E-Residency and Taxation

The term e-residency describes the service offered by the state to citizens of other countries inside or outside the European Union, which enables them to operate in Estonia and reap the benefits of access to the European market. In other words, it is a web portal to the European market for all the citizens of the world. This is achieved through the special edition of the Estonian identity card for e-residency.

The benefits for Estonia e-residency come from taxes paid by companies that want to take advantage of access to the European market.

The e-residence ID,
– does NOT offer free entry into the country
– It is NOT a tax residence
– It is NOT a travel document

Tax Information:
– 20% fixed income tax rate for individuals and companies

Profits reinvested have a zero tax rate.

– The profits are distributed to the shareholders during the tax filing period. All distributed profits are subject to taxation at a rate of 20%.

– The VAT is 20%.

– Employer contributions are 33% of the employee’s salary. These are analysed as follows:
20% social tax and 13% health tax.

Digital services

The whole system (Social, Educational, Economic / Business, Tax) in Estonia is based on the identity card issued by the state which has a chip which is used as a key that unlocks the citizen’s participation in the above activities.

Indicatively, it is stated that, by using the identity card, the citizen can communicate via the internet with the state services or other fellow citizens from anywhere in the world. You can also:

– File a tax return
– Vote
– Open a company within 15 ‘
– Sign documents and contracts
– Encrypt texts for secure transmission

Contact our team for e-residency for Estonian companies of all kinds.