Dividend tax in Estonia 2026
When an Estonian company pays dividends, it pays income tax of 22/78 of the net amount, that is 22% of the gross. The 14/86 reduced rate and the 7% withholding were abolished in 2025. A worked example and the filing deadlines.
The basic rule
When an Estonian company pays dividends, it pays income tax of 22/78 of the net amount, that is 22% of the gross. The company pays the tax, not the recipient – a shareholder who is a private individual receives the dividend with no further income tax to pay.
Since 2025, these no longer apply:
- the 14/86 reduced rate for regularly paid dividends;
- the 7% income tax withholding on dividends paid to private individuals.
Example
A shareholder is to receive a dividend of €7,800 (net).
- Income tax: €7,800 × 22/78 = €2,200
- Total cost to the company: €7,800 + €2,200 = €10,000
- The shareholder receives: €7,800
Put the other way round: of €10,000 in profit, 22% (€2,200) goes to income tax and 78% (€7,800) to the shareholder.
Declaring and paying
- Dividends are declared on TSD annex 7, and the recipients on form INF 1.
- The income tax is declared and paid by the 10th of the month after the month of payment.
- Dividends can only be paid on the basis of an approved annual report, and only out of retained earnings.
Other things to keep in mind
- A dividend is not salary: no social tax or unemployment insurance is due on it. If the shareholder also works in the company, that work has to be paid as salary – EMTA can reclassify pay that comes only as dividends.
- Equity payouts (a share capital reduction, for example) are also taxed at 22/78, on the part that exceeds the original contribution.
If you are planning to pay dividends, or want to think through the right mix of salary and dividends, we can help – see tax and business advisory.
