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New Government to Decrease Company Income Tax on Regular Dividends, Implement Zero Bureaucracy Policy, Sell Minority Shares of State Companies

24.11.2016

New Govenment Assumed Office

Photo by Govenment Communication Unit

 

On November 23 Estonia’s new Government led by Prime Minister Jüri Ratas assumed office.


The main objectives of the Government include a foreign and security policy that maintains the alliance of the European Union and NATO, a more unified and equal Estonia as well as reversing the decrease of Estonian population.

According to the Basic Principles of the Government Coalition, the new government’s economic policy is aimed at increasing Estonia’s competitiveness. To do so, state investments will be increased, more people will be fostered to participate in the labour market and contributions will be made to improve their skills.

The Document states that the new government is planning to ’guarantee a competitive taxation and regulation environment for the significant and potentially growing industrial and service sectors of the Estonian economy, including the adoption of an ICT sector development programme and conditions for freight ships to sail under the Estonian flag.’

The new government is planning to decrease company income tax to 14% instead of the present 20% on regular dividends paid to legal persons.

Refunding of labour taxes or a tax credit to temporarily decrease the labour tax burden of starting and quickly growing companies will be implemented and laws regulating labour taxes will be renewed on the basis of the changed nature of employment relations, such as remote working, workforce “renting”, having multiple jobs,and the sharing economy.

„Our economy must make it easy to start a company and also offer better growth opportunities for enterprises,“ the Document states.

A zero bureaucracy programme will be implemented, creating a bureaucracy-free form of entrepreneurship for small businesses. The plan includes creating an entrepreneurship account for the sale of goods and services to physical persons or for selling goods to legal persons in the amount of up to €25,000 per year without any bureaucracy. Also, the taxation and reporting procedures for self-employed persons will be simplified.

Minority shares of Tallinna Sadam (The Port of Tallinn) and the energy company Eesti Energia will be released to the stock market.

Read more from the Basic Principles of the Government Coalition.

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