October 2016
Since 1 January 2016 royalties paid from Finland to Estonia have been exempted from tax at source
In accordance with a tax treaty between Finland and Estonia, Finland has had the right to tax royalties arising in Finland and paid to a resident in Estonia. The tax at source has been 5%-10%.
However, due to new developments no tax at source can be levied on royalties paid from Finland to Estonia. This change was introduced when Estonia agreed with another tax treaty country that royalties should be taxable only in the recipient’s home state. Based on the so called most-favoured nation clause this same principle applies retroactively also to the Finnish-Estonian tax treaty and royalties covered by this agreement.
However, due to new developments no tax at source can be levied on royalties paid from Finland to Estonia. This change was introduced when Estonia agreed with another tax treaty country that royalties should be taxable only in the recipient’s home state. Based on the so called most-favoured nation clause this same principle applies retroactively also to the Finnish-Estonian tax treaty and royalties covered by this agreement.
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The information in this site has been prepared for general informational purposes only and it should not be used as a substitute for consultation with a professional tax, legal or other competent advisor. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, Effektiivi Oy is not responsible for any errors or omissions, or for the results obtained from the use of this information.
The information in this site has been prepared for general informational purposes only and it should not be used as a substitute for consultation with a professional tax, legal or other competent advisor. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, Effektiivi Oy is not responsible for any errors or omissions, or for the results obtained from the use of this information.
