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Business consulting services
Our business consulting services can help you improve your operational performance and productivity, adding value throughout your growth life cycle.
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Business process solutions
We can help you identify, understand and manage potential risks to safeguard your business and comply with regulatory requirements.
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Business risk services
The relationship between a company and its auditor has changed. Organisations must understand and manage risk and seek an appropriate balance between risk and opportunities.
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Cybersecurity
As organisations become increasingly dependent on digital technology, the opportunities for cyber criminals continue to grow.
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Forensic and investigation services
At Grant Thornton, we have a wealth of knowledge in forensic services and can support you with issues such as dispute resolution, fraud and insurance claims.
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Mergers and acquisitions
Globalisation and company growth ambitions are driving an increase in M&A activity worldwide. We work with entrepreneurial businesses in the mid-market to help them assess the true commercial potential of their planned acquisition and understand how the purchase might serve their longer- term strategic goals.
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Recovery and reorganisation
Workable solutions to maximise your value and deliver sustainable recovery
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Transactional advisory services
We can support you throughout the transaction process – helping achieve the best possible outcome at the point of the transaction and in the longer term.
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Valuations
We provide a wide range of services to recovery and reorganisation professionals, companies and their stakeholders.
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IFRS
The International Financial Reporting Standards (IFRS) are a set of global accounting standards developed by the International Accounting Standards Board (IASB) for the preparation of public company financial statements. At Grant Thornton, our IFRS advisers can help you navigate the complexity of financial reporting from IFRS 1 to IFRS 17 and IAS 1 to IAS 41.
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Audit quality monitoring
Having a robust process of quality control is one of the most effective ways to guarantee we deliver high-quality services to our clients.
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Global audit technology
We apply our global audit methodology through an integrated set of software tools known as the Voyager suite.
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Corporate and business tax
Our trusted teams can prepare corporate tax files and ruling requests, support you with deferrals, accounting procedures and legitimate tax benefits.
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Direct international tax
Our teams have in-depth knowledge of the relationship between domestic and international tax laws.
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Global mobility services
Through our global organisation of member firms, we support both companies and individuals, providing insightful solutions to minimise the tax burden for both parties.
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Indirect international tax
Using our finely tuned local knowledge, teams from our global organisation of member firms help you understand and comply with often complex and time-consuming regulations.
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Innovation and investment incentives
Dynamic businesses must continually innovate to maintain competitiveness, evolve and grow. Valuable tax reliefs are available to support innovative activities, irrespective of your tax profile.
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Private client services
Our solutions include dealing with emigration and tax mitigation on the income and capital growth of overseas assets.
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Transfer pricing
The laws surrounding transfer pricing are becoming ever more complex, as tax affairs of multinational companies are facing scrutiny from media, regulators and the public
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Tax policy
Tax policies are constantly evolving and there are a number of complex changes on the horizon that could significantly affect your business.
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Outsourcing Changes to the Outsourcing legislation, specifically when offshoringSignificant changes to the dynamic of the financial services sector in recent years have shifted the paradigms in how we work. The increased digitisation of the workforce, changes in business models, globalisation, and remote working capabilities have led to a new approach to the delivery of services.
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Asset management Inflation and tax planningThe recent onset of rapid inflation is an unwelcome development that is having a widespread impact on US businesses and tax planning.
Grant Thornton Estonia can assist expatriates and their employers with Estonian tax and employment related matters including advice on tax planning opportunities, management of assignment policies and the provision of tax filing services.
Click on each of the areas below to expand for more information:
Non-EU nationals, who are residing in Estonia based on residence permit are, in general, permitted to work in Estonia.
Non-EU nationals who are staying temporarily in Estonia are permitted to work in Estonia if:
- the right to work follows directly from a law or a treaty or
- their short-term employment has been previously registered by the employer in the Police and Border Guard Board.
Employers without a legal entity or a branch in Estonia must register as a non-resident employer at the Estonian Tax and Customs Board prior commencing activities in Estonia.
To work in Estonia, a non-EU national must hold a valid residence permit that entitles him/her to work.
An EU, EEA and Swiss national may reside and work in Estonia without registration of his/her right of temporary residence for a term of up to 3 months.
More information regarding working in Estonia can be found on Police and Border Guard webpage.
Grant Thornton Estonia can help with applying for visa and registering the short-term employment in Estonia, as well as with registering the right of residence for EU nationals in Estonia.
The tax year in Estonia is a calendar year.
The filing date for an individual’s tax return is 30 April following the year-end, tax payment date is 1 October.
Income tax is withheld by the employer on monthly basis; therefore the filing obligation depends on whether the individual has received income during a tax year from which income tax has not been withheld (e.g. capital gain, rental income, income from foreign sources, etc.).
Tax return should be submitted also in case the individual wishes to use deductions which are not automatically applied.
Individuals are taxed with a flat income tax rate at 20%.
Certain income is subject to lower rates:
- 7% withholding tax on regularly distributed dividends
- 10% on payments from pension funds if certain conditions are met.
Tax residents of Estonia are taxed on worldwide income, whereas non-residents are taxed on Estonia source income only (eg employment performed in Estonia, income from real estate located in Estonia).
Generally, an individual is a tax resident of Estonia if he or she resides in Estonia or if she or he stays in Estonia for at least 183 days during a period of 12 consecutive months.
Treaty residency principles are applied in case double tax treaty is in place.
Taxable income from employment includes salaries, wages, bonuses, lump sum payments, allowances and other cash payments related to employment.
The employer is obliged to withhold income tax and report it together with social security contributions to the Estonian Tax and Customs Board on monthly basis.
Non-resident individuals with an A1 certificate can report Estonia source salary via individual tax return, therefore in some cases non-resident employer registration is not necessary.
Employment income is deemed to be sourced in the country in which the employment services are physically performed.
Director’s fees related to management of Estonian company are taxable in Estonia.
Employee fringe benefits are subject to fringe benefit tax (FBT). This tax is imposed on employers and is not reported as individual’s income. Common examples of benefits subject to FBT include accommodation, motor vehicles, catering, provision of services, goods or assets, including shares, free of charge or under market price.
Stock options are exempt from FBT in case the period between granting an option and transferring the underlying share to the employee is a least three years.
There are no specific concessions for expatriates in Estonia.
Double taxation is avoided either by exempting foreign income in Estonia (dividends and employment income under certain conditions) or crediting foreign tax against Estonian tax (up to 20%).
Double tax treaties may provide exemption instead of credit method.
Following deductions are available in Estonia:
- basic tax exemption depending on the amount of annual income (available if annual income is less than EUR25,200)
- additional tax exemption as of second child
- housing loan interest paid to EEA credit institution
- educational expenses of the individual and/or her dependents
- gifts and donations to listed non-profit organizations, foundations and religious associations
- payments to voluntary EEA pension funds up to 15% (and not more than EUR6,000) of the taxable income
- unemployment insurance and II pillar pension fund contributions
Housing loan interest, training expenses and gifts and donations can be deducted in total up to EUR1,200.
Income tax 20% is withheld after the deduction of basic exemption and employee’s social security contributions.
Income tax and social security contributions are reported by the employer to the Tax and Customs Board on monthly basis by 10th day following the salary payment.
Capital gains are taxed with 20% income tax.
Social security payments in Estonia are divided between the employer and employee as follows:
- 1.6% unemployment insurance and 2% pension fund contribution are withheld by the employer from the gross salary
- 33% social tax and 0.8% unemployment insurance contribution is paid by the employer
Pension fund contributions are applicable only for residents who have joined the II pillar pension fund scheme.
Share plans, including stock option plans fall under fringe benefit taxation rules. Taxable event arises when the shares are transferred to the employee free of charge or under market price.
Exemption from FBT applies in case the shares are acquired by the employee after three years as of the date of grant. Exemption applies also to stock options granted by another company belonging to the same group with the employer.
In order to apply the exemption, specific conditions must be met. Therefore, we strongly recommend consulting with Grant Thornton Estonia with regards to tax treatment of stock options as well as other share plans.
There are no other taxes on employment or other type of income.
For further information on expatriate tax services in Estonia please contact:
Kristjan Järve
E kristjan.jarve@ee.gt.com
Urzula Välb
E urzula.valb@ee.gt.com