How shall time-based costs be treated for the purposes of Estonian CIT?
In Estonian CIT, the moment of tax liability is deferred until the distribution of profit to shareholders, and the tax base also includes consideration generated otherwise than through the payment of dividends. However, it is not clear how to treat time-based expenses for the purposes of Estonian CIT.
In an article for Rzeczpospolita, Szymon Lipiński, a consultant at Crowe Tax Advisory Department, points out that the rules on Estonian CIT remain ambiguous and gives some examples of the treatment of time-based expenses for Estonian CIT purposes.
The expert explains, inter alia, that 'the tax base in Estonian CIT is all forms of profit for the shareholders, and adds that 'in the case of hidden profits arising from time-settled costs, it is therefore crucial to determine whether a certain input should be considered as a transfer for consumption when it is incurred (expensed) or at the time the cost arises on accounting grounds'.
The article is available in Polish only.
Learn more: Hidden profits in Estonian CIT - doubts increasing
