e-Residency accounting is the ongoing bookkeeping and tax compliance work required by an Estonian OÜ whose owner lives abroad. It covers monthly recording of income and expenses, VAT returns where the company is VAT-registered, payroll declarations for board members and employees, and the annual report filed with the Estonian Business Register within six months of the financial year end.
What Estonian law requires from your company
| Obligation | Deadline | Applies to |
|---|---|---|
| Accounting records and source documents | Continuous | Every OÜ |
| Annual report to the Business Register | 6 months after financial year end (30 June for calendar-year companies) | Every OÜ, including dormant ones |
| VAT return (KMD) | 20th of the following month | VAT-registered companies |
| Payroll and withholding tax declaration (TSD) | 10th of the following month | Companies making taxable payments |
| VAT registration | Obligation arises from the day the threshold is exceeded | Companies exceeding €40,000 turnover in a calendar year |
Deadlines and thresholds as at 2026. We confirm current requirements for your specific case during onboarding.
How Estonian corporate tax actually works
Estonia does not tax company profit when it is earned. It taxes profit when it leaves the company.
- Retained and reinvested profit: 0% corporate income tax. This is the reason Estonia is attractive and it is fully intact in 2026.
- Distributed profit (dividends): 22%, calculated as 22/78 of the net distribution.
- Standard VAT rate: 24% since 1 July 2025. Reduced rates apply to specific categories.
- Payroll taxes apply on top of and out of gross pay, see the breakdown below
Payroll: who pays what (employees working in Estonia)
| Salary (employment contract)* | Board member fee | |
|---|---|---|
| Employer pays on top of gross | Social tax 33% + unemployment insurance 0.8% | Social tax 33% only |
| Withheld from the employee’s gross | Income tax 22% + unemployment insurance 1.6% | Income tax 22% only |
*Board member fees carry no unemployment insurance on either side.
The basic exemption can reduce the income tax withheld for Estonian tax residents who have submitted an application for it. If you live abroad, it generally does not apply. Where you personally pay tax on the fee depends on your residence and the relevant tax treaty.
What’s included in our monthly service
- Recording of purchase and sales invoices
- Bank and payment-processor reconciliation (including Wise, Revolut, Stripe, PayPal)
- VAT return preparation and submission
- Payroll calculation and TSD filing
- EU intra-community and OSS reporting where relevant
- Fixed asset register and depreciation
- Monthly balance sheet and profit & loss in English
- A accountant who answers your questions
- Annual report preparation and filing to the Business Register
Things e-resident companies get wrong (and we fix)
Treating the company bank account as a personal account. Every withdrawal must have a legal basis: salary, board fee, dividend, expense reimbursement or loan. Untitled transfers become taxable distributions.
Assuming e-Residency changes personal tax residency. It does not. e-Residency gives you digital access to Estonian services; where you personally pay income tax is determined by where you live and the relevant tax treaty.
Charging VAT incorrectly on cross-border services. Place-of-supply rules decide whether you charge Estonian VAT, apply reverse charge or fall under OSS. Getting this wrong for two years is a costly correction.
Board member fees paid from the wrong country. Board member remuneration paid by an Estonian company has specific Estonian tax treatment that differs from employment income and it interacts with your country of residence.
Ignoring the annual report because the company was dormant. A dormant OÜ still files. Non-filing leads to fines and, ultimately, forced deletion from the register.
Pricing
- Monthly bookkeeping packages from €79/month
- Annual-report-only service €50 per hour for a standard company. €80 per hour for companies with crypto activity.
- CFO, controlling and financial forecasting hourly, quoted per engagement
FAQ
Does an e-resident company need a local Estonian accountant? Not by law, but the annual report must be prepared under Estonian accounting standards and filed in the Estonian Business Register in the prescribed format. An Estonian accountant is the practical route for almost every foreign owner.
Do I pay tax in Estonia if I live elsewhere? Your company pays Estonian corporate income tax only on distributed profit. You personally pay tax where you are tax resident. e-Residency itself does not create Estonian tax residency, but spending 183 days or more in Estonia within 12 months generally does.
When does my company have to register for VAT? When taxable turnover in Estonia exceeds €40,000 in a calendar year, registration is compulsory. Voluntary registration is possible earlier and is often sensible for B2B companies.
What happens if I file the annual report late? The Business Register issues warnings, then fines, and can ultimately initiate deletion of the company. Late filing also damages credibility with banks and payment providers.
Can you help me switch accountants mid-year? Yes. We take over at any point in the financial year, review what was filed before and correct what needs correcting.