How to pay dividends and corporate income tax
In case the profit of an Estonian company is not received from subsidiary where it is already taxed - taxation in Estonia works as following:
- Decide how much from gross profit you want to distribute. Let's assume you want to distribute 100 000 EUR gross profit.
- Pay to the shareholder(s) account 80 000 EUR (80% from gross profit you want to distribute). Description might be "distribution of profit" or "distribution of dividends".
- In next calendar month latest 10th you need to submit corresponding tax returns, which are usually done by your accountant in Estonia and pay taxes related to it. If you pay dividends in October 15th then corresponding taxes must be paid and tax returns must be submitted latest November 10th.
Company tax reference number is required
For payment of taxes you must know your company tax reference number which you can find below. You need to enter your company registration number and as a result you get your company tax reference number. Unfortunately this query works only in Estonian, but as it is very simple then everybody can handle it regardless of language.
When latest in November 10th you pay corporate income tax then you can fill payment order in next way:
If KRM Advisor provides you accounting services and will submit corresponding tax returns then we need to have ID code for private person dividend receiver(s). Estonian (e-residedency) or foreign ID code is ok. In case divident receifver has no ID code then that person must obtain ID code from Estonian tax authorities.