New Double Taxation Agreement in process in Estonia

18 October 2016

The Estonian Government approved in the end of September 2016 proposal on signing the Convention between the Government of the Republic of Estonia and the Government of the Kyrgyz Republic of for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion.

The agreement between Estonia and Kyrgyzstan follows the standard contract formulated for the Organisation for Economic Co-operation and Development (OECD). As of September 1, 2016, Estonia has a valid agreement for the avoidance of double taxation with 56 states.

Agreement is planned to be signed 27.06.2017.

Double taxation agreements are designed to encourage investments between the contracting states. The agreement will give investors greater legal certainty. The agreement limits the income taxes which the source country may impose to another country residents. This ensures equal treatment of persons, and eliminates the possibility of double taxation. The information obligation in the agreement provides opportunities to avoid tax fraud.