Yes: in Estonia corporate income tax is 0% on profits that stay in the company. Tax arises when the company distributes profits (for example, dividends), at 22% as of October 2026. But that 0% does not mean you pay no tax anywhere.
Reviewed on 2 October 2026. Rates can change: check the current figure with the Estonian tax authority (EMTA). Informational guide.
What counts as reinvesting
Reinvesting means keeping profit inside the company for the business: buying stock, paying for advertising, developing products or saving in the company. While it is not distributed, it is not taxed in Estonia.
When 22% applies
- When paying dividends.
- On some payments Estonia treats as hidden distributions (for example, non-business expenses or gifts).
- On other transactions the law treats as distributions.
What does not change
- VAT. Estonia applies a 24% standard VAT rate since 1 July 2025, and domestic registration is required above €40,000 per year.
- Your country of residence. Dividends you receive may be taxed under your personal income tax, and if you run the OÜ from Spain it could be treated as tax resident there (risks and benefits).
- Bookkeeping. The OÜ must keep books and file annual reports (bookkeeping).
Is it right for you?
It usually fits when you reinvest almost all profit and sell in the EU; it is less clear if you need to extract money every year. Compare with sole trader or company and LLC or OÜ.
FAQ
Is 0% forever? It is the current system; laws can change.
Can I set it up without living in Estonia? Yes, but how you manage it affects where it is taxed.
How Data Biz helps
We set up and run bookkeeping for OÜ: Estonian company. Request a free consultation.
Sources and review
e-Residency of Estonia, taxation and EMTA. Reviewed on 2 October 2026.