1Office tax consultation team has put together a simple comparison table of the primary corporate and personal taxes in Estonia and neighboring countries. These tables are to be considered informative and general. For personalised tax advice, please contact us at uk@1office.co.
Corporate Taxes
Estonia
VAT Tax: Standard 22%, threshold 40 000 €
VAT reduced rate: 9% is applied to books, periodicals (with few exceptions), hotel accommodation services, and listed pharmaceuticals. 5% is applied to certain periodicals both on physical medium and electronically
VAT zero rate and exempt from VAT
The VAT rate on the export of goods and certain services is 0%. Health care, education, insurance, certain financial, and transactions with securities, are exempt. Transactions in real estate are generally exempt from VAT. Transactions in new and significantly renovated buildings and building land are taxable (22%). Taxpayers can elect to add VAT to real estate transactions if certain conditions are met.
Corporate income tax: 20% (20/80 on net distributions)
Dividend tax: Standard rate 20% (20/80 on net distribution) Reduced rate 14% (14/86) on regularly distributed dividends. In cases where the recipient of the 14% dividend is either a resident or non-resident individual, a 7% WHT rate will apply unless a tax treaty provides for a lower WHT rate (5% or 0%).
Fringe benefit: tax 20/80 income tax and 33% social tax.
Gifts, donations, costs of entertaining guests, missing documents 20/80 income tax.
The contribution to the mandatory funded pension: N/A
Social security contributions: 33% social tax and 0,8% unemployment tax.
Lithuania
VAT Tax: Standard 21%, threshold 30 000€
VAT reduced rate: 9% for books, newspapers and periodicals, heating, accommodation, some public transportation 5% for medicine and some medical equipment
VAT zero rate and exempt from VAT: 0% for intra-community and international transport
Corporate income tax: 15%. 20% corporate income tax rate is applicable to credit institutions. 0% and 5% rates may be applied under certain conditions.
Dividend tax: 0% or 15%, reduced rates may be applied according to Double Treaty Taxation (DTT)
Fringe benefit tax: Most employee benefits are treated as employment income, subject to personal income tax and social security contributions.
The contribution to the mandatory funded pension: N/A
Social security contributions: 1.77-2.49 %
Latvia
VAT Tax: Standard 21%, threshold 30 000 €
VAT reduced rate: 12%, food for infants, pharmaceuticals, medical products for disabled persons, domestic passenger transportation, books (excluding e-books), newspaper and periodicals, accommodation, district heating 5%, range of locally grown vegetables and fruit
VAT zero rate and exempt from VAT: 0% for intra-community and international transport
Corporate income tax : 20% (only dividends are taxed, earnings are not taxed as long as they are reinvested in the company)
Dividend tax: 0% or 20%/10%, reduced rates may be applied according to DTT
Fringe benefit tax N/A
The contribution to the mandatory funded pension N/A
Social security contributions: 23,59%
Sweden
VAT Tax: Standard 25%, threshold 80 000 SEK
VAT reduced rate: 12% for grocery, restaurants, accommodation 6% for public transportation, books, cultural and sport events tickets
VAT zero rate and exempt from VAT, 0% for healthcare, dental care, social, educational, banking and insurance services. Reverse charge VAT 0% in the construction industry.
Corporate income tax 20,6%
Dividend tax: Swedish tax residents are taxed with the 3:12 rule. Lower limits are taxed with a 20% income tax. The part between the lower and upper limit is taxed as a private person’s income tax. The part that is exceeding the upper limit is taxed with 30% income tax. Non-tax residents are taxed based on the tax treaty or with 30% income tax.
Fringe benefit tax: Taxed as employment income (progressive or 30% income tax and 31,42% social tax)
The contribution to the mandatory funded pension: Included in the social tax
Social security contributions: 31.42%; young and elderly 10,21%
Finland
VAT Tax: Standard 24%, threshold 15 000 €
VAT reduced rate: 14% for groceries; 10% for public transportation and cultural events
VAT zero rate and exempt from VAT: 0% for postal, insurance and healthcare services
Corporate income tax: 20%
Dividend tax: A non-publicly listed company 7,5% up to 150 000 €, 28% exceeding part.
Fringe benefit tax: N/A
The contribution to the mandatory funded pension: 25,85% basic fee (TyEL)
Social security contributions: 1,34%; Unemployment insurance 0,5% up to 2 197 500 €; 2,05% from 2 197 500 € exceeded part.
UK
VAT Tax: Standard 20%, threshold £85 000
VAT reduced rate: 5% for electricity, gas and heating oil for non-business use, energy-saving materials, some hygienic products, some construction works
VAT zero rate and exempt from VAT
0% public transportation, groceries, periodicals, children’s clothing, some construction work for housing, insurance, financial services, direct mail services, books, publications
Corporate income tax
19%
Dividend tax
From 6 April 2022, for one year, tax on dividend income will increase by 1.25 percentage points. Basic rate 8.75%; Higher rate 33.75%; Additional rate 39.35%
Fringe benefit tax
Taxed as employment income (personal income tax and national employer’s insurance)
The contribution to the mandatory funded pension
Must register employees into the pension scheme if their earnings are above £10,000 per year and they are aged 22+. If you are under the age of 22 but earn more than £6,240 per year you have the right to opt into the workplace 2022/23 Employer contributes minimum 5% and employee contributes 3%
Social security contributions
From 6 April 22 to 5 November 22 (7 months Employer National Insurance Contributions have risen to 15.05% on all earning above £175. From 6 November 22 to 5 March 23 (5 months) Employer National Insurance Contributions was reduced to 13.8%. Employment allowance has also increased to £5,000.
Ireland
VAT Tax
VAT is charged at the standard rate of 23%. €40,000 threshold for the supply of services. €80,000 threshold for the supply of goods.
VAT reduced rate
Reduced rate of 13.5% applies, inter alia, to the supply and development of immovable goods, labour-intensive services (e.g. certain repair and related services), energy products and supplies, and the supply of certain food and drink provided in the course of catering. The 9% rate is applicable to the provision of facilities for taking part in sporting activities and the supply of periodicals (e.g. magazines, newsletters and sectoral publications, etc). Finance (No.2) Act 2023 has further extended the temporary application of the 9% rate of VAT to the supply of electricity and gas (which is ordinarily subject to the 13.5% rate) until 31 October 2024.
VAT zero rate and exempt from VAT
Supply of goods dispatched from Ireland to a VAT-registered person in another EU member state, goods exported from Ireland to a place outside of the European Union, the supply of certain food and drink, oral medicines, books and newspapers, children’s clothing and footwear, E-books and audiobooks, supply and installation of solar panels on buildings. The exempt categories include: postal services, medical and related services, education, and national broadcasting, financial services (e.g. certain banking services), insurance services, betting/gambling services, the letting of immovable goods, and, by way of an Irish derogation from EU law, passenger transport services.
Corporate income tax
Standard rate on income 'trading rate': 12,5%; Higher rate on income 'passive rate': 25%; Capital gains rate: 33%
Dividend tax
25%
Fringe benefit tax
N/A
The contribution to the mandatory funded pension
N/A
Social security contributions
11.05% and these are an allowable deduction for corporation tax purposes.
Personal Taxes are available to you view HERE,
