For the seventh consecutive year, Estonia has been awarded the highest tax system rating by the OECD (Organization for Economic Cooperation and Development).

This high rating is due to four main advantages offered by the Estonian tax system:

1. An Estonian company does not pay tax on profits until the dividend is paid. In fact, if a company does not distribute profits in the form of dividends, the income tax for such a company is 0%.

2. The fixed rate of personal income tax is 20%. At the same time, dividends received from an Estonian company are not subject to personal income tax.

3. Land tax is deducted from the calculation of the value of the land. Land tax does not include property or capital value.

4. Estonia has 58 valid double taxation treaties.

The Estonian tax system differs from the tax systems of many leading countries, which receive high marks from the OECD due to the clear regulation of certain areas and aspects of taxation. The Estonian tax system, in turn, has a positive assessment by the OECD due to its uniqueness and high competitiveness. As a result, Estonia has been ranked 1st in the ranking of competitiveness of tax systems for the seventh consecutive year.

For taxation of company profits in Estonia, see our article "Income tax 0%".

The following advantages of the Estonian tax system can be distinguished, which determine its high competitiveness:

• The system, in which the income tax on the company's income is levied only on the distribution of profits in the form of dividends, allows the company's profits to be reinvested without additional tax burden.
• Taxation on value added tax (0%) is unified with EU norms and allows a 0% tax rate to be applied for intra-EU turnover.
• Land tax is levied on the value of land, not the value of real estate

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