Baltic tax rates from 1 January 2021

	Estonia	Latvia	Lithuania
Corporate income tax (CIT) rate	CIT is payable upon profit distributions (the deemed profit distribution). CIT rate is 20%, calculated as 20/80 from taxable net payment. Regularly paid dividends are subject to a reduced rate of 14% (14/86 from net dividends).	CIT is payable upon profit distributions (the deemed profit distribution). CIT rate is 20%, calculated as 20/80 from taxable net payment.	CIT is calculated as follows: Total income – non taxable income – allowed deductions – limited deductions = taxable profit. Standard CIT rate is 15%. 20% CIT rate is applicable to credit institutions. 0% and 5% rates may be applied under certain conditions.
Withholding tax rates:
Dividends	20% or 14%[1]	0% or 20%/10%, reduced rates may be applied according to DDT	0% or 15%, reduced rates may be applied according to Double Treaty Taxation (DTT)
Interest	20% to residents or N/A for non-residents	0% or 20%/10%, reduced rates may be applied according to DDT	0% or 10%
Royalties	20% to residents, 10% to non-residents or N/A, in case the exemption applies	N/A	0% or 10%
Management/ consulting fee	20%	20%, exemption may be applied according to DDT	N/A
alienation of immovable property	20%	3%	15%
Rent/lease of real estate income	20%	5%	15%
Wage taxes:
Minimum monthly salary	EUR 584	EUR 500	EUR 642
PIT rates	- 20%; - Monthly basic exemption- EUR 500[2].	- 20% rate on annual income up to EUR 20,004; - 23% rate on annual income exceeding EUR 20,004 to EUR 62,800; - 31% rate on annual income exceeding EUR 62,800.	- 15% rate is applicable for sickness pay - 20% rate on annual income - 32% rate on annual income
Social security tax rates:
Employee rate	- 1.6% unemployment insurance premium; - 2% funded pension contribution (if the person as joined 2nd pillar.	10.50%	Employee’s social security contributions - 19,5%, Participation of employee in pension scheme (optional) - 2,4-3%.
Employer rate	- 33% social tax (the minimum monthly obligation for social tax is 584 EUR, it means, for an employer, the minimum obligation for social tax is 192,72EUR monthly); - 0.8% unemployment insurance premium.	23.59%	1.61-3.75%
Solidarity tax	N/A	25 % from income exceeding EUR 62,800	N/A
Value-added tax
Value added tax rates	20%, 9% and 0%	21%, 12% and 5%	21%, 9% 5% and 0%. Compensational rate for farmers is 6%.
VAT registration thresholds	EUR 40,000	EUR 40,000	EUR 45,000
Annual EU distance selling thresholds	EUR 35,000	EUR 10,000	EUR 35,000
Intrastat reporting
Arrivals	EUR 230,000	EUR 230,000	EUR 250,000
Dispatches	EUR 130,000	EUR 120,000	EUR 150,000

[1] Regularly paid dividends are subject to a discount rate of 14/86. Please note: if the payment is made to a private person, income tax of 7% is charged on dividends.

The income tax withheld can be 5% or 0% (depending on the tax agreement) in the case of a non-resident shareholder.

[2] The annual basic exemption is up to 6,000 EUR (500 EUR per month). If a person’s annual income is up to 14,400 EUR, they can use the exemption in full. If the annual income is between 14,400 to 25,200 EUR, the amount of the basic exemption is reduced pursuant to the following formula: 6,000 – 6,000 / 10,800 × (amount of income – 14,400).

Tallinn, Estonia
Leinonen OÜ
Põhja pst. 25
10415
+ 372 6117 700 contact@leinonen.ee

Riga, Latvia
Leinonen SIA
Vilandes iela 3 LV1010
+ 371 6732 3901 leinonen@leinonen.lv

Vilnius, Lithuania
Leinonen UAB
Vilnius, Labdariu
5 01120
+ 370 5237 5040 leinonen@leinonen.lt

02.02.21

Accounting, Payroll, Tax & Legal since 1989

Baltic tax rates from 1 January 2021

Baltic tax rates from 1 January 2021 - 02.02.21

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Tax news for 2021 - 13.01.21

State aid to business due to covid-19 /03.12.2020./ - 03.12.20

Author:

Inga Jomanta

Līga Treilone

Introduction to Estonia