Estonia Corporate Income Tax
Detailed corporate income tax rates and rules for Estonia in 2026.
Estonia's unique corporate tax system taxes profits only upon distribution. Retained and reinvested profits are tax-free, creating a strong incentive for business growth. When profits are distributed as dividends, the tax is 20/80 (20% on the gross distribution, equivalent to 25% on the net dividend). Regular dividend distributions benefit from a reduced rate of 14/86 (approximately 14% on the gross amount).
Standard Rate
20%
Small Business Rate
14%
Additional Notes
Estonia's distribution-based corporate tax model has been studied and partially adopted by other countries (e.g., Latvia, Georgia, and Poland's Estonian CIT option). The reduced 14% rate applies to distributions up to the average of the prior 3 years' taxed distributions, encouraging consistent dividend policies. Estonia does not have local or municipal corporate taxes. The system significantly simplifies corporate tax compliance.
How Estonia Corporate Tax compares
Estonia’s corporate tax rate of 20% is the 127th highest of 203 countries TaxAtlas tracks, below the global average of 22.2% and Europe’s regional average of 19%.
