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If you receive dividends from your company, the corporate income tax is paid in Estonia. The rate is 20% (22% from Jan 1, 2025), calculated as 20/80 (22/78 from Jan 1, 2025) from the net payment you receive. We presume that you personally do not use basic tax exemption related to your salary on a regular basis. The tax authorities calculate the basic tax exemption from your total income when you submit a personal income tax return.

The tax rate for regularly paid (paid out each year) dividends is 14%, calculated as 14/86 from the net payment you receive. Companies that distribute profit and pay 14% CIT on it are additionally obliged to withhold income tax of 7% from dividends paid to a natural person. From Jan 1, 2025, the regularly paid dividends will be taxed only at a rate of 22/78.

The corporate income tax on the distributed profit is paid in Estonia based on the actual dividend payments, not the "decided" payments. For example, if the shareholders decide to distribute €5 000 in March, but pay out only €1 000 in April, only €1 000 is reported to the Estonian tax authorities, and the corporate income tax of 20/80 (€250 in this case) has to be paid to the Estonian tax authorities in May (the next month).