the leasing company pays for it. Until you have returned the contractual sum the purchase will remain the property of the leasing company, but you are using it. This is why it is often easier to get a leasing contract than a loan, as generally leasing company does not require additional terms and collateral.
Collateral
According to the law of credit institutions every loan must have collateral. Mostly banks accept different collateral depending on the type of loan:
movables - goods in stock, deptors, cars, etc. - can be used as a collateral for a short term loan. Long term loan requires mortgage of an immovable, or other acceptable collateral. Warranties of a legal or private person are accepted primarily as an additional security.
Acceptance levels of collateral usually are:
66% of an apartment or a dwelling with a market value below one million
60% of an apartment or dwelling with a market value over one million
60% of the market value of an office building
50% of the market value of a production building
60% of permanent stock
60% of deptors
40% of fixed assets
50% of the market value of vehicles
20% of the equity of the warranting legal person
Revolving credit
line
A revolving credit line is an advanced version of overdraft and working capital loans, characterised by the following features:
flexibility of use
optimal expenses
The product allows to repeatedly finance one's activities with an interest rate corresponding to the length of the financed period within the extent of the agreed limit.
The essence and advantages of the revolving credit line are as follows:
The limit agreement can be concluded for a period of up to five years.
Several loans with different amounts and maturities can be in use at the same time, the corresponding base interest being the floating rate, which depends on the maturity (e.g. one month Talibor for a one-month disbursement, two months Talibor for a two-month disbursement, etc.). The agreed margin shall be added to the base interest upon conclusion of the limit agreement.
A new disbursement may be made if there is a corresponding unused amount of the credit limit. The maturity of every disbursement is a full month or several full months.
The advantage for companies is the optimal interest cost, because loan amounts are disbursed and repaid according to the actual projected periods when the company needs additional working capital
An overdraft is also flexible, but unlike a revolving credit line, it is usually priced with an interest rate corresponding to the final maturity.
Working capital loans may be taken with final repayment dates that correspond to the seasonality of the company`s activities, but unlike a revolving credit line, they can not be repeatedly used.
Foreign Exchange Controls
There are no foreign exchange controls. Certain rules preventing money laundering must be followed in banks.
Employment Regulation
Activities as a sole proprietor, employment with an employment contract, a contract for services or any other contract shall be deemed to be employment in Estonia.
If you wish to come to work in Estonia the employer, who wants to hire you, must complete a standard application form for a work permit which can be obtained from regional departments of the Citizenship and Migration Board and submit an application form to a local authority of the Board of the Labour Market to receive its consent to work in Estonia.
If you wish to work for several different employers you have to apply for separate work permits for employment by each of them.
A local authority of the Board of the Labour Market shall take the decision on whether to give its consent or not, within 15 working days from the date of submission of an application.
You may obtain a work permit for employment in Estonia for up to five years.
If a local authority of the Board of the Labour Market has given its consent for issuing you a work permit, as a general rule, you should apply for a residence permit at the consulate of the Republic of Estonia.
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Principal Forms of Business are:
- Public limited company
(Aktsiaselts or AS)
- Private limited company
(Osaühing or OÜ)
- Limited partnership
(Usaldusühing or UÜ)
- General partnership
(Täisühing or TÜ)
- Commercial association
(Tulundusühistu or Ühistu)
- Sole proprietor
(Füüsilisest isikust ettevõtja or FIE)
- Branch
(Filiaal)
Formation Procedures and Balance Date
The company may only have one business name.
The business name of a company must contain AS, OÜ, UÜ, TÜ or “Ühistu”.
A sole proprietors business name must usually contain the given name and surname of the sole
proprietor and shall not contain an appendage or abbreviation referring to a company.
A company shall be entered in the commercial register.
Public limited company (Aktsiaselts or AS)
The minimum capital of a public limited company is EEK: 400 000.- (EUR 25564,59).
The minimum nominal value of a share shall be ten kroons (EEK: 10.-).
If the nominal value of a share is greater then ten kroons, the nominal value shall be a multiple of ten kroons.
A public limited company may be founded by one or several persons and a founder may be a natural person or a legal person. The founders shall conclude a memorandum of association. By conclusion of the memorandum of association, the founders shall also approve the articles of association as an annex to the memorandum of association. The founders shall not reserve any rights for themselves which do not arise from the shares.
A payment for shares may be a monetary or non-monetary contribution.
Upon foundation, the founders shall open a bank account in the name of the public limited company being founded into which monetary contributions shall be paid.
A non-monetary contribution may be any thing which is monetarily appraisable and transferable to the public limited company or a proprietary right which may be the object of claim. A non-monetary contribution shall not be service or work provided to a company or the activity of the founders in the foundation. A shareholder must give notice of the rights of third persons with regard to a non-monetary contribution, if notice is not given the shares must be paid for in cash. An auditor shall audit the valuation of a non-monetary contribution and shall present an opinion on the abovementioned matters.
The management board shall submit a petition for entry of the public limited company in the commercial register within two month after adoption of the articles of association.
A public limited company may also be purchased “off the shelf”. Such companies are already registered, but have had no prior business activities.
Shareholders shall exercise their rights in a public limited company at the general meeting of shareholders.
Shareholders shall elect a supervisory board at the general meeting.
The Supervisory board shall have a minimum of three members and in order to elect a member of the supervisory board, his or her written consent is required.
The Supervisory board elects members of the management board, plans activities of the company, organizes management of the company and supervises the activities of the management board.
The management board is a directing body of the public limited company which represents and directs the public limited company. A member of the management board need not be a shareholder. The members of management board shall be jointly liable for any damage wrongfully caused to the public limited company or shareholders by violation of the requirements of law or of the articles of association, or by failure to perform their obligations.
A public limited company must be registered in the commercial register. There are no significant fees for the registration, but usually a foreign company will have to pay for local professional advice and assistance.
The management board shall organise the accounting of a public limited company according to the requirements of the Accounting Act of the Republic of Estonia.
The Annual reports of a public limited company must be audited.
Private limited company (Osaühing or OÜ)
The minimum capital of a private limited company is EEK: 40 000.- (EUR 2556,46).
The minimum nominal value of a share shall be 100 kroons. Greater nominal value of the share shall be multiple of 100 kroons. Shares may have the same or different nominal values.
The management board is the directing body of the private limited company. The members of the management board shall be elected and removed by shareholders.
A Private limited company must have a supervisory board if their capital exceeds EEK: 400 000.- ( minimum capital of a public limited company).
A Private limited company must be founded and registered in the commercial register in the a same way as a public limited company.
Limited partnership (Usaldusühing or UÜ)
A limited partnership is a company is which two or more persons operate under a common business name, and at least one of the persons (general partner) is liable for the obligations of the limited partnership with all of the general partners assets, and at least one of the persons (limited partner) is liable for the obligations of the limited partnership to the extent of the limited partners contribution.
General partnership (Täisühing or TÜ)
A general partnership is a company in which two or more partners operate under a common business name and are jointly liable for the obligations of the general partnership with all of their assets.
Commercial association (Tulundusühistu or Ühistu)
Commercial association must be founded according to the Association Act. The Main differences according to this act between limited companies and associations are in respect of voting procedures and dividend payments. Votes of members are equal, dividends are limited, profit is divided according to members participation in main activities of the association. Commercial association membership status is voluntary.
Sole proprietor (FIE)
A sole proprietor shall be entered in the commercial register at his or her request. A sole proprietor shall be entered in the commercial register if he or she is registered with the Tax Board as a taxpayer pursuant to a Value Added Tax Act.
Branch (Filiaal)
If a foreign company wants to permanently offer goods or services in its own name in Estonia, it shall enter a branch is the commercial register.
A branch is not a legal person.
Accounting and Audit requirements
Financial statements must be prepared according to Accounting Act statutes and local GAAP. Generally The Estonian Accounting Act and local GAAP are similar to IAS, but there are differences in some areas. (The Estonian Accounting Act is short IAS.)
The Balance sheet and income statement formats are prescribed in the Accounting Act.
The Fiscal year for every form of business usually begins on the 1 of January and ends on the 31, of December. , but according to the Accounting Act there are three other possibilities on quarter dates. A Fiscal year is 12 month, but in the first year or in a period of changing a fiscal year may be longer up to 18 month.
The management board submit the approved and audited annual report to the commercial register not later than six month after the end of the financial year, usually 30. of June. A list of holders of registered shares who hold more than 10% of the votes at the date of approval of the annual report on general meeting must be presented with the annual report.
Annual reports must be presented to the commercial register by 30. of June.
State Authorised public accountant must audit the annual report of all public limited companies.
For other companies there are certain requirements:
Annual reports of other companies do not need to be audited if two of three conditions are present:
1. annual turnover is less than EEK: 6 000 000.-
2. assets are less than EEK: 3 000 000.-
3. less than 5 employees
Annual reports are open for public inspection in the Commercial Register.
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The following are the state taxes:
1) income tax;
2) social tax;
3) land tax;
4) gambling tax;
5) value added tax;
6) customs duty;
7) excise duties;
8) heavy goods vehicle tax.
Fiscal Year
The Fiscal Year for income tax returns is the calendar year.
General Structure
In Estonia there are three main taxes:
- Income Tax – in general 26% flat rate.
- Value Added Tax – in general 18%
- Social Tax (which includes health insurance tax) – in general 33%
Estonia has conventions for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital with 22 states.
Corporate Taxation
A legal person is a resident if it is established pursuant to Estonian law.
A natural person is a resident if he or she has a permanent place of residence in Estonia or stays in Estonia for 183 days or longer during a fiscal year.
Income tax:
A resident legal person shall pay:
1) income tax on fringe benefits granted to a natural person, on gifts and donations, dividends and other profit distributions, and expenses and transactions not related to business, made by a resident legal person, and
2) withhold income tax from payments listed below:
- salaries, wages and other remuneration subject to income tax paid to a resident natural person , and remuneration paid to members of the management and controlling bodies of a legal person
- salaries, wages and other remuneration paid to a non-resident , and remuneration paid to non-resident members of the management and controlling bodies of a legal person
- remuneration or service fees paid to a natural person on the basis of a contract for services, authorisation agreement or any other contract under the law of obligations, including payments made under a contract prescribed in subsection of the Sports Act, unless the recipient of the payment is entered in the commercial register or registered with the local Tax Board office as a sole proprietor
- interest subject to income tax, paid to a non-resident or to a resident natural person
- dividends subject to income tax (unless on a shareholding of over 25% of the share capital), paid to a non-resident ;
- insurance indemnities, pensions, payments from a pension fund, scholarships, grants, and other benefits or maintenance support subject to income tax, paid to a non-resident or to a resident natural person
- rent from a commercial or residential lease or payment for encumbering a thing with limited real rights, paid to a non-resident or to a resident natural person, unless the recipient of the payment is entered in the commercial register or registered with the local Tax Board office as a sole proprietor;
- royalties paid to a non-resident or to a resident natural person
- payments made to a non-resident artist, sportsman or sportswoman for activities conducted in Estonia, and payments made to a third person who is a non-resident or a natural person for activities conducted in Estonia by an artist, sportsman or sportswoman
- payments to a non-resident for services provided in Estonia , unless the non-resident has a branch entered in the Estonian commercial register or other permanent establishment registered with the local Tax Board office;
- payments to a legal person located in a low tax rate territory for services provided to an Estonian resident ;
- Insurance indemnities and payments from pension fund subject to tax at reduced rate to a natural person.
“Permanent establishment” means the place through which the permanent economic activity of a non-resident is fully or partially carried out in Estonia.
The Taxation of a permanent establishment of non-resident in Estonia is nearly the same as listed above for legal person as a resident with some additions.
According to the Income Tax Act profit of the company is not taxable in principle if it is not paid out to a natural person or non-resident.
Income Tax Act text in English is available on the internet site www.ma.ee
Value Added Tax
Information in this booklet on VAT is represented on the basis of new VAT Act in force from 01.05.2004.
The following shall be subject to value added tax:
- supply created in Estonia, except a supply which is exempt from tax;
- import of goods into Estonia , except imports exempt from tax according to the act;
- provision of services the place of supply of which is not Estonia (§ 10 (5)), except supply exempt from tax;
- supply of goods or services specified in subsection 16 (3) of the Act, when taxation is voluntary if the taxable person has added value added tax to the taxable value of such goods or services;
- intra-Community acquisitions of goods , except intra-Community acquisitions of good which are exempt from tax (in the E U)
Value added tax is applied as tax on added value, with the exception of special cases arising from this Act.
Value added tax rates
(1) The rate of value added tax shall be 18 per cent of the taxable value, except in the cases provided for in subsections (2)-(4) of this section.
(2) The rate of value added tax on the following goods and services shall be 5 per cent of the taxable value:
1) books, excluding learning materials specified in clause 16 (1) 6) of this Act;
2) medicinal products, medical equipment or medical devices within the meaning of the Social Welfare Act
3) chemical pest control agents (biocides) registered with the Health Protection Inspectorate, specified in the list established by a regulation of the Minister of Social Affairs, if the purchaser is a social welfare institution or health care provider;
4) handling of hazardous waste;
5) funeral items and services;
6) organisation of performances or concerts by a state, municipal or private performing arts institution or the national opera on the condition that the funds received by the organiser of the performance or concert from the state, rural municipality or city budget or the Cultural Endowment of Estonia amount to at least 10 per cent of its budget revenue for the calendar year;
7) heat sold to natural persons for personal use, heat sold to housing associations, apartment associations, churches, congregations, persons who own hospitals, and legal persons or bodies financed from the state budget or a rural municipality or city budget for own use, and peat, fuel briquettes, coal or firewood sold to natural persons for personal use;
8) accommodation services or accommodation services with breakfast provided by an accommodation establishment provided for in the Tourism Act
9) periodicals.
(3) The rate of value added tax on the following goods shall be 0 per cent of the taxable value:
1) exported goods,
2) goods where their transfer and transport to another Member State or transport to another Member State without transfer is deemed to be intra-Community acquisition of goods,
3) sea-going vessels navigating in international waters, except pleasure craft used for purposes other than those of business interests, and equipment, spare parts and fuel used on such sea-going vessels and goods transferred to passengers for consumption on board, except goods sold on board sea-going vessels during intra-Community passenger transport to be taken away;
4) aircraft used by an air carrier operating mostly on international routes and equipment, spare parts and fuel used on such aircraft and goods transferred to passengers for consumption on
board, except goods sold on board of such aircraft during intra-Community passenger transport to be taken away;
5) goods transferred and transported to another Member State to a diplomatic representative, a consular agent (except an honorary consul), a representative or representation of a special mission or an international organisation recognised by the Ministry of Foreign Affairs, a diplomatic representation or consular post of a foreign state, a special mission or a Community institution;
6) goods transferred and transported to another Member State which is a Member State of the North Atlantic Treaty Organisation (hereinafter NATO) and intended either for the use of the armed forces of any other NATO Member State or the civilian staff accompanying them, or for supplying their messes or canteens when such forces take part in the common defence effort;
7) non-Community goods (as defined in the Community Customs Code) placed in a free zone or free warehouse, where such goods have not been placed under any customs procedure and have not been consumed or used under conditions other than those prescribed by the customs rules;
8) non-Community goods, including non-Community goods placed in a free zone or free warehouse, placed under the customs warehousing procedure, the inward processing procedure applying the suspension system, the procedure for processing under customs control, the transit procedure or the temporary importation procedure with total relief from import duties, and non-Community goods in temporary storage on the condition that the goods have not been unlawfully removed from under customs supervision or consumed or used under conditions other than those prescribed in the customs rules.
(4) The rate of value added tax on the following services shall be 0 per cent of the taxable value:
1) services where the place of supply is not Estonia, excluding cases where the supply of such services is exempt from tax.
2) the provision of services to passengers on board vessels or aircraft during the international transport of passengers;
3) the provision of port services to meet the direct needs of vessels navigating in international waters;
4) the provision of navigation services and airport services to meet the direct needs of aircraft used mostly on international routes;
5) international express mail services;
6) 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 aircraft used by an air carrier operating mostly on international routes, and the repair, maintenance and hiring of or establishment of a usufruct on equipment used on such vessels or aircraft;
7) services directly related to the export of goods carried out by an intermediary acting in the name and for the account of another person or to the provision of services specified in this subsection.
The VAT number must be shown on invoices.
VAT Act text in English is available on the internet site www.ma.ee
Social Security Tax:
Social tax shall be paid:
- on wages and other remuneration paid to employees in money;
- on wages and other remuneration paid to public servants.
- on remuneration paid to members of the management or controlling bodies of legal persons and to the trustee in bankruptcy and members of the bankruptcy committee in the bankruptcy proceedings of a natural person.
- on the business income of sole proprietors,
- on remuneration paid to natural persons on the basis of contracts for services, authorisation agreements or contracts under the law of obligations entered into for the provision of other services
- on fringe benefits
- on benefits paid pursuant to the Unemployment Insurance Act;
- on remuneration which is not specified in this subsection and which is paid pursuant to an Act or other legislation for the performance of work.
Payers of social tax
- resident legal persons;
- natural persons;
- non-residents who have a permanent establishment in Estonia or who make payments specified in subsection 2 (1) of the Act;
- state, rural municipality and city authorities;
- the state, in the cases specified in § 6 of the Act.
The rate of social tax is 33 per cent of the taxable amount.
Social Tax Act text in English is available on the internet site www.ma.ee
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is a company, which has been created by four certified auditors of the Republic of Estonia for rendering auditing, accounting and financial consultation services to business entities, but also to municipal administrations, their institutions and non-profit associations, and to individual undertakers.
HLB Expertus Audit Ltd. Is registed as “auditor company” according to Estonian Auditing Law from august 2001.
As our mission we consider to be
offering a package of services, as a result of which the financial success, financial stability and efficiency of our clients would increase, and the financial risks would decrease. The precondition of achieving the success is, in our opinion, bringing the accounting on a high level.
We offer a rational business relationship to our clients that should be a natural part of the development of their enterprises.
Our goal is to make using the financial services as easy as possible to the clients. Reaching to such a relationship is possible if collaboration with the clients’ accountants and management is intense and continuous.
Up-to-date effective auditing,
financial planning, financial and tax consulting requires the international work experiences to be progressively considered, the demand for knowledge concerning international tax system and internationally accepted accounting principles is growing also, as a result of which, in 2000 we joined the international association of auditor companies HLB International offering services of auditing, accounting and financial consultation.
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