Through e-Residency, tens of thousands of foreigners have established companies in Estonia, hoping to benefit from its attractive corporate tax system, which allows the deferral of income tax until profits are distributed.
However, this expectation can quickly turn into disappointment if a commonly underestimated tax risk is overlooked – permanent establishment. This may result in the income of an Estonian company becoming taxable in the e-resident’s country of residence.
Permanent establishment is a concept in international tax law used to determine when a company has sufficient economic presence in a country for its income to be taxed there.
Business Activities in Another Country
According to the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention, a permanent establishment is a fixed place of business through which the business of an enterprise is wholly or partly carried on. Most double taxation treaties (including those with Finland, China, the United States and India) use the same concept.
Typical examples of permanent establishments include:
- place of management;
- branch;
- office, factory, or workshop;
- farm, plantation, or other place related to agriculture or forestry;
- mine, oil or gas well, quarry, or other natural resource extraction site;
- construction site or building, installation or assembly project, including related supervisory activities, if such activities last longer than 12 months (in many treaties 6 or 9 months).
Example 1
The board members of an Estonian company are e-residents living in Germany and use a rented office in Berlin to make strategic decisions. In this case, the German tax authorities may conclude that the company has a permanent establishment in Germany, as the effective management takes place there.
Dependent and Independent Agents
A permanent establishment usually requires a physical location, such as an office or factory. However, it can also arise through the activities of a company’s representatives.
A permanent establishment may exist if a representative has the authority to conclude contracts on behalf of the company in a given country and does so on a regular basis.
However, a permanent establishment does not arise where an agent, broker, or intermediary acts independently in the ordinary course of their business. An agent is considered independent if they do not act primarily on behalf of a single company.
Example 2
If a sales agent operating in Denmark regularly negotiates and concludes contracts on behalf of an Estonian company established by an e-resident, it may be concluded that the company has a permanent establishment in Denmark.
However, if the same company uses a local broker to sell an office building in Lithuania, the broker is likely considered an independent representative and no permanent establishment arises.
Remote Work May Trigger Tax Obligations Abroad
Remote work has become increasingly common and is also relevant in determining permanent establishment. Working remotely alone does not automatically create a permanent establishment. It arises only if the employee’s presence abroad is business-driven.
This is generally the case when there is a direct link between the employee’s presence and the company’s business activities. In practice, a permanent establishment usually does not arise if the employee stays abroad for less than six months.
Example 3
An employee of an Estonian IT company travels to Spain for one month to work remotely while enjoying the local climate and cuisine. In this case, there is neither a business purpose nor sufficient duration, and no permanent establishment arises.
However, if the same employee travels to India for nine months to recruit employees and clients, their presence has a clear economic purpose for the company. Due to this business-driven activity, a permanent establishment may arise in India.
Legal Implications of a Permanent Establishment
Business operations typically require people, but a permanent establishment may also arise through equipment or facilities that operate without direct human involvement, such as automated production processes.
Activities of a preparatory or auxiliary nature are generally not considered to create a permanent establishment. For example, having accounting, customer support, IT system maintenance, market research or similar support functions abroad does not usually create a permanent establishment.
The above outlines the general principles for determining a permanent establishment. However, real-life situations are often more nuanced, and tax authorities in different countries may interpret the concept of a permanent establishment differently. In case of doubt, it is advisable to seek clarification from a local tax advisor or the tax authority.
The existence of a permanent establishment generally entails registration, accounting and reporting obligations in the foreign country.E-residentidel tasub maksustamisel meeles pidada järgmisi olulisi põhimõtteid:
- Eesti äriühing on automaatselt Eesti maksuresident. Kui asutad Eestis äriühingu, on see Eesti maksuresident ning peab maksma tulumaksu Eestis (välja arvatud juhul, kui maksuleping selle välistab).
- Eesti maksuresidentsus ei vabasta automaatselt välisriigi maksukohustusest. Eesti maksuresidentsus ei välista maksustamist teistes riikides, kus toimub äritegevus või kus Eesti äriühing saab tulu.
- Maksukohustus võib tekkida korraga mitmes riigis. Kui Eesti äriühingul on püsiv tegevuskoht näiteks Soomes, tekivad maksukohustused nii Eestis (residendiriigis) kui ka Soomes (püsiva tegevuskoha riigis).
Topeltmaksustamise vältimiseks tulenevad maksulepingutest alljärgnevad põhimõtted:
- Kui Eesti äriühing tegutseb ainult välismaal, maksustatakse seal saadud tulu samas välisriigis. Samuti võib Eesti äriühingu tulu kuuluda maksustamisele välisriigis juhul, kui äriühingu juhtimine toimub väljaspool Eestit.
- Juhul kui Eesti äriühing teenib välisriigis kasumit püsiva tegevuskoha kaudu, vabastatakse välisriigis maksustatud püsiva tegevuskoha kasumi arvelt Eestis välja makstud dividend siin tulumaksust. E-residendi asutatud Eesti äriühingul tekib sellisel juhul maksukohustus eelkõige välisriigis.
- Olenemata äriühingu tegevuskohast, maksustatakse ettevõtlusega mitteseotud kulud Eestis (välja arvatud juhul, kui püsiva tegevuskoha riigis on ettevõtlusega mitteseotud kulu maksustatud kasumi osana).
Praktilised nõuanded riskide maandamiseks
Maksukohustuste kindlakstegemise eest vastutab ettevõtja. Kui püsiva tegevuskoha risk jäetakse tähelepanuta, ei pruugi äriühing saada osa Eesti soodsast tulumaksusüsteemist ning halvimal juhul võivad sellega kaasneda topeltmaksustamine või sanktsioonid.
Kuna lõplik vastutus oma maksukohustuste kindlakstegemise eest lasub ettevõtjal, on allpool esitatud praktilised näpunäited, mida tasub arvesse võtta, et maandada püsiva tegevuskohaga seotud maksuriski ja kasutada Eesti maksusüsteemi eeliseid.
- Loo Eestisse reaalne majandustegevus (palka töötajaid, määra kohalik juhatuse liige, rendi kontoripind, korralda juhatuse koosolekuid füüsiliselt Eestis vms).
- Väldi väljaspool Eestit samas kohas pidevate äriliste otsuste tegemist ja korduvate lepingute sõlmimist.
- Arvesta inimpõhiseid riske, eriti kui kasutad äritegevuseks lepingu sõlmimise volitusega esindajaid või kui töötajad teevad pikemat aega kaugtööd.
- Hinda püsiva tegevuskohaga seotud riske vähemalt kord aastas ning majandustegevuse muutumisel sagedamini.
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