The Ministry of Finance is working on the draft act in the field of sealing CIT and PIT.
Detailed solutions include:
- taxation of income from the sale of movable property for consideration received by the immediate family of an entrepreneur who purchased this item for private property after the end of the operating lease, and which he previously used in business activity, if the family benefits from the exemption from inheritance and gift tax and the sale for consideration is made before the expiry of 3 years from receipt;
- taxation of the so-called loyalty programs, not at the rate of 19% of cash capital, but as from an employment relationship according to the tax scale;
- introduction of the impossibility of reducing or increasing the depreciation rate “retroactively”, i.e. after the expiry of the deadline for filing the annual return and paying the tax due for that year;
- changes in the “national” minimum tax;
- clarification of the rules for the use of the housing relief by indicating that it is to meet the taxpayer’s own housing needs. The fulfilment of these needs will be the acquisition of real estate or residential rights or land for the construction of one’s own house, if the taxpayer does not have any other real estate, residential premises;
- taxation of services provided to a related company by a natural person at a lump sum at the rate of 17% of revenue;
- taxation of shareholders’ income generated from the liquidation of a company that is not a legal person resulting from the transformation of a company-CIT taxpayer, if the liquidation of a company that is not a legal person takes place within a specified period (earlier than 3 calendar years) after the transformation of the company;
- making the possibility of using IP Box preferences conditional on employing at least 3 natural persons who are not related entities to the taxpayer;
- an unambiguous indication that the income from the sale of real estate or property rights and other things referred to in Article 10(1)(8) of the PIT Act, which is intended to settle in whole or in part the liability, including on account of the loan (credit) taken, is the amount of the liability settled as a result of such sale for consideration (datio in solutum);
- indicating that the taxpayer may reduce the income constituting the basis for calculating the solidarity levy by losses from previous years;
- exclusion of the possibility of depreciation of goodwill arising as a result of acceptance for paid use;
- introduction of changes of a clarifying nature in the tax on shifted income (Article 24aa of the CIT Act);
- introduction of a definition of a taxpayer and an entity commencing or commencing business, according to which such a taxpayer (entity) is not considered to be a taxpayer (entity) continuing the activity of another taxpayer’s enterprise (entity). Introduction of rules specifying the method of determining the value of sales revenue in the event that the taxpayer’s previous tax year is longer or shorter than 12 months;
- introducing a presumption that any payment or distribution of profit in any form, after the end of taxation with “Estonian” CIT, takes place from the profit generated during the period of taxation under this regime;
- introduction of a definition of non-business expenses in the “Estonian” CIT;
- clarification of the definition of hidden profits in the “Estonian” CIT by eliminating the prerequisite of the right to share in profit and expanding the catalogue of hidden profits, m.in. to include all kinds of fees and receivables resulting from a lease, lease or other agreement of a similar nature;
- recognizing the effectiveness of the change of the form of taxation to “Estonian” CIT in the event of failure to sign or sign the financial statements after the deadline by the head of the entity, if the other formal conditions and obligations related to the change of the form of taxation before the end of the tax year adopted by the taxpayer have been met;
- changes in the depreciation rules for real estate companies.
The regulations would be adopted by the Government in the third quarter of this year. It is not certain if the changes will be applicable from 2026.
