The tax rate on retained earnings is 0%. This absence of income tax can be very advantageous for those companies that use the income earned not to make payments to natural persons, but to invest it in the future development of their business.
The biggest difference from other European countries is that in Estonia this tax-free method on reinvested earnings applies to all sectors of the economy, not just to individual sectors.
In addition, a good advantage of doing business in Estonia is that Estonian company has a possibility to acquire ownership of vehicles and real estate without any taxes.
In addition, as for the tax system in Estonia, it is clear and transparent without progressive taxes, which increase tax rates as the taxable base grows.
At the same time, Estonia has concluded international agreements on the avoidance of double taxation with 59 countries, which can also confirm the transparent and simple tax system in Estonia.
Thus, this tax-free condition of receiving retained earnings is an example, which attracts investors from all countries to establish their companies in Estonia without any violation of the law or loss of finances.