Interest
As a rule, interest is not taxed in Estonia as income of a non-resident.
At the payer level, the part of interest that significantly exceeds the amount of interest payable on similar debt liabilities under market conditions at the time the debt liabilities arose and the interest was paid, is taxed according to the transfer price provisions.
As an exception, only the interest received by a non-resident in connection with a holding in a common investment fund or in another pool of assets, of whose assets more than 50% accounted, at the time of the payment of the interest or during any period within the two years preceding it, directly or indirectly for immovables or construction works as movables located in Estonia and in which the non-resident had a holding of at least 10% at the time the interest was received, is taxed as income of a non-resident. In the latter case, the rate of income tax to be withheld is 22%, tax treaties with the United States, Greece and Vietnam reduce it by 10%.
Dividends
NB! From 2025, non-resident's dividend income is not subject to income tax in Estonia, as the tax incentive for regularly paid dividends, the lower income tax rate of 14/86 on dividends and the 7% rate of income tax to be withheld on dividends paid to natural persons no longer applies.
Beginning from 2025, dividends in Estonia are only taxed at the company level with income tax at a rate of 22/78.
As an exception, dividends received by a non-resident natural person from an Estonian resident company are subject to income tax, according to a transitional provision, if they were received at the expense of a dividend taxable at a lower tax rate (14/86) until 2024.
The payer declares the dividend recipient on form INF 1. A non-resident’s code must be applied for the non-resident from the Estonian Tax and Customs Board if they do not have one or do not have an Estonian personal identification code. About issuing registry codes to non-residents
Last updated: 02.12.2025
