Estonia has a so called black list of low tax territories. The tax authority in Estonia will check the business in cases where another party of business transaction is located in one of these countries. It is recommended to give a price list beforehand to the tax authorities.
When one conducts business possibly connected to these territories on
the black list the taxpayer must prove that the other party is not located in
one of these countries. Good evidence for tax authorities is a certificate
issued by local tax authority regarding the size and burden of taxes.
A legal person (company) is not seen to be located in a low tax rate territory if more than 50 per cent of its annual income is derived from actual economic activity or if the state or territory of location of the legal person provides the Estonian tax authority with information concerning the income of a person controlled by Estonian residents.
Income tax in Estonia
Income tax is charged on the income of a legal person located in a low tax rate territory (and controlled by Estonian residents). It is irrespective of whether the legal person has distributed any profits to taxpayers or not.
Income tax is charged on business income derived by a non-resident in Estonia. If the non-resident is a legal person located in a low tax rate territory of the black list, income tax is charged on all income derived by the non-resident from the provision of services to Estonian residents, irrespective of where the services were provided or used. Income tax is withheld from payments to a legal person located in a low tax rate territory for services provided to an Estonian resident.
Estonian companies
Resident companies must pay income tax on payments which are not related to business, unless in situations where income tax has been withheld on such payments pursuant to § 41 (e.g. salaries, royalties etc.) or paid pursuant to §§ 48–51 (e.g. fringe, donations benefits, gifts, expenses not related to business and dividends) of the Income Tax Act.
Black list of Estonia
1.
Anguilla
2.
Antigua and Barbuda
3. Aruba
4.
Bahamas
5.
Barbados
6.
Belize
7.
Bermuda
8.
British Virgin Islands
9.
Brunei Darussalam
10.
Cooks Islands
11.
Cayman Islands
12.
Commonwealth of Dominica
13.
French Polynesia
14.
Gibraltar
15. Guam
16.
Guernsey
17.
Grenada
18. Hong Kong
19. Jamaica
20. Qatar
21. Labuan
22. Macao
23.
Montserrat
24.
Netherlands Antilles
25. New
Caledonia
26. Niue
27.
Oriental Republic of Uruguay
28. Oman
29.
Puerto Rico
30.
Republic of Mauritius
31.
Republic of San Marino
32.
Republic of Venezuela
33.
Saint Kitts and Nevis
34.
Saint Vincent and the Grenadines
35. St.
Lucia
36. The
Principality of Andorra
37. The
Principality of Liechtenstein
38. The
Principality of Monaco
39. The
Republic of Chile
40. The
Republic of Costa Rica
41. The
Republic of Djibouti
42. The
Republic of Guatemala
43. The
Republic of Kenya
44. The
Republic of Lebanon
45. The
Republic of Liberia
46. The
Republic of Maldives
47. The
Republic of Nauru
48. The
Republic of Panama
49. The
Republic of Philippines
50. The
Republic of Seychelles
51. The
Republic of the Marshall Islands
52. The
Republic of Vanuatu
53. The
State of Kuwait
54.
Turks and Caicos Islands
55.
Virgin Islands (US)