Tax consultancy

Estonian CIT (lump-sum tax on corporate income) is an effective taxation model that shifts the fiscal burden from the moment of generating profit to the moment of its distribution to shareholders. This solution is designed for companies subject to CIT that focus on dynamic growth and want to allocate generated financial surpluses for further investments. In this system, the effective tax rate (CIT and PIT combined) is lower than in the traditional model, making it one of the most attractive tax mechanisms currently available.

Since the entry into the Estonian tax regime, however, it has become crucial to abandon the traditional approach to tax-deductible costs and instead rigorously monitor expenses for their connection to business activity. Unlike traditional corporate income tax (CIT), professional implementation of the Estonian model is based on an analysis of the company's expense structure. Our support focuses on identifying and mitigating the risk of hidden profits and expenses unrelated to business activity, which are taxable under this system. Operational records must be kept with particular care – every expense for a partner, management board member, or related entity (e.g., car rental, real estate, or consulting services) must have a strong market and business justification.

BTTP offers comprehensive analyses in the process of preparing for this regime. We assist in preparing ZAW-RD notifications and preparing preliminary adjustments to revenues and expenses (so-called preliminary adjustments). Estonian CIT is a "growth accelerator" that, with appropriate substantive oversight, allows for building a strong market and capital position while protecting shareholders' assets from excessive fiscal pressure.