How do I distribute profit / receive remuneration from my Estonian company?
If you are an owner and a board member of an Estonian company, you can receive
payments from your company in form of a salary, board member remuneration,
dividends or a combination of these.
Your salary is taxed in the country where you perform your duties and where you are
a tax resident. If you do not perform your duties in Estonia, the payroll taxes are presumably not due in Estonia. In such case the Estonian company has to maintain documents that the salary is subject to payroll taxes abroad.
If you receive remuneration as a member of the management board of an Estonian
company, the fee will be subject to withholding income tax in Estonia at the rate of 20%. This is applicable also if you are not performing your duties in Estonia. You should consult a tax advisor in your home country if such income is subject to taxation over there.
Paid dividends are subject to corporate income tax (CIT). Please see here the
calculation of CIT cost.
The company is not obliged to pay a salary or a board member remuneration to a
member of the management board.
As of 2019 the dividend payment tax rate is 14% on the average regular dividend payments of the last 3 years if the recipient of the dividends is a legal person.
If the legal person who received these lower rate dividends is paying out the received payments to its owners who are physical persons in Estonia, there will be an additional 7% income tax withheld. If the legal person who received these lower rate dividends is a non-Estonian company, the income tax rate is 14% and there is no additional tax on forwarding those dividends as this is then outside Estonian jurisdiction.