Estonia: Two Bills relating to taxation passed the first reading in the Riigikogu

NordenBladet — A total of two Bills were at the first reading.

The Bill on Amendments to the Land Tax Act and the Taxation Act (285 SE), initiated by the Government.

The Bill will establish the basis for the transfer of the land tax information system from the Land Board to the Tax and Customs Board and will solve the problem that has arisen in practice where it is impossible to issue a land tax notice to successors of land who have not re-registered the right of ownership of land in the land register. In addition, the Land Tax Act will be brought into conformity with the State Assets Act according to which the responsibility to pay the taxes related to the assets lies with the user of the state assets. The Bill will specify the right of the Tax and Customs Board to forward information on the tax liability of a taxable person to a rural municipality or city government as necessary.

The Tax and Customs Board is the land tax administrator. It calculates the payable land tax amount based on the underlying data submitted by a local authority through the land tax information system. At present, the Ministry of Finance is the controller of the land tax information system, and the Land Board is the processor. As the Tax and Customs Board is the land tax administrator, the land tax information system should be located in the Tax and Customs Board and not in the Land Board and it should be integrated with the application established for the calculation of land tax. The amendment supports the implementation of the governance reform, as it will organise the current systems, will help avoid duplication and will make local governments’ tasks relating to land tax simpler, more functional, more transparent and more convenient.

A problem that has arisen in practice will also be solved. At present, it is possible for successors to avoid payment of land tax if the right of ownership of land has been transferred to them in the course of succession but they have not submitted an application to amend the entry for the owner in the land register to the registrar of the land register. In order to avoid such a situation, in the future, it would also be possible for the Tax and Customs Board to issue a land tax notice to the successor of land to whom the right of ownership of land has transferred according to the succession register.

The Bill on Amendments to the Act on the Ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (286 SE), initiated by the Government.

The Bill will correct some technical errors in the Act. The amendment will bring the Estonian text of the ratification Act into conformity with the original English text of the notifications and reservations.

The Bill will amend the data on the agreement with Belarus in the table of the agreements for the avoidance of double taxation in respect of which Estonia wishes to apply the convention. Under another amendment, the Act will be amended by including a notification according to which Estonia will begin to apply the convention in respect of the taxes covered by tax treaties from the beginning of a calendar year.

The convention was ratified in the Riigikogu on 4 December 2019 but it has not yet entered into force for Estonia. After the entry into force of the amendments, Estonia will be able to submit its instrument of ratification to the depositary of the convention and the convention will be able to enter into force for Estonia. The Convention will enter into force for Estonia on the first day of the month following the expiration of three months after the date of the deposit of its instrument of ratification.

Minister of Finance Martin Helme replied to the interpellation concerning the activities of Enefit Green Ltd, subsidiary of Eesti Energia Ltd (No. 44), submitted by members of the Riigikogu.

During the open microphone, Kristina Šmigun-Vähi took the floor.

 

Source: Parliament of Estonia

 



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