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>Those tax rates - 20% VAT and 33% social taxes I would expect that VAT is only relevant for products sold to Estonian residents and income/social tax only rel
by ddeck 11y ago
>Those tax rates - 20% VAT and 33% social taxes
I would expect that VAT is only relevant for products sold to Estonian residents and income/social tax only relevant if you employ residents of Estonia.
Income tax is typically based on residency, I believe the US is the only developed country in the world that taxes non-residents on income.
Disclaimer: I have not looked at Estonian tax law
- reidrac 11y agoEU VAT doesn't work like that, Estonia is in the EU sigle market (and the Euro). http://en.m.wikipedia.org/wiki/European_Union_value_added_tax http://en.m.wikipedia.org/wiki/European_Union_value_added_ta... You may be right in the income and social tax, but I suspect establishing a business in Estonia may require visiting the country at some point.
- ddeck 11y agoAs I understood it, as of 2015 EU digital goods VAT must be paid based on the VAT in the customers country, regardless of whether the sellers business is located inside or outside the EU. If so, what's the downside of having your business based in Estonia vs the US with respect to VAT?
- jarek-foksa 11y agoIf you and your small business are based in the US then you could ignore the VAT nonsense when selling to the customers from the EU [1]. It's not in the interest of the IRS to make you pay taxes in Europe. [1] http://www.happybootstrapper.com/2014/im-us-whatll-happen-just-ignore-eu-vat-changes/ http://www.happybootstrapper.com/2014/im-us-whatll-happen-ju...