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Estonia Planning New Restriction on Subsidiary-Parent Loans

|Proposed Changes|Estonia
Estonia

Estonia's Ministry of Finance is reportedly planning to introduce a new regulation to restrict loans from subsidiaries to parent companies. Under Estonian tax rules, corporate income tax is imposed on distributed profits. Certain MNEs are avoiding taxation by transferring profits outside of Estonia through loans extended by Estonian subsidiaries to foreign parents. The proposed regulation would curb this practice by requiring a deposit of 20% on any loan from a subsidiary to foreign parent th…

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