Estonia: Updated tax rate on dividends paid to individuals in 2025
LuxCSD1 informs clients that effective
1 January 2025
the corporate income tax rate of 14% applicable to regular profit distributions at the distributor level will no longer be applicable and all profit distributions will be subject to 22% corporate income tax at the distributor level, impacting the applicable tax on dividends.
Impact on clients
As of the effective date neither legal entities nor individuals will be subject to any additional withholding tax on dividends.
As an exception to the above, dividends paid by an Estonian company as of 1 January 2025 will remain subject to a 7% withholding tax in relation to individual beneficial owners if:
- Such dividends are derived from the distributing company’s subsidiary dividends; and
- the underlying profits were subject to taxation at the lower corporate income tax rate of 14% by 31 December 2024.
Beneficial owners who are subject to the exceptional process described above may use the tax services currently offered by LuxCSD to seek a reimbursement.
Further information
For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.
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1. LuxCSD refers to LuxCSD with registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg and registered with the Luxembourg Trade and Companies Register under number B-154449