The company inquired whether after it’s merger pursuant to art. 44c of the Accounting Act in 2021, it may, as of 2022, opt for lump-sum taxation on income of capital companies (Estonian CIT), by submitting in 2021 a notification on the intent to enter the Estonian CIT regime while meeting all conditions of the CIT Act, and without reason for the exclusion from this method of taxation. The tax authorities claimed that the company which plans to merge in 2021 with a limited partnership undergoes the exemption referred to in art.28k sec. 1 pkt. 5 letter a of the CIT Act, i.e. the company many not enter the Estonian CIT system in 2021.
The company contended that the transitional provision of Art. 9 of the Act from November 29, 2020, amending the Corporate Income Tax Act and several other acts, which does not contain the condition implying that taxation on income should start in 2021, should be applied in their case. Hence, it is wrong to assume that the condition for opting for Estonian CIT is both the submission of the ZAW_RD in 2021, and the taxation of income with a lump sum on income of capital companies during 2021.
In matters raising interpretation doubts, it is worth referring the case in the form of a request for individual intepretationns, or for consideration by administrative courts.
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