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OECD doesn't support Estonia's planned tax exemption for dividend payers
BC, Tallinn, 21.09.2017.
Print version
Print versionAccording to the Organization for Economic Cooperation and Development (OECD), Estonia's planned reduction of the taxation of distributed dividends for mature companies is unlikely to have any positive impact on investment by domestic firms, will add complexity to the tax system and penalize young firms, informs LETA/BNS.
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The planned reduction of the taxation of distributed dividends for mature
companies -- from 20% to 14% for companies that pay dividends for three
consecutive years -- is unlikely to have any positive impact on investment by
domestic firms, because reinvested profits are not taxed, OECD said in its
economic survey for Estonia.
Furthermore, the planned change would add complexity to the tax system and
penalize young firms.
While this is expected to increase revenue in the short term by encouraging
the companies to distribute profits, it will decrease it in the longer term,
OECD finds.
OECD compiles biannual economic surveys for each of its 35 member states.
Estonia joined the organization in 2010.
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