Estonia attracts entrepreneurs from all over the world with a tax system that is profitable for business. Despite the fact, that there is no corporate income tax for Estonian companies, Estonia is not an offshore! Estonian companies must present accounting reports in due time.

An important advantage when choosing a jurisdiction for setting up a company and doing business, is the absence of the income tax for Estonian company, until they distribute profits. This legal norm indirectly implies that there is no fiscal policy from the tax organs of the Estonian Republic.

Faulty information regarding the state legislation and the lack of an experienced accountant may result in a fine for failing to provide reports and declarations in time.


If the company fails to pay taxes, the following measures may be used against it:

· Increased attention from the state organs;

· Tax review from the Estonian Tax and Customs board;

· Fines and interest from unpaid tax sum;

· Prison sentence for the management board member of the company (if the tax debt exceeds 35 000 euros).



Who is held responsible for failing to pay taxes?

The member of the management board of the company bears responsibility for failing to pay taxes.
Often there is more than one board member in the company, who bear joint responsibility. You as the owner of the company or as a second board member should control and know what the company is doing, make sure the accounting reports are presented and taxes are paid on time.

What happens to taxes if the company is liquidated?

If an Estonian company is liquidated prior to the start of the tax proceedings, then the situation forms, where there is no option to hold the legal person responsible and demand payment of the debt from it, as the company no longer exists. In such an event, the member of the management board of the company may be held responsible.

What are the consequences of failing to pay taxes?

If the there is a tax debt a fine may be issued. For failing to pay the taxes on time an interest is levied in the amount of 0,06% for every day of delay. If the tax debt exceeds 35 000 euros, those responsible may be charged under the criminal law, if the connection between the tax debt and the members of the management board will be proven. In other words if the guilt will be proven. It crime may be performed due to intent, but also due to negligence.

A fine or prison sentence up to 5 years may be used as punishment.

About the principles of accounting in Estonian companies you can learn from "Accounting of the Estonian company a 100% ONLINE"


In order to avoid negative consequences and for managing the accounting correctly and professionally, you should use the services of experiences specialists.