Estonia: Corporate Tax

On 1 January 2009, the transition period granted to Estonia for harmonising the Income Tax Act with the EU Parent-Subsidiary Directive will come to an end.

Estonian Legal Developments

According to Article 4 of the EU Parent-Subsidiary Directive (90/435/EC) on the common system of taxation applicable to parent companies and subsidiaries of different EU member states, member states must: (i) refrain from taxing (ie, the exemption method); or (ii) authorize the parent company to deduct from the amount of tax the amount of corporation tax paid by the subsidiary (ie, the credit method).