Estonian CIT 2026 — when it pays off, and when it doesn't
- #CIT
- #taxes
- #Estonian CIT
The core idea
Estonian CIT (officially: ryczałt od dochodów spółek — note: this is a Polish tax regime, not Estonian) is only paid when the company distributes profit to shareholders. As long as you reinvest, there is no CIT. Rates: 10% for small taxpayers, 20% for the rest — applied to the dividend amount paid out.
Who can opt in
- a capital company or limited partnership,
- shareholders are exclusively individuals,
- less than 50% of revenue from passive sources (rent, interest, royalties),
- at least 3 people on employment contracts,
- no holdings in other companies.
Each of these conditions tends to become a trap. The most common issue: a shareholder also runs a JDG (sole proprietorship) that invoices their own company. After moving to Estonian CIT, that often qualifies as "passive income".
When it pays off
- The company retains most of its profit (for investment, growth).
- Shareholder salaries are low or absent.
- The company doesn't distribute dividends more than once every 2–3 years.
When it doesn't
- A shareholder draws money every month — every payout is taxed as a dividend.
- You plan to sell shares within 2 years — some benefits are clawed back retroactively.
- You have heavy depreciation — under Estonian CIT it effectively "disappears".
The trap nobody talks about
Exiting Estonian CIT is almost never tax-neutral. You have to compute transformation income — that's often an unpleasant surprise.
Before deciding, run a 3-year projection with your accountant. If you'd like our team to do it — leave your details in the form.