From 1 July 2020 will be effective changes in the Estonian tax legislation, which under certain conditions will introduce more favourable payroll taxation of remuneration paid to members of the ship or aircraft crew, applying to income and social tax, as well as to unemployment insurance contributions and mandatory funded pension contributions. According to these changes, in the international maritime transportation will be applied unified tax base of EUR 750 per month on the remuneration of the member of the ship crew, on which are due 0% income tax, 20% social tax (pension insurance component) and standard rate unemployment and mandatory funded pension contributions. However, the new 0% income tax rate will not be applicable to remuneration paid for the employment performed on passenger ships, including cruise ships, operated in scheduled trips within the European Economic Area. The Tax and Customs Board has published the following explanations (in Estonian only) on new favourable taxation of resident and non-resident members of the ship crew: https://www.emta.ee/et/ariklient/tulu-kulu-kaive-kasum/muudatused/laevapere-liikmete-tasu-maksustamine
In addition, from 1 July 2020 companies engaged in international shipping will instead of existing corporate tax system based on distributed profits have in Estonia an option to be subject to monthly tonnage tax, if the international shipping transport of the company corresponds to the conditions established in respect of maritime transportation of goods and passengers. The tonnage tax depends upon the net registered tonnage and the age of the qualified ship, taxing less ships which are up to 5-year old. The monthly tonnage tax is due by the company in the tonnage tax regime irrespective whether the respective ship is operated during that month or not. By applying the tonnage tax the Estonian company will no longer be subject to corporate taxation on dividends, gifts, donations and representation expenses, as well as payments from the equity, hidden profit distributions and expenses not related to business. The Tax and Customs Board has prepared the following guidance (in Estonian only) on the tonnage taxation regime and related declaration liabilities: https://www.emta.ee/et/ariklient/tulu-kulu-kaive-kasum/tonnaazikorra-alusel-tulumaksuga-maksustamine
Favourable payroll taxes for ship crew and new tonnage tax
