Analytics, EU – Baltic States, Financial Services, Taxation

The capital tax rate (tax on payments made into equity capital of enterprises) are also low in Lithuania (12.1%) and in Latvia (14.6%) while they are the highest in Cyprus (50.5%).

Counselor of the Ministry of Finance Annika Vilu noted that the low capital tax rate mostly is based on the particularities of imposing taxes on the profits in Estonia that was decided on the year 2000. "Estonia has chosen to impose less taxes on earnings (labour and capital taxes) and earn tax revenue rather on consumption (consumer taxes)," she explained.

In the year 2007, the tax burden in Estonia was 33.1%. According to initial projections, the Ministry of Finance estimates that Estonia's tax burden this year is 33.6% – the highest rate since the year 1998 when it was 34.2%. In 2008, the tax burden in Estonia was 32.5%.