Estonia allows for full expensing of capital investment. Not only does Estonia have relatively low tax rates, it also provides an example of a neutrally structured tax system that does not discourage saving and investment.Įstonia Has a Neutral Business Tax Systemįor its corporate tax, it all starts with the correct tax base. It ranks first in both corporate taxes and property taxes, second in income taxes, eighth in consumption taxes and eleventh in international tax rules. Overall, Estonia scores highly in each of the five categories in the index. Key drivers for Estonia’s high rank are its relatively low corporate tax rate at 21 percent with no double taxation of dividend income, a nearly flat 21 percent income tax rate, a property tax that only taxes the value of land and not the value of building and structures, and a territorial tax system that exempts 100 percent of foreign profits. According to this year’s International Tax Competitiveness Index, Estonia has the most competitive tax system in the developed world.
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