How to pay dividends and corporate income tax
In case the profit of an Estonian company is not received from the subsidiary where it is already taxed, taxation in Estonia works as follows:
- Decide how much from the 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".
- Latest by the 10th date of the next calendar month 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 on October 15th, then corresponding taxes must be paid and tax returns must be submitted latest by November 10th.
Company tax reference number is required
For payment of taxes you must know your company's tax reference number which you can find below. You need to enter your company's registration number and as a result you get your company's tax reference number. Unfortunately this query works only in Estonian, but since it is very simple, everybody can handle it regardless of the language.
When you have paid the corporate income tax by November 10th the latest, you can complete the payment order like this:
If KRM Advisor provides you accounting services and will submit corresponding tax returns, then we need to have an ID code for private person dividend receiver(s). Estonian (e-residency) or foreign ID code is OK. In case the dividend receiver has no ID code, then that person must obtain an ID code from the Estonian tax authorities.