In an ever-globalizing world, employers must pay special attention to the taxation issues of cross-border employees.

Employment contracts need to be analysed in order to determine the country of residence for taxation purposes. In addition to the fixed-term contracts concluded for service in a foreign country, employers frequently need to address issues related to the taxation of various business trips. 

  • Comprehensive advice on wage accounting, social insurance and personal income tax
  • Evaluation of the risk of taxation of outbound business trips and employment relations in the country of origin as well as the country of destination: both from the employer’s and the employee’s perspective
  • Global mobility services: both from the Estonian employer’s and the non-resident employee’s perspective
  • Ascertainment of the tax residence and performance of the required registration procedures

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Despite the fact that the Estonian law does not provide a definition of a short-term or long-term business trip, the duration of the business trip must be taken into consideration for the purposes of both income tax and social tax.

  • When should the employer apply for form A1 from the Social Insurance Board?
  • When does the employee’s tax residence change and how to appropriately account for this change?
  • How to calculate taxes on wages paid to employees sent to long-term business trips?
  • Which corporate income tax risks are involved in long-term business trips and an existing employment contract?
  • Which tax liabilities and tax incentives are applied to employees serving in a foreign country?

Our knowledge and experience, along with the international partner network, serve to provide the Estonian employer and his or her Estonian employees in both Estonia and the country of service with a sense of security with respect to tax liabilities and deadlines, without bearing an excessive tax burden.

The issues related to the taxation of expatriate employees are equally important:

  • When should an expatriate employer register as a taxpayer in Estonia? How to compensate for the costs borne by the expatriate employee?
  • Which additional registrations are required for an expatriate employee in Estonia?

We aim at providing comprehensive support in ensuring compliance with the requirements established for employees working in Estonia, foreign residents earning income in Estonia, and their Estonian employers.

The tax and legal advisers of Grant Thornton are at your service in all of these matters, and will provide assistance in any other issues that may arise with respect to cross-border employees.

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