Calculation of income tax paid abroad

(1) If a resident taxpayer has derived income from abroad during a period of taxation, all income derived from abroad is included in the taxable income of the person and income tax paid or withheld on such income abroad is deducted from the income tax to be paid, in accordance with the conditions specified in subsections (2)–(6). Income tax is calculated separately for income derived in Estonia and for income derived in each foreign state. Income tax paid in a foreign state on income which is not subject to tax in Estonia shall not be taken into account.

(2) If the income tax calculated in accordance with this Act on income derived in a foreign state exceeds the amount of income tax paid in the foreign state, the taxpayer is required to pay the difference between the foreign income tax and Estonian income tax as income tax to be paid in Estonia.

(3) If the income tax calculated on income derived in a foreign state is less than the income tax paid in the foreign state or if the income tax calculated according to the taxpayer’s income tax return on income from all sources is less than the income tax paid in the foreign state, the overpaid amount of income tax paid in the foreign state is not refunded in Estonia.

(4) If a resident natural person has derived taxable income pursuant to subsection 18 (4) or § 22, he or she has the right to deduct a proportional share of the income tax paid or withheld abroad by a foreign legal person, association of persons or pool of assets, which corresponds to the resident’s share of profit taxable as income, from the income tax to be paid by him or her.

(5) Income tax paid or withheld in a foreign state may be deducted from income tax payable in Estonia only if the taxpayer submits a certificate issued by the foreign tax administrator or withholding agent certifying the payment of income tax or another tax equivalent to income tax.

(6) If more income tax is paid or withheld in a foreign state than prescribed by the law of the country or an international agreement, only the mandatorily payable part of the income tax of the foreign state may be deducted from income tax payable in Estonia.

(7) If the income tax on income derived in a foreign state is paid during a period of taxation different from the period when the income was derived, it shall be taken into account in Estonia during the period of taxation when the income taxable in a foreign state was received.

(8) If a resident natural person has received interest from which income tax has been withheld arising from Council Directive 2003/48/EC on taxation of savings income in the form of interest payments (OJ L 157, 26.06.2003, p. 38–48) or from an agreement concluded by Estonia or the European Union on the basis of that directive, then the withheld income tax may be deducted from the income tax payable on the income of the same period of taxation in Estonia. The part of income tax not deducted shall be returned by the due date provided for in subsection 46 (6).
[RT I 2006, 28, 208 - entry into force 01.07.2006 - subsection (8) applied retroactively as of 1 January 2006]

Дата добавления: 2015-11-14