Many US business owners and entrepreneurs have found ways to avoid paying
America’s whopping 35% corporate tax on undistributed earnings.
Countries like Estonia provide savvy businessmen and businesswomen with
a way to escape that steep tax and reinvest their income into their business.
Estonian corporations pay zero corporate income tax on reinvested earnings.
Meaning, you can reinvest any profits you make and not have to pay any
taxes to the Estonian government. You do have to pay taxes on dividends
(and payments considered equivalent to dividends like gifts, donations,
and fringe benefits to employees) but Estonia operates on a flat tax basis of 21%.
This allows for profits to be moved tax-free within a corporation via interest,
royalties and other non-dividend payments; which can lead to further deductions
for non-Estonian foreign companies while also creating untaxed inclusions
for Estonia. Also important to note is that the corporation itself is
taxed and not the shareholders. Meaning the tax cannot be reduced pursuant
to the EU parent-subsidiary directive or an income tax treaty that Estonia
is party to.
Additionally, non-residents of Estonia are not required to pay withholding
tax to the government, meaning you could structure your Estonian corporation
like a holding company and save more money. Couple that with Estonia’s
dual tax treaties with countries like the US and you could end up with
very reasonable tax rates.
We Can Help Reduce Your Tax Bill
Creating international tax structures like we mentioned above can result
in a great deal of tax savings but they are not easy to set up, manage
and maintain. Our firm has extensive knowledge handling international
tax law. We are deeply invested in providing top-notch legal and tax planning
services for private companies and entrepreneurs.
With offices in Miami, Dallas, Orlando and DC as well as partner firms
in more than 130 countries around the globe, you can rest assured we’ll
always have an attorney ready to advise you.
Call today to schedule a