Taxation of licence fees (intellectual) property in Estonia
Under the Income Tax Act, income tax is imposed on payments for using copyrighted intellectual property*, such as royalties. When a company in Estonia pays a royalty, it generally needs to withhold a license fee.
The usual rate for withholding tax on license fees is 10% unless a tax treaty provides a more favorable rate for cross-border transactions. In cross-border transactions, it's essential to verify if Estonia has a tax treaty with the country in question.
Tax treaties are designed to prevent double taxation, so if Estonia has a treaty with the payment recipient, that treaty should be applied.
You can find the list of tax treaties concluded with Estonia at this link: Link.
* literary, artistic or scientific work, including cinematographic films or videos, recordings of radio or television programs or computer programs.