Walless Tax Cookie: The draft Estonian Security Tax Act raises concerns

From January 1, 2026, to December 31, 2028, a 2% income tax on annual corporate profits will be introduced, in addition to Estonia’s existing distribution tax.

However, the draft leaves many open questions, such as whether profits will be taxed on a consolidated or non-consolidated basis and how double taxation will be handled for entities using the equity accounting method for investments in Estonian affiliates. It also lacks rules on tax depreciation, amortization, or loss carryforward. The draft may still change before the Parliament passes it.