Payment of a salary to the management board member
Payment of a slary to the management board member who works on the basis of a board member agreement of an Estonian company.
Member of the management board – is a position in the company set by the active legislation. Member of the board provides services to the company on the basis of board member agreement (type of a services provision agreement). The board member agreement is not an employment agreement.
Board member is a resident of Estonia
If the Board member is a resident of Estonia and carries out his obligations in Estonia, then when paying the salary the income tax in the amount of 20% is withheld. Also the social tax is paid in Estonia and payment to the first pension stage. Should be noted that no unemployment insurance rate is paid from the salary of a board member.
Board member non-resident of Estonia
In accordance with the active legislation of Estonia the income tax is levied from income of non-resident that he receives as a member of the management board of an Estonian company. The social tax is also paid.