Employment register brings additional 10 mEUR annually

According to Tax Board estimates, the new staff register, which requires the registration of all employees before they begin work, will bring in an additional 10 million euros in tax revenue each year.

The register should affect the construction and catering sectors the most, Postimees reported, as the percentage of staff being paid in cash under the table is 43 and 14 percent, respectively.

The actual process of registration has been streamlined, as companies only need a few minutes to register a new staff member and that registration must now only be made at the Tax Board, previously employees had to be registered at a number of state institutions, including the Health Board.

Before the new requirement entered force on July 1, companies had more time to register employees and would only make staff official after crackdowns. The Tax Board often found many employees officially on their first day at work, although they had been working for the company for months.

Source: ERR News

Estonia joins the EU-wide insolvency registry

The European Commission launched a EU-wide interconnection of national insolvency registers, linking databases from Estonia, the Czech Republic, Germany, Netherlands, Austria, Romania and Slovenia, with others set to join at a later stage.

The database will be serve businesses, creditors and investors, who want to make checks before deciding to invest.

Alar Jäger, the deputy head of Krediidiinfo, an Estonian financial information company, said the definition of insolvency varies across the union, and the register could be a step towards aligning rules practices and definitions.

He said Estonian companies giving out credit to EU partners, such as asking for payment of goods and services after delivery, will benefit. Those type of companies make up 91 percent of businesses in Estonia.

Source: ERR News

Pwc: Estonian total tax rate is one of highest

According to PricewaterhouseCoopers Estonia’s tax level is not low. On the opposite, it is one of the highest in the EU.

Read more from here - http://www.pwc.fr//assets/files/pdf/2012/11/pwc_paying_taxes_2013.pdfPwc taxes

Tax inspectors visit construction and service companies

Estonian companies in the construction and service have been warned of a blanket blitz where 77 inspectors will take to the field in July and August to make sure the companies are keeping proper records on employees.

A change is taking effect on July 1 where companies must now register all employees directly with the tax authority rather than the Health Insurance Fund.

Read more from ERR News

Tax board to publish companies with the tax debt

The Tax Board will publish the names of all companies with tax debt of 1,000 euros or more on its website starting on June 1, in an attempt to create accounting discipline.

Currently there are about 5,000 companies which qualify for the list.

Read more from ERR

President proclaims VAT law amendments

Estonian President Toomas Hendrik Ilves promulgated the amendments to the Value-Added Tax Act on May 20, 2014.

The law makes it mandatory for businesses to disclose in an annex to the VAT declaration the other party in all transactions exceeding 1,000 euros.

Read more from BBN

No income tax was paid on largest dividend payment

Äripäev writes that Estonian businessman Margus Linnamäe, owner of Estonia’s largest pharmaceutical retail and wholesale group Magnum, and co-owner of Postimees and BNS media groups, paid no  income tax on 20 million euros in dividends that he took out this year.

He should have paid 5.3 million euros on his 20 million euro dividend that he took out of his Estonian-based holding company MM Grupp OÜ.

Linnamäe, however, paid no income tax thanks to the fact that the money was paid out by MM Holdings B.V., the Dutch holding company that is also a subsidiary of MM Grupp.

Read more from BBN

95% of taxpayers filed tax returns electronically

95.4% of taxpayers in Estonia filed their tax returns electronically, an increase of 0.4% year on year, spokespeople for the Estonian Tax and Customs Board said.

All in all, tax returns for 2013 were filed by a total of 629,715 Estonian taxpayers.

Read more from BBN

Hotels against proposal to increase VAT

Estonian tourism sector does not support a proposal made in the course of coalition negotiations to raise the value added tax (VAT) applicable to accommodation services from 9 percent to the universal VAT rate of 20 percent applied in Estonia.

Of the 28 member states of the European Union only four do not apply a lower VAT rate to accommodation services. Their number will decrease further in 2015 because Lithuania has decided to impose lower VAT rate on accommodation services.

Feliks Mägus, board member of Nordic Hotel Forum, said changing the VAT rate would have a negative effect on the whole tourism sector.

Read more from BBN

Reform Party, SocDems promise to reduce labour taxes

The coalition of Reform Party and Social Democrats are promising more funding for various purposes, but do not yet want to say where the additional money will come for, in other words, from which sectors it will be taken away from, writes Postimees.

One area where the new coalition seeks to agree is to reduce labour taxes.

Read more from BBN

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