Calculation of taxable income

(1) Income derived by a natural person (including business income) shall be recorded for income tax purposes during the period of taxation in which such income was derived. Deductions from taxable income (including expenses related to business) shall be recorded during the period of taxation in which such expenses were paid. Income tax paid or withheld shall be recorded during the period of taxation in which the tax was paid or withheld.

(2) A taxpayer shall keep account of its income and expenses in a manner which clearly sets out the data necessary for determining the taxable income. A taxpayer is also required to preserve the documents related to income and expenses.

(3) Business income and deductions therefrom are calculated in accordance with the rules prescribed in legislation regulating accounting, as far as this Act does not prescribe otherwise. The calculation method prescribed in subsection (1) also applies to sole proprietors who use the accrual method of accounting.

(4) If taxable income is received in a non-monetary form, the taxpayer is deemed to have received income in the amount of the market price of the object or proprietary right received.

(5) Income, deductions from income, and income tax paid or withheld in foreign currency shall be converted into euros on the basis of the European Central Bank exchange rate on the date on which the income was received, the payment was made or the income tax was paid or withheld.
[RT I 2010, 22, 108 - entry into force 01.01.2011]

(6) Upon declaration of bankruptcy of a natural person, the income and expenses subject to income tax and income tax paid or withheld shall be recorded separately as originating in the part of the period of taxation which preceded the declaration of bankruptcy and in the part which followed.

(7) A sole proprietor entered in the commercial register may open one special account with a credit institution which is a resident of a Contracting State or a branch of a non-resident credit institution registered in a Contracting State, and any increase in the amount in the account during a period of taxation is deducted from the business income of the same period and any decrease in the amount in the bank account during a period of taxation is added to the business income of the same period. The increase in the amount in the special account during a period of taxation is deducted from the business income of the same period of taxation if both of the following conditions are met:
1) only amounts calculated as business income and benefits and compensations received in connection with business pursuant to law are transferred to the special account within ten working days as of their receipt;
2) the increase in the amount in the special account during a period of taxation does not exceed the business income derived by the taxpayer and the amount of benefits and compensations received in connection with business pursuant to law during the period of taxation, after the deductions relating to enterprise and permitted for in subsection 32 (1) have been made.
[RT I, 18.11.2010, 1 - entry into force 01.01.2011]

(7¹) The decrease in the amount in the special account is not added to the business income for a period of taxation upon the transfer of the special account in the case specified in subsection 37 (7).
[RT I, 18.11.2010, 1 - entry into force 01.01.2011]

(8) The interest paid by a credit institution for depositing money in a special account specified in subsection (7) is deemed to be business income derived by the account holder. In the case of termination of engagement in business, the amount in the special account is added to the business income.

Дата добавления: 2015-11-14