Pursuant to Subsection 55 (2) of the Income Tax Act, a non-resident legal entity that has a permanent establishment in Estonia (§ 7) is required to submit a signed copy of the annual report of its permanent establishment to the Tax and Customs Board within six months of the end of the financial year. Pursuant to Subsection 57 (3) of the Taxation Act, the keeping of accounts and accounting for taxation purposes shall be organised in a manner that enables an overview to be obtained within a reasonable period of time of the conduct of transactions and of facts relevant for taxation purposes.
Although the accounting rules of permanent establishments have not been separately stipulated, a non-resident must keep the permanent establishment's accounting for taxation purposes in a manner that makes it possible to obtain within a reasonable time an overview of the expenses incurred, revenues earned and the assets and liabilities of the permanent establishment situated in Estonia. The report usually contains a management report, balance sheet and income statement. Having the report audited is not required.
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