As a general rule, Estonian CIT defers the moment when tax liability arises until the distribution of profits to shareholders. At the same time, under the lump sum provisions for companies, benefits arising otherwise than through the distribution of dividends are also included in the tax base. This type of income, the so-called hidden profits, is recognised on the basis of generally formulated premises, which leave many interpretation doubts and do not allow for an unambiguous interpretation of the provisions, even by the tax authorities themselves. It is unknown time-based costs should be accounted for in Estonian CIT.
Under current legislation, the answer to this question is not obvious. And then there is the correct recognition of the tax liability for accrued expenses, which will have a key impact on the lump sum – says Szymon Lipiński, Tax Consultant at Crowe, in the article for Dziennik Gazeta Prawna.
The article is available in Polish only.
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