Visiting Researcher's Guide - EURAXESS Estonia

TAXATION
Estonians love paying taxes or at least they love submitting their income tax returns. In 2007, about 20%
of the expected income tax returns were submitted already within the first two days of submitting the
income tax returns. The Tax and Customs Board returned in 2007 600 million kroons already within
two weeks, by the end of February. The easiness of submitting the e-returns and the Tax and Customs
Board’s quickness in processing them has made the income tax return a hit, which demands the maximum
from the web servers. After all, why should not it be so, when it is possible to get refunds already within a
week with minimal personal effort?
5.1 Determination of the country of residence
A key element for all your taxation issues is to work out whether you are
an Estonian resident or non-resident for tax purposes. Residency rules
can be quite complicated so please read with care. Before coming to
Estonia, we advise to ask from your local tax authority a certiciate proving
your previous status as tax payer. This comes handy especially in
case your home country has a bilateral tax treaty with Estonia and you
are subject to certain benefits.
It is important to remember that your status of residence must be certified
by the Estonian Tax and Customs Board. The decision will be made
upon your application that you should file after arriving Estonia.
Determining the place of residence is based on a number of conditions.
Firstly, it is of importance, whether your home country has an effective
bilateral tax treaty with Estonia. If yes, then it is considered whether:
1) You stay in Estonia less than 183 days within 12 month period; and
2) You receive income from sources outside of Estonia; and
3) Your employer does not have a permanent establishment here to
conduct business in Estonia
If the answer to these questions is yes, then you will probably be
considered resident of the other contracting country, your income
will be taxable only in you home country and you do not have to pay
taxes in Estonia. Treaties may also prescribe other conditions for the
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