Estonia entered into tax treaties with Denmark, Finland, Norway and Sweden, which took effect on January 1, 1994. Tax treaties with the Czech Republic, Poland and the United Kingdom took effect on January 1, 1995.

Under these treaties, dividends may be taxed in Estonia. However, the Estonian tax law does not impose tax on dividends paid by Estonian companies. The withholding rate for interest under the treaties is 10%. The withholding rate is 5% for royalties for the use of industrial, commercial or scientific equipment. For other royalties, the rate is 10%. The withholding rate for rent is 5%.

For further information please contact Tonis Jakob, tax lawyer, Ernst & Young, telephone + 372 6 310 612, fax +372 6 310 611 Ernst & Young Eesti AS - Harju 6, EE 0001, Tallinn, Estonia, or enter a text search 'Ernst & Young' and 'Business Monitor'.

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