Dividend taxation: what to consider before profits distribution
Tax advisoryDividend taxation in Estonia from 2025: when and how to distribute dividends and when tax-free redistribution is possible.
The risk awareness of Grant Thornton’s tax advisers help to limit the tax risks arising in the course of business activities, both with respect to completed transactions and planned transactions.
Taxation is a highly specific and complicated area, often leading to debates between legislators and those implementing the law. Our primary objective is to prevent potential tax disputes, which is best achieved by being involved in earliest possible stages.
We submit justified petitions and motivated applications for approval to the tax authority as well as the Ministry of Finance in matters where the current administrative practice lacks clarity or proves to be non-existent. We formulate an opinion based on the client’s interests and, where necessary, defend our positions before the tax authority or the Ministry of Finance.
The diversity of opinion and staff dynamics of the tax authority does not provide the best of guarantees regarding future validity of the official position presented to the taxpayer. To ensure legal certainty in important matters, we advise clients to request a preliminary decision from the tax authority. We help our clients to carry out the formalities and verbalize the arguments in a way which leads to substantive response to the enquiry.
By nature, tax proceedings are encumbering for the taxpayer. Unless the taxpayer is well-informed of their rights and obligations, we recommend contacting experts who address these matters on daily basis. Our tax advisers and lawyers advise clients in all matters from the initiation of the audit until court proceedings. To prevent frequent audits it can be wiser to order special-purpose tax audit that allows to identify the systematic problems, and to work out a preventive solution. This serves to ensure quick and efficient communication with the tax authority in case of an audit, as well as save valuable time, cut tax costs and prevent interest on tax arrears.
The involvement of our tax advisers in the very early stages of the tax audit allows to monitor that the tax authority implements the law correctly and guarantee that client’s rights are exercised in the tax proceedings. To ensure the best service, we keep an eye on the tax proceedings, and submit our justified claims and dissenting opinions, if necessary. In addition, we advise the revision of the tax declarations and accounting.
Our tax advisers aim for the tax disputes to never reach court and settle the disputes during challenge proceedings. Where the matter needs to be taken to court, we have sufficient preparation and capacity to represent our customers, even before the Supreme Court, with partner attorneys involved, where necessary.
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Dividend taxation in Estonia from 2025: when and how to distribute dividends and when tax-free redistribution is possible.
From 16 February, the filing of 2025 income tax returns begins. As usual, a tax return must be filed if, during the year, you received income on which Estonian income tax was not withheld, or if you wish to claim tax reliefs.
The year 2026 will bring several significant tax changes across the Baltic States, affecting both businesses and individuals. In this overview, Grant Thornton Baltic tax experts summarise the key tax developments in Estonia, Latvia and Lithuania – covering income tax, VAT, social taxes and excise duties, among others.