Overview of Estonia's Double Taxation Treaties
Estonia has established a network of double taxation agreements (DTAs) with various countries to prevent the same income from being taxed in multiple jurisdictions. These treaties aim to promote international trade and investment by providing clarity on tax obligations for individuals and businesses operating across borders.
Key Features:
Elimination of Double Taxation: DTAs typically allow for tax relief through exemptions or reductions in tax rates on income types such as dividends, interest, and royalties.
Residence and Source Principles: The treaties usually clarify taxpayers' residences and determine which country has the right to tax specific types of income, thus reducing uncertainty.
Exchange of Information: Estonia's tax treaties often include provisions for exchanging information between tax authorities, enhancing transparency and cooperation in combating tax evasion.
Stability and Predictability: Estonia's established treaties provide a stable tax environment that can attract foreign investment, as businesses can better predict their tax liabilities.
Countries Involved: Estonia has signed DTAs with numerous countries, including major partners Germany, the United States, and the United Kingdom. List of Double Taxation Agreements
OECD Model: Many of Estonia's tax treaties are based on the OECD Model Tax Convention, which serves as a framework for negotiating and drafting DTAs.