Estonia: Increase of withholding tax for certain dividend distributions

04.01.2019

Clearstream Banking1 informs customers that effective

1 January 2019

and following the previous adoption of the Tax Law by the Estonian Parliament in 2017, the tax rates for Estonian dividend distributions have been amended as follows:

  • The standard rate of withholding tax on dividend distributions has increased from 0% to 7%, if the dividend is paid from an Estonian company subject to the lower corporate income tax rate of 14%. 
  • Other dividend distributions will continue to be subject to 0%.

For taxable dividend distributions, it is foreseen that relief at source will be available for beneficial owners that are either:

  • Legal entities (such entities will remain eligible for the 0% withholding tax rate); and
  • Individuals eligible for a reduced tax rate according to a Double Taxation Treaty.

The operational procedure, including the exact documentation requirements for relief at source is still to be clarified.

We continue to monitor the information available in the market and will provide more information, as it becomes available.

Further information

For further information, customers may contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or their Relationship Officer.

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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.