Treasury tax advisor Erle Kõomets said the US, EU and other EU member states are pressing for Estonia to change its mind on the deal and join the program with a minimum tax rate of 15 percent.
The change would affect around 200-300 international companies with offices in Estonia. “It is very important for the US that this treaty works and that it does as much as possible as it is going through several internal tax changes. They want to raise taxes and complete all tax avoidance options. And if all countries, or at least as many as possible , joining the project now, it would make things a lot easier for them, “said Kõomets.
The companies concerned are exempt from income tax on the basis of the retained profits. On Monday, Prime Minister Kaja Kallas (Reform) spoke to US Security Advisor Jake Sullivan about economic cooperation. Kallas said the Estonian tax system could remain unchanged.
“The advantage of our system is that our tax system is simple and transparent. And we actually levy corporate tax, we are not a tax haven, everyone understands that, but we have different rules. And we are discussing how we can maintain the system, “said the Prime Minister.” We will go and discuss it in order to find a compromise that is suitable for everyone.
There is currently no corporate income tax in Estonia on retained and reinvested profits and a 14-20 percent tax on distributed profits.
Nine other countries, including Hungary and Ireland, do not support the OECD’s global minimum income through corporate income tax, which provides a tax rate of 15 percent. A final agreement is expected to be reached in October when the G20 countries meet.
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