NJORD Estonia explains: Four important tips on tax planning to hire foreign specialists
Need additional employees? Moreover, do you need a specialist, who isn’t interested in moving to Estonia but prefers to work from their country of residence? Be sure to create a successful tax structure for both your company and the specialist!
In today’s business environment it is often necessary and reasonable to hire foreign specialists to work for Estonian businesses. From time to time such specialists prefer to remain in their country of residence where they can stay close to their families and accustomed living arrangements. To ensure a successful business relationship and optimal tax burden for both parties, keep in mind the following:
Pay attention to the responsibilities and rights given to the foreign specialist by the company, because those can determine if the business will be defined to have a permanent establishment abroad.
Depending on the nature and the intellectual property of the company, there might be a need for license agreements between the company and the foreign employee.
Find out whether the company must register itself as a non-resident taxpayer abroad.
Don’t forget the tax fringe benefits and social securities taxes, to ensure that all paper work is as convenient as possible for the foreign employee.
Since every specialist is an important asset to any company’s success, but particularly to start-ups and transportation companies, it is important to value their contributions from the perspective of taxes too.
NJORD’s partner Anne Veerpalu and lawyer Anne-Lii Kask will help you ensure successful tax planning when hiring foreign specialists.
During the first half of every year, all companies are working hard to submit their annual reports. Annual reports must be submitted within six months after the fiscal year has ended. The submission deadline is usually June 30. Since the management board of a company must assemble all shareholders or stockholders at least once a year to approve the annual report, the following topics should be considered under the Estonian law.
For a long time, the legal position for combined carriage of goods by road has been more or less unclear. The Danish Transport, Building and Housing Authority has however recently issued an executive order implementing the rules of the so-called 'Combi Directive' (EU Directive 92/106). The executive order will come into force on July 1, 2018. In addition to implementing the directive, the executive order contains some 'new' rules that will clarify to what extent it is possible for foreign carriers to perform combined transport to and from Denmark.
Travelling in Nordic countries during summer time might trigger your Estonian entrepreneurial mind to start thinking about how to reach these neighbouring markets with your products and services. Great! But, before you start, make sure to do your homework and do not expect anything to happen during the period starting from Midsummer until mid-August, as summer is long and lazy for our dear neighbours.