Quick guide to upcoming tax updates for e-resident founders
Why Estonia?
The "Silicon Valley of Europe"For the 11th year in a row ;) - Innovative & Capitalized Start-up Ecosystem
Even with upcoming changes, Estonia remains the prime destination for digital business thanks to:
#1 in International Tax Competitiveness
0% tax on reinvested profits
100% digital operations
Direct EU market access
Home to 13 unicorns (2 from e-residents!)
Europe's most innovative startup ecosystem
Tax Changes Summary 2024-2026
The Short Story
Estonia will go through some important Tax changes. Why? They need to balance their books and boost defense spending. But don't worry - the good stuff, 0% Corporate Income Tax on reinvested profits, isn't going anywhere.
What's Actually Changing?
VAT Bump
Now: 22%
Starting from 01.07.2025: 24%
Impact: Mostly affects those selling to Estonian customers and buying from Estonian companies
Dividend Tax Update
Now: 22% (Gross) - Net (25%)
2025: 24% (Gross) - 28.7% Net
Good news: 0% on reinvested profits stays
The Plot Twist: New Security Fee
2% annual tax on profits
Applies whether you distribute or not
Calculated on a quarterly basis
Beyond Tax: Estonia's Business Advantages
Innovation & I.T. Hub
Entrepreneurial Mindset
Investor's Paradise
Low Operating Costs
e-Residency Benefits
Access to European Markets
Budget Reality Check
Current situation:
Revenue: €16.8B
Spending: €17.7B
Deficit: €1.7B
Defense: €1.3B (9% of budget)
What This Means for You
0% reinvestment tax stays - keep growing
Plan for VAT changes if selling in Estonia
Think ahead about profit distribution
Consider timing for major business moves
Need help planning around these changes? Let's talk strategy.
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