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  1. FAQ
  2. Salaries & Dividends
  3. Receiving funds when operating in Estonia

What are the taxes on dividends?

Last updated: August 19, 2023

If you receive dividends from your company, the corporate income tax is paid in Estonia. The rate is 20%, calculated as 20/80 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 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.

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).

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