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Estonia: The Riigikogu passed the agreement for the elimination of double taxation with Guernsey

NordenBladet — Today, the Riigikogu passed with 67 votes in favour the Act on the Ratification of the Agreement between the Republic of Estonia and Guernsey for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance, initiated by the Government.

The purpose of the agreement for the elimination of double taxation (116 SE) is to facilitate investments between Estonia and Guernsey. Compared to national legal acts, the agreement as an international legal act provides investors with greater legal certainty with regard to the elements of the tax system that are regulated by the agreement, because amendment of an international agreement is more time-consuming than amendment of a national legal act. To achieve the purpose, the agreement between Estonia and Guernsey for the elimination of double taxation limits the income taxes that the country of the source of income can establish for the residents of the other country, ensures equal treatment of persons and eliminates potential double taxation. The agreement also establishes an obligation of mutual exchange of information which creates additional possibilities for prevention of tax avoidance.

The entry into force of the agreement will bring about a positive impact on taxpayers who receive income from Guernsey that is subject to tax in both jurisdictions with no tax agreement in place. The agreement provides no additional opportunities for taxation for the countries, but it restricts the existing taxation rights that have been established under national law. Estonia has concluded the agreements for the elimination of double taxation with 59 countries.

A Bill passed the first reading in the Riigikogu: 

The Bill on Amendments to the Fishing Act (136 SE), initiated by the Rural Affairs Committee, which will amend the provisions on the organisation of fishing and establish an annual catch of vendace and Lake Peipus smelt for pound nets and smelt traps on Lake Peipus. The establishment of an annual catch for a fishing gear will allow to allocate fishing efforts more evenly during the fishing season and will provide fishers with the stability to catch their catch in the designated quantity.

With the amendment, it will be possible to introduce on Lake Peipus the organisation of fishing similar to that in use for pound net catching of Baltic herring in Pärnu County. Annual catches per pound net have been established in Pärnu County starting from 2014. It is an individual quota system with an analogous principle that operators have a fixed quota for each fishing gear. The difference from individual quota lies in that the annual catch cannot be transferred or rented separately from fishing gear, and historical fishing rights do not apply to it.

A Bill passed the second reading in the Riigikogu:

The Bill on Amendments to the Sport Act and Amendments to Other Associated Acts (105 SE), initiated by the Government, will organise the procedure for the payment of grants and allowances to athletes, and will help combat betting fraud and the use of doping.

According to the Bill, athlete’s grant may be paid tax-free to an athlete to a total extent of up to 12 times the minimum monthly wage in a calendar year. The limit will organise the current procedure for the payment of grants, because in practice tax-free grants are also paid to athletes in the case of an employment relationship. In such cases, state taxes are not paid and the athletes have no social guarantees either. Athlete’s allowance may be paid tax-free to an athlete to the extent of up to two times the minimum monthly wage in a month, provided that a contract of employment or another contract under the law of obligations has been entered into with him or her. No grant may be paid in such a case.

The Bill will amend the provision concerning doping crimes in the Penal Code. Prescribing a substance or a method, inducing a person to use a substance or a method and assisting in the use of a substance or a method, and carriage of substances across a state border or manufacturing, producing, marketing, mediating or trafficking thereof will be deemed to be criminal offences. Under the current procedure, a punishment can be imposed only in the case of inducing a person to use a medicinal product as doping.

With a view to fighting against the manipulation of sports competitions, the Bill provides for the establishment of a contact point to train and inform the relevant organisations in regard to the fight against the manipulation of sports competitions. The Estonian Anti-Doping and Sports Ethics Foundation will implement these tasks.

The amendments will include among the elements of the Estonian sports register a sub-database to consolidate the sports results achieved in Estonian and international title events. The database will be an important tool in distributing public funds and making sports policy decisions. The results of amateur sports and exercise competitions will not be gathered into the database.

On the proposal of the Cultural Affairs Committee, the date of entry into force of the Act will be changed. Under the Bill, the Act will come into force on 1 March 2020.

During the debate, Aadu Must (Centre Party) took the floor.

 

Source: Parliament of Estonia

 


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