Estonia

Economy

As a member of the European Union, Estonia is part of the world's largest economic zone. In 1999, Estonia experienced its worst year economically since it regained independence in 1991, largely because of the impact of the August 1998 Russian financial crisis. Estonia joined the WTO in November 1999 ? the second Baltic state to join ? and continued its EU accession talks. Privatization of energy, telecommunications, railways, and other state-owned companies is a continuing process. With assistance from the European Union, the World Bank and the Nordic Bank, Estonia completed most of its preparations for EU membership by the end of 2002 and now has one of the strongest economies of the new members states of the European Union, which Estonia joined on 1 May 2004. The Estonian economy is growing fast, partly due to a number of Scandinavian companies relocating their routine operations and Russian oil transit using Estonian ports. Estonia has a strong information technology (IT) sector. GDP PPP per capita is at $16,461, the highest among the Baltic states.

Related Topics:
European Union - 1999 - 1991 - 1998 - WTO - EU - Privatization - Telecommunications - World Bank - Nordic Bank - 2002 - 1 May - 2004 - Scandinavia - Russia - Information technology - GDP PPP per capita - Baltic states

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In 1994, Estonia became among the first in the world to adopt a flat tax, with a uniform rate of 26% regardless of the income a person makes. In January 2005 the personal income tax rate was reduced to 24%.

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Since January 1, 2000, companies have not had to pay income tax on re-invested income. However, tax is due on profit distributions (incl. hidden distributions) at a rate of 24%.

Related Topics:
January 1 - 2000

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