News
Tax & Legal Updates
Latest tax and legal news prepared by our professionals from Tax Department and Law Firm Deloitte Legal
News
Amendments to VAT taxation of immovable property came into force 1st of October
On 4 of April, 2018, Estonian parliament adopted amendments to VAT Law, which partially came into force on 1st May 2018 and partially on 1st October 2018. Amendments that came into force on 1st of October are related to taxation of immovables.
For more information please contact Tõnis Elling telling@deloittece.com
Practical and useful
Establishment of a legal fact – how to benefit from it?
Since January 2018 the bailiff has the opportunity to provide service for the establishment of a legal fact in extrajudicial proceedings. Establishment of a legal fact can be an evidence of legal proceedings, as well as proof of other everyday important facts. The bailiff does not give a legal opinion of the situation. This service is worth considering in a situation where it is better to be safe (and prevented) than regret afterwards.
For more information please contact Simo Soolo ssoolo@deloittece.com
Employer’s option to make income tax exempt contributions to employees’ voluntary pension fund
Considering aging population, the shortages of pensions system and the need to raise individuals’ financial awareness, it is often the question why people do not save (enough). Excluding the individuals who do not have the financial resources to make the pension contributions, most of us are present biased. According to Estonian Income Tax Act, employer has an option to make income tax exempt contributions to employer’s voluntary pension fund.
For more information please contact Kristiina Stokkeby kstokkeby@deloittece.com
Requirements for the prevention of money laundering
Money laundering is considered to be the activity by which individuals want to conceal the origin of the proceeds of the illegal activities and turn it into a legitimate income. Prevention of money laundering is necessary in order to ensure a credible and transparent economic environment and to prevent the legalization of property derived from crime.
For more information please contact Simo Soolo ssoolo@deloittece.com or Eeva Pajuviidik epajuviidik@deloittece.com
Taxation of virtual currency
Tõnis Elling, a VAT manager in Deloitte Estonia, explains, based on court decision, the principles of income tax and VAT taxation of virtual currencies.
For more information please contact Tõnis Elling telling@deloittece.com
Declaration of distance sales
Online shopping is growing ever more widely. More and more people want to make purchases, recently even food products, without leaving home. Entrepreneurs are increasingly prepared to offer this opportunity. Distance selling has been widespread in the last decade, but the VAT principle of distance selling has remained the same for many years. Both the European Union VAT Directive 112/2006 and the Value Added Tax Act (KMS) regulate distance selling.
For more information please contact Tõnis Elling telling@deloittece.com
Guidelines given by authorities and court cases
Right to be forgotten (Article 17)
The preamble to Regulation (EU) 2016/679 (hereinafter GDPR) recognizes that the scope for collecting and sharing personal data has increased significantly, and rapid technological development and globalization have created new challenges on personal data protection. It is not difficult to guess, that most of the claims in terms of deleting personal data have been submitted against search engines, for example Google, which is also associated with the most famous and remarkable court cases.
For more information please contact Julia Gramma, jgramma@deloittece.com
How was the Tallinn sales tax dispute settled?
Tõnis Elling, a VAT manager in Deloitte Estonia, explains, on basis of a recent judgment, why Tallinn's sales tax was not in violation of the VAT Directive and what should be noted for sales tax.
For more information please contact Tõnis Elling telling@deloittece.com
Planned legislation
Changes to VAT taxation of vouchers
VAT taxation of vouchers will soon be regulated in VAT Act. From 1 January 2019, an amendment to the VAT Directive 2006/112/EC regulating vouchers will come into force in the European Union (EU) aimed at simplifying, updating and harmonizing the VAT rules applicable to vouchers.
According to the draft law, clause 4 (11) of the VAT Act, pursuant to which the transfer of a single-use voucher is considered as a supply of goods or service, is added. Which means that single-use vouchers will be subject to VAT when they are issued and multi-purpose vouchers when they are realized.
For more information please contact Tõnis Elling, telling@deloittece.com
On 25 June, Directive 2018/822/EU on the mandatory exchange of information on cross-border schemes in the field of taxation, came into force
The aim of the directive is to ensure the proper functioning of the internal market.
The directive requires to notify the Tax and Customs Board about aggressive cross-border tax planning. Tax authorities will automatically exchange information with the relevant authorities in other Member States. All Member States are obliged to transpose the Directive into their national law by 31 December 2019 and apply from 1 July 2020. However, it should be noted that the first reporting obligation applies to aggressive tax planning, where the first step was made on 25 June 2018 and onwards.
For more information please contact Liisu Lell, llell@deloittece.com
The amendment for the Income Tax Act to be in compliance with Council Directive (EU) 2016/1164 laying down rules against tax avoidance practices that directly affect the functioning of the internal market
According to the amendments to the Income Tax Act, the following tax avoidance rules are applied to prevent the tax base erosion and profit shifting: general anti-abuse rule, taxation of excess borrowing costs, exit tax rules and rules for foreign controlled companies.
For more information please contact Liisu Lell, llell@deloittece.com
