{"id":26985,"date":"2020-07-10T01:24:44","date_gmt":"2020-07-09T23:24:44","guid":{"rendered":"https:\/\/www.thompsonstein.com\/?p=26985"},"modified":"2026-01-29T14:50:30","modified_gmt":"2026-01-29T13:50:30","slug":"the-taxation-rules-of-a-dividend-from-an-estonian-company","status":"publish","type":"post","link":"https:\/\/www.thompsonstein.com\/en\/the-taxation-rules-of-a-dividend-from-an-estonian-company\/","title":{"rendered":"The taxation rules of a dividend from an Estonian company"},"content":{"rendered":"

How to calculate the value of CIT on dividends?<\/strong><\/h2>\n

One of the possibilities of paying out the profit achieved by an Estonian company<\/a> is the payment of dividends. As a rule, the dividend payment generates 20% CIT on the gross amount, which corresponds to 25% on the net amount. Taxation of the dividend is expressed by a ratio of 20\/80 of the paid out amount. The tax due can be calculated using two alternative methods.<\/p>\n

The tax amount calculated during the distribution of the entire profit generated by the company<\/strong><\/h2>\n

\u00a0<\/strong>If we want to pay out the entire profit generated by an Estonian company in a given tax year, the process is straightforward as we can apply the 20% CIT rate. For example, if a company has made a profit of 100,000 euros (i.e. gross dividends), multiplying the profit by 20% CIT, we get 20,000 euros of tax to pay. In such case, the net dividend, i.e. the amount we can pay out, will be the difference between the amount of profit achieved and the amount of tax, i.e. 80,000 euros.<\/p>\n