Withholding agent for income tax

(1) A withholding agent for income tax is a resident legal person, state or local government authority, sole proprietor, employer who is a natural person, or non-resident with a permanent establishment or operating as an employer in Estonia, who makes payments subject to income tax pursuant to Chapters 3 or 5 of this Act to a natural person or non-resident.

(2) A withholding agent is required to withhold income tax on payments listed in § 41, pursuant to the rates prescribed in subsection 43 (1). Income tax is withheld upon the making of a payment. Income tax shall not be withheld on the following payments:
1) payments made to resident legal persons;
2) payments made to non-residents’ permanent establishments registered in Estonia;
[RT I, 18.11.2010, 1 - entry into force 01.01.2011]
3) payments made to sole proprietors entered in the commercial register or the register of a Contracting State if the payments are the business income of the recipients;
[RT I, 18.11.2010, 1 - entry into force 01.01.2011]
4) interest (subsections 17 (1) and (3), subsection 29 (7)) and insurance indemnities (subsection 20 (3), subsection 29 (9)) subject to income tax paid to resident natural persons if the taxpayer has notified a withholding agent for income tax that the interest or insurance indemnity has been received on financial assets acquired for the money in the investment account specified in § 17².
[RT I 2010, 34, 181 - entry into force 01.01.2011]

(2¹) [Repealed - RT I 2003, 88, 587 - entry into force 01.01.2004]

(3) An employer who is a natural person (except a sole proprietor) and a non-resident who operates as an employer in Estonia but does not have a permanent establishment (§ 7) in Estonia are required to withhold income tax only on payments specified in clauses 41 1) and 2).

(3¹) Income tax shall not be withheld on payments specified in clause 41 (1) if the recipient of the payment performs his or her official duties outside Estonia, and:
1) the payment is made through or on account of a resident legal person’s permanent establishment in a foreign state, or
[RT I, 18.11.2010, 1 - entry into force 01.01.2011]
2) the withholding agent has a certificate issued by the foreign tax administrator stating that the recipient of the payment is a taxable person in the foreign state with regard to that income.

(4) A withholding agent is required to transfer withheld income tax to the bank account of the Tax and Customs Board not later than by the tenth day of the month following the month during which the payment was made.

(5) A withholding agent is required to submit a tax return to the Tax and Customs Board by the due date specified in subsection (4). A resident of Estonia and a state or local government agency shall submit the tax return electronically if it includes more than five recipients of payments. The format of the tax return and the procedure for completing the form shall be established by a regulation of the Minister of Finance. The amount of income tax withheld during a calendar year from the payments made to a resident natural person and specified in the tax return shall not be reduced after 15 February of the year following the calendar year.
[RT I, 18.11.2010, 1 - entry into force 01.01.2011]

(5¹) In case of the declaration of bankruptcy of a taxable person, the tax return specified in subsection (5) shall be submitted separately for the part of the period of taxation preceding the declaration of bankruptcy and following the declaration.
[RT I, 18.11.2010, 1 - entry into force 01.01.2011]

(6) At the request of a taxpayer, a withholding agent is required to issue a certificate to the taxpayer concerning payments made and the income tax withheld during a calendar year, broken down by types of income and tax rates, not later than by 1 February of the year following the withholding of the tax or, if the taxpayer leaves work, together with the final settlement. The format of the certificate and the procedure for completing the certificate shall be established by a regulation of the Minister of Finance.

(6¹) A withholding agent who during a calendar year has paid for the taxpayer the insurance premiums of supplementary funded pension or amounts for acquisition of units of voluntary pension funds shall provide, at the request of the taxpayer, a certificate regarding the above by 1 December of the calendar year.
[RT I, 18.02.2011, 1 - entry into force 01.01.2012]

(7) The income tax of employees of such authorities whose staff, consolidated data or specific duties constitute a state secret shall be calculated pursuant to the procedure established by a regulation of the Minister of Finance.

Дата добавления: 2015-11-14