Peer Review Report: Phase 1 - Estonia

Global Forum on Transparency and Exchange of Information GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
for Tax Purposes

OF INFORMATION FOR TAX PURPOSES
PEER REVIEWS, PHASE 1: ESTONIA
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
multilateral framework within which work in the area of tax transparency and exchange
of information is carried out by over 100 jurisdictions which participate in the work of the
Global Forum on an equal footing.
Peer Review Report
The Global Forum is charged with in-depth monitoring and peer review of the
implementation of the standards of transparency and exchange of information for tax
Phase 1
purposes. These standards are primarily reflected in the 2002 OECD Model Agreement
on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the
Legal and Regulatory Framework
OECD Model Tax Convention on Income and on Capital and its commentary as updated in
2004, which has been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant
information for the administration or enforcement of the domestic tax laws of a requesting
ESTONIA
party. “Fishing expeditions” are not authorised, but all foreseeably relevant information
must be provided, including bank information and information held by fiduciaries,
regardless of the existence of a domestic tax interest or the application of a dual
Peer Review Report Phase 1 Legal and Regulatory Framework ESTONIA

criminality standard.
All members of the Global Forum, as well as jurisdictions identified by the Global Forum
as relevant to its work, are being reviewed. This process is undertaken in two phases.
Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory framework for
the exchange of information, while Phase 2 reviews look at the practical implementation of
that framework. Some Global Forum members are undergoing combined – Phase 1 plus
Phase 2 – reviews. The ultimate goal is to help jurisdictions to effectively implement the
international standards of transparency and exchange of information for tax purposes.
All review reports are published once approved by the Global Forum and they thus
represent agreed Global Forum reports.
For more information on the work of the Global Forum on Transparency and Exchange of
Information for Tax Purposes, and for copies of the published review reports, please visit
www.oecd.org/tax/transparency.
Please cite this publication as:

OECD (2011), Global Forum on Transparency and Exchange of Information for Tax Purposes
Peer Reviews: Estonia 2011: Phase 1: Legal and Regulatory Framework, Global Forum on
Transparency and Exchange of Information for Tax Purposes: Peer Reviews, OECD Publishing.
http://dx.doi.org/10.1787/9789264108752-en
This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical
databases. Visit www.oecd-ilibrary.org, and do not hesitate to contact us for more information.
ISBN 978-92-64-10874-5
www.oecd.org/publishing
23 2011 19 1 P -:HSTCQE=VU]\YZ:
232011191cov-ESTONIA.indd 1 11-Apr-2011 10:29:29 AM
Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
Estonia 2011
PHASE 1
April 2011
(reflecting the legal and regulatory framework
as at January 2011)
This work is published on the responsibility of the Secretary-General of the OECD.
The opinions expressed and arguments employed herein do not necessarily reflect
the official views of the OECD or of the governments of its member countries or
those of the Global Forum on Transparency and Exchange of Information for Tax
Purposes.

OECD (2011), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer
Reviews: Estonia 2011: Phase 1, OECD Publishing.
http://dx.doi.org/10.1787/9789264108752-en
ISBN 978-92-64-10874-5 (print)

ISBN 978-92-64-10875-2 (PDF)
Series: Global Forum on Transparency and Exchange of Information for Tax Purposes: Peer Reviews
ISSN 2219-4681 (print)
ISSN 2219-469X (online)
Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.

© OECD 2011
You can copy, download or print OECD content for your own use, and you can include excerpts from OECD
publications, databases and multimedia products in your own documents, presentations, blogs, websites and
teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given.
All requests for public or commercial use and translation rights should be submitted to rights@oecd.org
Requests for permission to photocopy portions of this material for public or commercial use shall be addressed
directly to the Copyright Clearance Center (CCC) at info@copyright.com or the Centre français d’exploitation du
droit de copie (CFC) at contact@cfcopies.com.
TABLE OF CONTENTS – 3
Table of Contents
About the Global Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Information and methodology used for the peer review of Estonia. . . . . . . . . . . . 9
Overview of Estonia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Compliance with the Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
A. Availability of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
A.1. Ownership and identity information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
A.2. Accounting records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
A.3. Banking information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
B. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
B.1. Competent Authority’s ability to obtain and provide information . . . . . . . . 38
B.2. Notification requirements and rights and safeguards. . . . . . . . . . . . . . . . . . 44
C. Exchanging Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
C.1. Exchange of information mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
C.2. Exchange of information mechanisms with all relevant partners . . . . . . . . 56
C.3. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
C.4. Rights and safeguards of taxpayers and third parties. . . . . . . . . . . . . . . . . . 60
C.5. Timeliness of responses to requests for information . . . . . . . . . . . . . . . . . . 61
Summary of Determinations and Factors Underlying Recommendations. . . . 63
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – ESTONIA © OECD 2011
4 – TABLE OF CONTENTS
Annex 1: Jurisdiction’s Response to the Review Report . . . . . . . . . . . . . . . . . . 67

Annex 2: List of All Exchange-of-Information Mechanisms in Force . . . . . . . 68
Annex 3: List of all Laws, Regulations and Other Material Received . . . . . . . 71
Annex 4: Overview of Laws and Other Relevant Factors for Exchange
of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ABOUT THE GLOBAL FORUM – 5
About the Global Forum
The Global Forum on Transparency and Exchange of Information for Tax

Purposes is the multilateral framework within which work in the area of tax
transparency and exchange of information is carried out by over 90 jurisdic-
tions, which participate in the Global Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer review of
the implementation of the international standards of transparency and exchange
of information for tax purposes. These standards are primarily reflected in the
2002 OECD Model Agreement on Exchange of Information on Tax Matters
and its commentary, and in Article 26 of the OECD Model Tax Convention on
Income and on Capital and its commentary as updated in 2004. The standards
have also been incorporated into the UN Model Tax Convention.
The standards provide for international exchange on request of foresee-
ably relevant information for the administration or enforcement of the domes-
tic tax laws of a requesting party. Fishing expeditions are not authorised but
all foreseeably relevant information must be provided, including bank infor-
mation and information held by fiduciaries, regardless of the existence of a
domestic tax interest.
All members of the Global Forum, as well as jurisdictions identified by
the Global Forum as relevant to its work, are being reviewed. This process is
undertaken in two phases. Phase 1 reviews assess the quality of a jurisdiction’s
legal and regulatory framework for the exchange of information, while Phase 2
reviews look at the practical implementation of that framework. Some Global
Forum members are undergoing combined – Phase 1 and Phase 2 – reviews.
The ultimate goal is to help jurisdictions to effectively implement the interna-
tional standards of transparency and exchange of information for tax purposes.
All review reports are published once adopted by the Global Forum.
For more information on the work of the Global Forum on Transparency
and Exchange of Information for Tax Purposes, and for copies of the pub-
lished review reports, please refer to www.oecd.org/tax/transparency.
EXECUTIVE SUMMARY – 7
Executive Summary
1. This report summarises the legal and regulatory framework for trans-
parency and exchange of information in Estonia. The international standard
which is set out in the Global Forum’s Terms of Reference to Monitor and
Review Progress Towards Transparency and Exchange of Information, is
concerned with the availability of relevant information within a jurisdiction,
the competent authority’s ability to gain timely access to that information,
and in turn, whether that information can be effectively exchanged with its
exchange of information (EOI) partners. While Estonia has a developed legal
and regulatory framework, the report identifies a number of areas where
Estonia could improve its legal infrastructure to more effectively implement
the international standard. The report includes recommendations to address
these shortcomings.
2. Estonia is a small European country with a diverse economy, mainly
based on services (including transport) and industry. Despite the successful
monetary reform, banking activities and the local financial sector are very
small. Finland and Sweden are the most important trade partners and inves-
tors. Estonia became an European Union Member State in 2004 and recently
joined the OECD at the end of 2010. Since January 2011, the official currency
in Estonia is the Euro.
3. Estonia has an extensive treaty network of 49 double tax conventions
(DTCs) that allows for exchange of information for tax purposes with all
relevant partners. Estonia has also initialled five other DTCs and two proto-
cols. These DTCs generally meet the international standard, but the identi-
fied shortcomings in Estonia’s domestic legislation mean that in some cases
Estonia will not be able to comply fully with the DTCs’ terms. In addition to
its treaty network, Estonia is also able to exchange information with other EU
Member States based on EU legislation. Estonia has not refused to enter into
an exchange of information agreement with any Global Forum member.
4. As regards availability of relevant information, Estonia’s legislation
generally meets the international standard. There are consistent disclosure
obligations imposed directly on all legal persons (including companies, partner-
ships, commercial associations and foundations) to retain certain ownership,
8 – EXECUTIVE SUMMARY
identity, accounting and banking information, and in many instances to provide

that information to public authorities. This is complemented by obligations
imposed under Estonia’s anti-money laundering framework applicable to credit
and financial institutions, as well as service providers (including notaries,
auditors, accountants and attorneys-at-law), creating a second layer of require-
ments to capture relevant information. Under Estonian law, it is possible to hold
securities under a nominee account, but nominees are required to maintain
records on the identity of the legal owners of the securities. Bearer shares are
not allowed in Estonia.
5. The obligations imposed in respect of accounting records are satis-
factory, with sufficient specificity in respect of the precise information to be
maintained. All legal persons are required to keep accounting records and
underlying documents for at least seven years, whereas credit and financial
institutions and other relevant service providers are required to maintain
transaction records for at least five years after the end of a contractual rela-
tionship with a client.
6. In respect of access to information, Estonia’s competent authority –
the Tax and Customs Board – is vested with broad powers to gather relevant
information for civil and criminal tax purposes, complemented by powers
to obtain oral and written information from a taxable person or third party,
search premises, seize information and inspect property. No special proce-
dures, court order or consent from other authorities are required. Enforcement
of these provisions is secured by the existence of significant penalties for non-
compliance. No domestic interest requirement exists for Estonia’s competent
authority to exercise their information gathering powers.
7. However, a noteworthy shortcoming has been identified in respect
of the Estonian competent authority’s access powers. Even though domestic
secrecy provisions are overridden by DTCs, the conditions for accessing
banking information are more restrictive than the international standard in
respect of establishing the identity of the subject of an EOI request. Estonia
has advised that it is not their administrative practice to restrict the access
and exchange of bank information through this requirement and that it has in
fact engaged in information exchange through its EOI arrangements without
these restrictions. It is recommended that Estonia amends its legal framework
to fully comply with the international standard. This issue should be given
additional scrutiny during the Phase 2 Peer Review of Estonia, which, given
these special circumstances, can take place as scheduled.
8. Recommendations have been made in respect of identified deficien-
cies. Estonia’s response to the recommendations in this report, as well as the
application of the legal framework to the practices of its competent authority
will be considered in detail in the Phase 2 Peer Review of Estonia which is
scheduled for the first half of 2013.
INTRODUCTION – 9
Introduction
Information and methodology used for the peer review of Estonia
9. The assessment of the legal and regulatory framework of Estonia

was based on the international standards for transparency and exchange of
information as described in the Global Forum’s Terms of Reference, and was
prepared using the Global Forum’s Methodology for Peer Reviews and Non-
Member Reviews. The assessment was based on the laws, regulations, and
exchange of information mechanisms in force or effect as at January 2011,
other materials supplied by Estonia, and information supplied by partner
jurisdictions.
10. The Terms of Reference break down the standards of transparency
and exchange of information into ten essential elements and 31 enumerated
aspects under three broad categories: (A) availability of information; (B)
access to information; and (C) exchanging information. This review assesses
Estonia’s legal and regulatory framework against these elements and each of
the enumerated aspects. In respect of each essential element, a determination
is made that either (i) the element is in place, (ii) the element is in place but
certain aspects of the legal implementation of the element need improvement,
or (iii) the element is not in place. These determinations are accompanied by
recommendations on how certain aspects of the system could be strength-
ened. A summary of the findings against those elements is set out on pages
45-46 of this report.
11. The assessment was conducted by a team which consisted of two
assessors: Dr. Katja Gey, Coordinator for International Negotiations in
Financial and Tax Matters, Government of the Principality of Liechtenstein,
and Mr. Süleyman Hayri Balci, Acting Head of Group, Ministry of Finance of
Turkey; and two representatives of the Global Forum Secretariat: Mrs. Renata
Fontana and Mr. Guozhi Foo. The assessment team examined the legal and
regulatory framework for transparency and exchange of information and rel-
evant exchange of information mechanisms in Estonia.
10 – INTRODUCTION
Overview of Estonia
Governance and economic context

12. The Republic of Estonia is a state in the Baltic Region of Northern
Europe. The territory of Estonia covers 45 227 km2 and it is bordered by the Gulf
of Finland (north), the Baltic Sea (west), Latvia (south) and the Russian Federation
(east). The sole official language, Estonian, is closely related to Finnish. After
many years under the Soviet Union’s control, Estonia regained its independence
in 1991. It has since embarked on a rapid programme of social and economic
reform. Estonia was amongst a group of ten countries which were incorporated
into the European Union in 2004, becoming one of the 27 EU Member States.1
Estonia is a democratic parliamentary republic and is divided into fifteen coun-
ties. The capital and largest city is Tallinn. With a population of only 1.34 million,
Estonia is one of the least-populous members of the European Union.
13. The Estonian economy is diverse: more than 67% of the Estonian GDP
is derived from the service sectors (including transport), industrial sectors yield
over 28% and primary branches (including agriculture) approximately 5.5% of
the overall output. Finland and Sweden are the most important trade partners
and investors. Since January 2011, the official currency in Estonia is the Euro.
The successful monetary reform also meant swift changes in banking and in the
financial sector as a whole; the local financial sector is nevertheless very small.
General information on the legal system and taxation system

14. Estonia’s legal system is based on the Continental European civil
law model and has been influenced by the German legal system. Unlike
common law countries, Estonia has detailed codifications and issues are
1. Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia,

Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia,
Slovenia, Spain, Sweden and the United Kingdom. Regarding Cyprus – note by
Turkey: The information in this document with reference to “Cyprus” relates to
the southern part of the Island. There is no single authority representing both
Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish
Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is
found within the context of the United Nations, Turkey shall preserve its position
concerning the “Cyprus issue”. Note by all the European Union Member States
of the OECD and the European Commission: The Republic of Cyprus is recog-
nised by all members of the United Nations with the exception of Turkey. The
information in this document relates to the area under the effective control of the
Government of the Republic of Cyprus.
INTRODUCTION – 11
solved according to the codifications. Estonian law is basically divided into

(i) private law, consisting of civil law and commercial law, and (ii) public
law, consisting of international law, constitutional law, administrative law,
criminal law, financial law and procedural law. The hierarchy of laws stands
as follows: (i) EU law; (ii) the Estonian Constitution; (iii) international law;
(iv) laws enacted by Parliament; (v) administrative regulations adopted by the
executive branch including local governments; and (vi) administrative deci-
sions made by the executive branch including local governments.
15. The Estonian tax system is mainly based on the Taxation Act which
establishes requirements for tax and administrative acts, rights, duties and
liabilities of taxpayers, withholding agents, guarantors and tax authorities. It
also sets procedures for resolution of tax disputes and main definitions used in
all tax acts. The tax authority for state taxes in Estonia is the Tax and Customs
Board which is a government agency operating within the area of government
of the Ministry of Finance. Local governments have the authority to impose
local taxes, but effectively only few municipalities have introduced local taxes.
16. The Estonian state taxes are: income tax (21% flat rate for individu-
als and companies, resident or non-resident of Estonia), social tax, land tax,
gambling tax, value added tax, customs duty, excise duties and heavy goods
vehicle tax. In Estonia, a conceptual difference compared to more traditional
income tax systems is that instead of taxing the profit of resident corporations
and registered permanent establishments upon accrual, profit distributions
(as well as transactions that can be treated as hidden distribution of profits)
are taxed. As a result, income tax shifts from earned profits to distributed
profits. Unemployment insurance contributions and contributions to manda-
tory funded pension are technically not taxes but are administered as such.
The local taxes imposed by a few rural municipalities or city councils in
their administrative territory are: sales tax, boat tax, advertisement tax, tax
on closure of streets and roads, motor vehicle tax, entertainment tax, tax for
keeping the animals and parking charge.
Overview of commercial laws and other relevant factors for

exchange of information
17. Most legal entities founded according to Estonian laws, including
private and public limited companies, general and limited partnerships, are
governed by the Commercial Code and must be entered in the commercial
register. Those legal entities are asked to provide the same information about
ownership, notwithstanding their owners. Foreign companies with a branch in
Estonia must be registered at the commercial register, whereas foreign com-
panies with other types of permanent establishments in Estonia must be reg-
istered in the Tax and Customs Board’s taxpayers register. Foundations must
be entered in the non-profit associations and foundations register. Estonia
12 – INTRODUCTION
does not have domestic trust laws and general and limited partnerships are
corporate bodies under the Commercial Code. Entries in the commercial
register are public and everyone has the right to examine the card register and
the business files, and to obtain copies of registry cards and of documents in
the business files.
Overview of the financial sector and relevant professions

18. The Bank of Estonia founded in 1919 operates as Estonia’s central
bank. The bank did not exist during the years of the Soviet occupation (start-
ing in 1940) and it was restored in 1990. The Bank of Estonia is responsible
for the stability of the financial system. Initially the Bank of Estonia carried
out supervision of commercial banks but since 2002 this task belongs to the
Financial Supervision Authority which is responsible for the supervision of a
number of Estonian financial institutions. All Estonian financial institutions
have to be registered in the Register of Economic Activities. In addition, the
Estonian Financial Intelligence Unit, which is an independent structural unit
of the Estonian Police and Border Board, exercises supervision over fulfil-
ment of the requirements arising from the anti-money laundering framework.
19. The share of value added in the financial intermediation sector was
3,0% of GDP and 3,4% of total value added in the Estonian economy in 2009.
These shares were a bit higher during previous years, being 4,0–4,2% of total
value added and 3,5–3,8% of GDP respectively. The share of employment in
this sector was 1,7% of total employment in 2010, the average wage 167%
of the economy’s average and operating surplus over 5% of total operating
surplus in 2010.
20. The Estonian financial sector is quite bank-centred, i.e. the major-
ity of insurance, funds, leasing and investment companies belong to banks.
Most of the banks in their turn are owned by foreign capital, which is largely
of Scandinavian origin (mainly Swedish and Danish). Foreign capital domi-
nates also in insurance, either through direct or indirect holdings. A number
of Estonian securities are registered in the Estonian Central Register of
Securities, including the shares of public limited companies, units of invest-
ments funds listed in stock exchange and pension fund units. Transactions
take place either over-the-counter or in the Tallinn Stock Exchange, which
was founded in 1996, operates exclusively in electronic form, and is currently
owned by NASDAQ OMX, Inc.2
2. www.nasdaqomxbaltic.com/en/exchange-information/about-us/nasdaq-omx.
INTRODUCTION – 13
Recent developments
21. Estonia became an OECD member country on 9 December 2010.
By 31 December 2011, Estonia must adopt the law provisions necessary to
comply with EU Council Directive 2010/24/EU concerning mutual assis-
tance for the recovery of claims relating to taxes, duties and other measures.
On 7 December 2010, political agreement was reached at ECOFIN on the
text of the new Directive on Administrative Cooperation in the field of taxa-
tion, providing for an overhaul of EU Council Directive 77/799/EEC of 19
December 19773 concerning mutual assistance by the competent authorities
of the Member States in the field of direct taxation (EU Mutual Assistance
Directive). The Directive will ensure that the Article 26 of the OECD Model
Tax Convention is implemented in the EU as regards the exchange of infor-
mation on request. It will thus prevent an EU Member State from refusing
to supply information concerning a taxpayer of another EU Member State
on the sole grounds that the information is held by a bank or other financial
institution.
3. This Directive came into force on 23 December 1977 and all EU members were
required to transpose it into national legislation by 1 January 1979. It has been
amended since that time.
COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION – 15
Compliance with the Standards
A. Availability of Information
Overview
22. Effective exchange of information requires the availability of reliable

information. In particular, it requires information on the identity of owners
and other stakeholders as well as information on the transactions carried out
by entities and other organisational structures. Such information may be kept
for tax, regulatory, commercial or other reasons. If the information is not kept
or it is not maintained for a reasonable period of time, a jurisdiction’s compe-
tent authority may not be able to obtain and provide it when requested. This
section of the report assesses the adequacy of Estonia’s legal and regulatory
framework on availability of information.
23. Most legal persons formed under Estonian commercial law (including
private and public limited companies, general and limited partnerships, and com-
mercial associations) must be registered in the commercial register. Foundations
must be registered at the non-profit associations and foundations register. Entries
in the commercial register and in the non-profit associations and foundations
register are public and everyone has the right to examine and to obtain copies of
registry cards and of documents in the business files. If a foreign company has
a branch in Estonia, it must be registered in the commercial register. If a foreign
company has a permanent establishment in Estonia (other than a branch), it must
be registered in the Tax and Customs Board’s taxpayers register. However, no
ownership or identity information must be kept or recorded in respect of the
owners of the foreign company. Estonia does not have domestic trust laws.
16 – COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION
24. Legal entities formed under Estonian law are asked to provide the
same ownership and identity information about the shareholders, partners,
members, founders and members of the management or supervisory boards,
notwithstanding their owners. The disclosure obligations imposed by the
Commercial Code, other legislation governing the formation and registration
of these entities, and the anti-money laundering rules applicable to credit and
financial institutions, as well as service providers, are generally sufficient to
meet the international standard. It is noted, however, that foundations are not
always required to keep a register of identity information concerning their
beneficiaries, thus this may not be systematically available to the Estonian
authorities. Penalties are generally available to enforce these obligations.
25. The obligations imposed on all legal persons in respect of accounting
records and underlying documents are generally satisfactory, with sufficient
specificity in respect of the precise information to be maintained. For those
accounting records which are required to be kept, the obligation exists to
retain them for at least seven years. The Commercial Code and Accounting
Act provide for the same obligations for companies or partnerships owned by
residents or non-residents in Estonia.
26. In respect of banking information, the Estonian anti-money laun-
dering rules applicable to credit and financial institutions, as well as service
providers, impose appropriate obligations to ensure that all records pertaining
to accounts, as well as related financial and transactional information, are
available in Estonia. In practice, compliance with those obligations is closely
monitored by the Financial Supervision Authority (hereinafter, FSA) and the
Financial Intelligence Unit (hereinafter, FIU).
A.1. Ownership and identity information
Jurisdictions should ensure that ownership and identity information for all relevant
entities and arrangements is available to their competent authorities.
Companies (ToR A.1.1)
Types of Companies
27. According to subsection 2(1) of the Commercial Code, there are sev-
eral types of legal persons in Estonia, characterised by their nature, functions
and legal status. The following types of companies can be established under
the Commercial Code:
private limited company (sections 135-220); and
public limited company (sections 221-383).
28. In Estonia, general and limited partnerships are also considered compa-
nies which must be entered in the commercial register (subsection 2(2)). Never-
theless, they will be dealt with separately, in the following parts of this section.
Information kept by public authorities

29. All the companies formed under Estonian commercial law (includ-
ing general and limited partnerships, as well as commercial associations)
must be registered in the commercial register which is maintained by the
registration departments of the county courts (subsection 2(2) and sec-
tion 22, Commercial Code). Entries in the commercial register are public,
i.e. everyone has the right to examine the card register and the business files
(including the list of shareholders, except for the addresses of shareholders),
and to obtain copies of registry cards and of documents in the business files
(sections 28, 234 and subsection 541(3), Commercial Code).
Private limited company

30. A private limited company (osaühing, OÜ) is a company which has
share capital of at least EUR 2 500 divided into private limited company
shares and which is liable for its obligations to the extent of all its assets
(sections 135 and 136). The management board must keep a list of share-
holders containing the names, addresses, personal identification codes or
registry codes of the shareholders and must promptly record any changes
in the ownership upon receipt of a notice of transfer (subsections 182(1) and
150(3)). Subsection 149(4) sets forth that a notary, who notarises the transac-
tion for transferring the shares in a private limited company, must inform the
commercial register of the transaction, unless the transfer is entered in the
Estonian Central Register of Securities (subsection 149(5)).
31. In order to enter a private limited company in the commercial regis-
ter, the management board must submit a petition to the commercial register
containing the memorandum of association, the articles of association, the
names and residences or seats of the founders of a private limited company,
information on the members of the management board, on the members of the
supervisory board, and on the auditors and procurators, if appointed (subsec-
tions 138(2) and 144(1)).
32. According to subsection 179(4) of the Commercial Code, the man-
agement board must submit to the commercial register, on an annual basis
and not later than six months after the end of the financial year, a list of
shareholders as at the date of approval of the annual report, which must be
maintained in the business file. The list must contain the names, country of
the residence or seat (instead of addresses), personal identification codes or
registry codes of the shareholders and the nominal value of their shares.
33. If so decided by the shareholders, the shares may be entered in the

Estonian Central Register of Securities. In such case, the management board
of a private limited company must ensure timely submission of correct infor-
mation provided by law to the registrar of the Estonian Central Register of
Securities (subsection 182(3)). According to the Estonian authorities, timely
submission of the relevant information means that the information has to be
provided promptly or as soon as it is reasonably possible. The number of days
which is considered timely may vary depending on specific features of each
case. Upon entry of shares in the Estonian Central Register of Securities, the
management board of the private limited company must promptly notify the
commercial register (subsection 182(4)).
Public limited company

34. A public limited company (aktsiaselts, AS) is a legal person which
has share capital of at least EUR 25 000 divided into public limited company
shares and which is liable for its obligations to the extent of all its assets (sec-
tions 221 and 222). Upon formation, a public limited company must always
have its shares entered both in the Estonian Central Register of Securities
and in the commercial register (subsection 228(1), Commercial Code and
subsection 2(1)3), Estonian Central Register of Securities Act). However,
information submitted to the commercial register or to the Estonian Central
Register of Securities does not need to be submitted twice to the other regis-
ter if such information is available through a computer network (subsection
541(3), Commercial Code and subsection 8(2), Estonian Central Register of
Securities Act).
35. In order to enter a public limited company in the commercial register,
the management board must submit a petition containing the memorandum
of association, the articles of association, as well as identity information on
the company’s founders, the members of the management board, the members
of the supervisory board, the auditors and procurators, if appointed (sections
243, 244, 250 and 251, Commercial Code). Similarly, the following docu-
ments must be appended to an application to the Estonian Central Register of
Securities: (i) a list of the owners of the securities to be registered (i.e. share
register, list of shareholders, etc.); (ii) upon registration of a founded com-
pany, a transcript of the registry card from the commercial register or a
notarised transcript of the registration certificate; (iii) upon registration of
a company being founded, a notarised transcript of the memorandum of
association or foundation resolution (section 10, Estonian Central Register of
Securities Act).
36. Section 233 of the Commercial Code and subsection 4(3) of the
Estonian Central Register of Securities Act set out the ownership and identity
information to be recorded at the share register, including the name, address
and personal identification code or registry code of each shareholder, as well

as the class and nominal value of the share and the date of subscription and
acquisition of the shares. The management board of the public limited com-
pany is responsible for ensuring timely submission of correct information to
the share register (subsection 233(2)).
37. According to subsection 334(2) of the Commercial Code, the manage-
ment board must submit to the commercial register, on an annual basis and not
later than six months after the end of the financial year, a list of shareholders
with more than 10% of the voting rights as at the date of approval of the annual
report, which must be maintained in the business file. Except for the addresses
of shareholders, this information is public and can be examined through the
commercial register as the data of the business file (subsection 541(3)).
38. Pursuant to section 5 of the Estonian Central Register of Securities
Act, any Estonian or foreign person may open one or more securities
accounts in the register, on the basis of an application submitted to the reg-
istrar directly by this person or indirectly by an the account administrator,
provided it enables written reproduction and identification of that person
(subsection 11(1)). A securities account for a contractual investment fund
must be opened at the request of the management company of the fund.
Companies holding the activity licence of a professional securities market
participant and registered in a Member State of the European Union or in a
country which Estonia has an agreement of mutual legal assistance in force
may be account administrators (subsection 32(2)).
39. An account administrator is responsible for ensuring that information
necessary for the performance of register acts is communicated to the regis-
trar on time (subsection 31(2)). The owner of a securities account must notify
the account administrator promptly of any changes in the information submit-
ted by the owner upon opening the securities account (subsection 11(3)). The
following ownership and identity information must be entered in the register
with regard to a securities account: (i) name and address of the owner of the
securities account; (ii) if a natural person, the personal identification code or,
in the absence thereof, date of birth; (iii) if a legal person, a reference to the
register in which the legal person is registered, and its registry code; (iv) the
number of the bank account held by the owner of the securities account and
the name of the credit institution in which this bank account is held; amongst
other relevant information.
39. The Tax and Customs Board may access and obtain extracts from such
information in connection with proceedings concerning tax matters and for the
purposes of performing obligations arising from the law (subsection 7(3)6)). In
accordance with subsection 7(7) of the Estonian Central Register of Securities
Act, the registrar must, to the extent and pursuant to the procedure established
by the Minister of Finance, submit regular consolidated reports to the Tax and
Customs Board, the Financial FSA and the Ministry of Finance concerning
the ownership and identity information of owner of securities. This includes
the name, address and personal identification code or registry code (or alterna-
tively, the date of birth) of the owners of the securities, as well as the number
of respective securities registered in the securities account opened in the
name of each person included in the list of owners of the securities. Therefore,
sufficient ownership and identity information is kept by the Estonian public
authorities in respect of the owners of securities in public limited companies.
40. There are obligations for Estonia to report on major shareholdings of
public companies stipulated in the Securities Market Act (SMA), based on EU
directive 2004/109/EC of the European Parliament and Council on the harmo-
nisation of transparency requirements in relation to information about issuers
whose securities are admitted to trading on a regulated market and amending
Directive 2001/34/EC. Estonia has advised that it has fully harmonized these
directives without any significant exemptions.
Foreign company
41. According to section 6(2) of the Income Tax Act, a legal person is a
resident of Estonia if established pursuant to Estonian law. European public
limited companies (SE) and European associations (SCE) with a registered
office in Estonia are also considered residents therein. The place of effective
management is not a criterion for determining residence for tax purposes
under Estonian tax law. However, if a non-resident company is effectively
managed in Estonia, this may give rise to a permanent establishment in
Estonia (subsection 7(1)2), Income Tax Act).
42. According to section 384 of the Commercial Code, if a foreign com-
pany permanently offers goods or services in its own name in Estonia, it must
enter a branch in the commercial register. A branch is not a legal person and
the foreign company will be liable for the obligations arising from the activi-
ties of the branch. The foreign company must appoint one or more natural
persons with active legal capacity as directors of the branch and at least one
director must be in Estonia, in a member country of European Economic
Area or in Switzerland (subsection 385(1)).
43. The branch of a foreign company must be entered in the commercial
register of its location on the petition of the director of the branch (subsection
386(1)). Section 387 stipulates the information and documents which must
be entered in the commercial register, including the names and personal
identification codes of the managers and directors of the branch, as well as of
the legal representatives of the foreign company. However, it is noted that no
ownership or identity information must be recorded at the commercial regis-
ter in respect of the legal or beneficial shareholders of the foreign company.
44. The Estonian authorities indicated that the annual report which must
be submitted by the director of a branch of a foreign company to the commer-
cial register usually contains information about the owners of the companies
(subsection 388(2), Commercial Code). Nevertheless, it is unclear whether
this provision is sufficient to ensure that ownership information on foreign
companies with a branch in Estonia is systematically available to the Estonian
competent authorities in all cases.
45. If not entered in the commercial register as a branch, foreign legal
persons commencing economic activities in Estonia through a permanent
establishment must be registered in the regional structural unit of the Tax
and Customs Board prior to the commencement of its activities (subsec-
tion 18(1)4), Taxation Act). Likewise, partnerships, communities and other
associations of persons or pools of assets without the status of a legal person
which are commencing economic activities in Estonia through a permanent
establishment are also required to register at the Tax and Customs Board
(subsection 18(1)4) and 18(11)2), Taxation Act).
46. Upon application, the following ownership and identity informa-
tion must be disclosed to the Tax and Customs Board: (i) name, address,
place of registration and code (if existent) of the foreign legal person (but no
ownership or identity information must be recorded in respect of the legal
or beneficial shareholders of the foreign company); (ii) names and addresses
of the members or co-owners with management rights of the partnerships,
communities and other associations of persons or pools of assets without
legal personality; (iii) number of the bank account opened for the perma-
nent establishment and the name of the credit institution in which the bank
account is held; and (iv) name of the person responsible for the permanent
establishment, and his or her personal identification code (or, in the absence
of a personal identification code, date of birth) and residence (sections 21 and
211, Taxation Act). In the event of any changes, the Tax and Customs Board
must be notified within five working days (section 23).
47. Companies formed outside of Estonia are not required to provide
information identifying their owners as a part of registration requirements
even if they are effectively managed therein. Therefore, the availability of
information that identifies the owners of such foreign companies will gener-
ally depend on the law of the jurisdiction in which the company is formed and
it may not be available to Estonian competent authorities in all cases.
Tax Requirements
48. Estonia has advised that domestic tax laws in Estonia do not impose
any obligations for taxable persons (i.e. taxpayers and withholding agents,
including companies, partnerships and foundations) to furnish on a regular
basis information on the identities of their shareholders and owners to the tax
authorities. Nevertheless, the tax authorities have the power, as described in
Part B of this report, to request for such information if the need arises.
Information kept by companies

49. The management board of a private limited company must keep a list
of shareholders, which must contain the names, addresses, personal identifi-
cation codes or registry codes of the shareholders and the nominal value of
their shares (section 182(1)). If there are foreign shareholders, other identity
information, such as birth date, address of residence or seat, and foreign per-
sonal identification code, must be recorded in the list of shareholders, in the
absence of an Estonian personal identification code (section 62). Any changes
in the ownership must be promptly recorded in the list of shareholders by the
management board upon receipt of a notice of transfer (section 150(3)).
50. The shareholders, members of the management board and super-
visory board, competent state agencies and other persons with a legitimate
interest have the right to examine the list of shareholders (section 182(2)).
Therefore, sufficient ownership and identity information in respect of the
shareholder of a private limited company is kept either by the Estonian public
authorities or by its management board and it appears that this information is
sufficiently accessible by the Estonian competent authorities.
Nominees
51. Pursuant to section 6(1) of the Estonian Central Register of Securities
Act, professional participants in the Estonian securities market have the right
to own a nominee account as a special type of securities account. Foreign
legal persons and other institutions also have the right to own a nominee
account if, according to the law applicable to them, they have the right to hold
securities in their own name and on behalf of another person.
52. A notation must be made in the commercial register indicating that
the security account is a nominee account and identifying the owner of this
account, but no information must be entered regarding the identity of the
persons who own the securities (subsection 6(6), Estonian Central Register of
Securities Act). Nominee accounts must be maintained separately for securi-
ties held on behalf of Estonian legal persons or other institutions, Estonian
natural persons, foreign legal persons or other institutions, and foreign natu-
ral persons (subsection 6(7)).
53. Nominees are required to maintain records on the securities held in
the account containing, inter alia, the following information with regard to all
persons with whom he has entered into an authorisation agreement pursuant
to which he has acquired securities: (i) name and address of the owner of the
securities; (ii) if a natural person, the personal identification code or, in the
absence thereof, date of birth; and (iii) if a legal person, a reference to the reg-
ister in which the legal person is registered, and its registry code (subsections
5(4) and 6(7)). However, it is noted that nominees are not required to maintain
records on the beneficial owner of the securities.
54. The Tax and Customs Board may access and obtain extracts from
such information for the purposes of performing obligations arising from law
and in the event they have a legitimate interest therein (subsection 7(3)6)).
The registrar must, to the extent and pursuant to the procedure established
by the Minister of Finance, submit regular consolidated reports to the Tax
and Customs Board, the FSA and the Ministry of Finance concerning the
ownership and identity information of owner of securities. This includes the
names, addresses and personal identification codes (or alternatively, date of
birth) or registry codes of the owners of the securities, as well as the number
of respective securities registered in the nominee accounts (subsection 7(7)).
Regulated activities and service providers

55. As of June 2010, there were a total of 7 credit institutions and 12
branches of foreign credit institutions operating in Estonia (i.e. banks), the vast
majority controlled by foreign shareholders. At the end of 2009, there were
also 3681 financial institutions (other than banks), including 17 savings and
loan associations, operating with majority Estonian shareholders, 8 investment
firms, operating with majority foreign shareholders, 16 management compa-
nies, 5 life insurance companies, operating with majority foreign shareholders,
9 non-life insurance companies and 5 branches of foreign non-life insurance
companies, 54 investment funds, and 23 mandatory pension funds. The FSA is
responsible for the supervision of a number of credit and financial institutions
operating in Estonia, as well as of the Estonian securities market (sections 2
and 6, Financial Supervision Authority Act). All Estonian financial institutions
have to be registered in the Register of Economic Activities.
56. As to other service providers, there were at the end of 2009, 41 interme-
diaries in the real estate business, members of the Association of Estonian Real
Estate Firms, 99 notaries listed in the Chamber of Notaries of the Republic of
Estonia, 348 auditors listed in the Estonian Board of Auditors, approximately
15 000 accountants, which belong to 1900 service providing companies, and
727 members of the Estonian Bar Association, including 467 attorneys-at-law,
138 senior assistants of an attorney-at-law, 105 assistants of an attorney-at-law
and 17 associated members.4
4. According to Article 218 of the Civil Procedure Code, all lawyers with the
qualification required (members of the Estonian Bar Association or other lawyers
57. The FIU exercises supervision over fulfilment of the requirements

arising from the Estonian Money Laundering and Terrorist Financing
Prevention Act (hereinafter, MLTFP Act) by the obligated persons, as well as
by financial institutions which are not subject to supervision by the FSA. The
MLTFP Act applies to credit and financial institutions (and foreign branches
thereof), including insurers or insurance intermediaries, management compa-
nies, investment firms, and savings and loans associations (subsection 3(1)).
The MLTFP Act also applies to notaries, auditors, accountants, attorneys,
bailiffs, and other persons (i.e. the obligated persons) who provide consulting
services if they act in the name and on account of a customer in financial or
real property transactions or if they guide planning a transaction or perform
an official act, which concerns (subsection 3(2)):
the purchase or sale of immovable property, enterprises or companies;
the management of the customer’s money, securities or other property;
the opening or managing of bank or security accounts;
the acquisition of funds necessary for the foundation, operation or
management of companies; or
the foundation, operation or management of trusts, companies or
other similar entities.
58. Credit and financial institutions, as well as service providers, and
their employees are required to comply with the identification and verifica-
tion obligations provided for in the MLTFP Act. Subsection 13(1) establishes
the obligation to perform the following due diligence measures:
identification of a client or a person participating in a transaction
on the basis of documents and data submitted by him or her and
verification of the submitted information on the basis of information
obtained from a reliable and independent source;
identification and verification of a natural person or a representative
of a legal person and the right of representation;
identification of the beneficial owner,5 including gathering informa-
tion about a legal person, trust, civil law partnership or other con-
qualified at least at the Master’s level) are allowed to represent their clients in the
court so that no further specialization in tax law is required in Estonia. The same
applies in criminal proceedings.
5. A beneficial owner is a natural person who, taking advantage of his or her influ-
ence, exercises control over a transaction, act or other person and in whose inter-
ests or favour or on whose account a transaction or act is performed (subsection
8(1), MLTFP Act).
tractual legal arrangement on the basis of information provided in

pre-contractual negotiations or obtained from another reliable and
independent source;
acquisition of information about a business relationship and the pur-
pose of a transaction; and
constant monitoring of a business relationship, including monitoring
transactions entered into during the business relationship, regular
verification of data used for identification, updating relevant docu-
ments, data or information and, if necessary, identification of the
source and origin of funds used in the transaction.
59. Therefore, credit and financial institutions, as well as service provid-
ers, must keep sufficient and updated identity information regarding their
clients, including identification of the beneficial owners.
Bearer shares (ToR A.1.2)

60. According to Estonian law, shares must always be registered, and
bearer shares are thus not allowed.
Partnerships (ToR A.1.3)
Types of Partnerships
61. Under Estonian law, general and limited partnerships are considered
legal persons, as companies (section 2(1), Commercial Code). 6 The following
types of partnerships may be established under the Commercial Code:
general partnership (sections 79-124); and
limited partnership (sections 125-134).
62. A general partnership (täisühing) is a legal person in which two or
more partners operate under a common business name and are jointly liable
for the obligations of the general partnership with all of their assets (section
79). A limited partnership (usaldusühing) is a legal person in which two or
more persons operate under a common business name, and at least one of the
persons (general partner) is liable for the obligations of the limited partner-
ship with all of the general partner’s assets, and at least one of the persons
(limited partner) is liable for the obligations of the limited partnership to
6. The Law of Obligations Act provides for another type of civil law arrangement
(seltsing), based on a contract, which is not considered as a legal person and is
transparent for tax purposes.
the extent of the limited partner’s contribution (section 125). The provisions
concerning general partnerships also apply to limited partnerships unless
otherwise provided for in the Commercial Code (section 125(2)).
Information kept by public authorities

63. Information about the identity of the partners of general or limited
partnerships, and therefore information on their ownership, is recorded
in the commercial register. The same procedural requirements and updat-
ing obligations described above under ToR A.1.1 are equally applicable to
partnerships. According to subsections 84(4) and 127(1) of the Commercial
Code, the names, personal identification codes or registry codes of the part-
ners of a general or limited partnership must be entered in the commercial
register. However, in respect of partners which are legal persons, it is noted
that no ownership or identity information must be recorded at the commer-
cial register in respect of the legal or beneficial shareholders of the partner.
Nevertheless, sufficient ownership and identity information is kept by the
Estonian public authorities in respect of the partners of a general or limited
partnership formed under Estonian law.
Trusts (ToR A.1.4)
64. Estonian law does not include the concept of trust, and trusts cannot
be set up under Estonian law. Estonia has not signed the Convention on the
Law Applicable to Trusts and on their Recognition (1 July 1985, The Hague).
There are, nevertheless, no obstacles for foreign trusts to operate in Estonia
or for Estonian individuals and legal persons to act as trustees, administrators
or protectors for foreign trusts.
Tax laws
65. The Estonian authorities have indicated they are not aware of any
cases where foreign trusts have been established or administered by Estonian
service providers. They have no experience with trustees of foreign trusts,
trust assets or income, and they are unsure how this issue would be dealt with
for tax purposes. Estonia has advised that domestic tax laws in Estonia do not
impose any obligations for taxable persons (i.e. taxpayers and withholding
agents, including individuals, companies, partnerships and foundations) to
furnish on a regular basis information on the identities of their shareholders
and owners to the tax authorities. Nevertheless, the tax authorities have the
power, as described in Part B of this report, to retrieve information directly
from taxable persons and to request information from third parties, includ-
ing credit and financial institutions, in order to ascertain facts relevant to tax
proceedings (sections 56, 57, 59(2) and 61, Taxation Act).
Anti-money laundering laws

66. The MLTFP Act applies to notaries, auditors, accountants, attorneys,
bailiffs, and other persons who provide consulting services if they act in the
name and on account of a customer in financial or real property transactions
or if they guide planning a transaction or perform an official act, which con-
cerns the management of the customer’s money, securities or other property,
and the foundation, operation or management of trusts, companies or other
similar entities, amongst other activities (subsection 3(2)5)).
67. Due diligence obligations apply to such service providers and include
the identification of the beneficial owner, including gathering information on
the ownership and control structure of a legal person, trust, civil law part-
nership or other contractual legal arrangement on the basis of information
provided in pre-contractual negotiations or obtained from another reliable
and independent source (subsection 13(1)3)). Therefore, Estonian individu-
als or legal persons who act as trustees or administrators of foreign trusts in
a professional capacity are required to keep sufficient and updated identity
information regarding their clients, including identification of the beneficial
owners.
Foundations (ToR A.1.5)

68. A foundation is a legal person in private law which has no members
and which is established to administer and use assets to achieve the objectives
specified in its articles of association. A foundation cannot be transformed
into a different legal person (section 1, Foundations Act). It may be founded
by one or several founders for an unspecified term, until stated objectives are
achieved, or for a specified term (section 5), or on the basis of a notarised will
which must contain a foundation resolution (section 7).
69. The passive legal capacity of a foundation commences as of its entry
in the non-profit associations and foundations register, and terminates as
of its deletion from the register. The registration departments of the county
courts must maintain a register of non-profit associations and foundations
located in their jurisdiction (section 75, Non-Profit Association Act and sec-
tion 591, Code of Civil Procedure). The entries in the non-profit associations
and foundations register are public, i.e. everyone has the right to examine and
to obtain copies of registry cards and of documents in the public files of non-
profit associations. However, the registry file may only be examined by any
person with a legitimate interest (section 77, Non-profit Associations Act).
70. In order to enter a foundation in the register of its location, the man-
agement board of the foundation must submit an application (section 11). The
foundation resolution and articles of association must be appended to the appli-
cation, containing: (i) the names and residences or locations and addresses of
the founders and their personal identification codes or registry codes (section
6(1)2)); (ii) the sum of money or other assets, and their value, to be transferred
to the foundation by the founders (section 6(1)3)); and (iii) the set of beneficiar-
ies (section 8(1)5)).
71. Under section 9 of the Foundations Act, a beneficiary is a person to
whom disbursements from the assets of the foundation may be made pursuant
to the articles of association of the foundation. This provision also establishes
that “if a set of beneficiaries is not determined by the articles of association,
all persons who are entitled to receive disbursements pursuant to the objec-
tives of the foundation must be deemed to be beneficiaries”.
72. It is therefore noted that there may be cases where the articles of asso-
ciation is silent about the set of beneficiaries. The Estonian authorities argued
that the management board must keep identity information concerning the
beneficiaries in order to organize the accounting of the foundation pursuant
to section 33 of the Foundations Act and the Accounting Act. However, it is
unclear whether the accounting information kept by the management board
is sufficient to ascertain the identity of the beneficiaries in all cases.
73. Members of the management board, as well as members of the super-
visory board, must be natural persons with active legal capacity (subsections
17(2) and 26(1)). The residence of at least half of the members of the man-
agement board must be in Estonia or other Member State of the European
Economic Area or in Switzerland. There are no such requirement regards
members of the supervisory board. Upon a change of the members of the
supervisory board, the management board must, within five working days,
submit an application to the register and notify of the time of the change of
the members and the basis therefore as specified in the articles of association.
A complete list of the members of the supervisory board must be appended
to the application, including their names, personal identification codes and
residences, the dates of commencement of their authority and the consent of
new members concerning membership (section 26).
Enforcement provisions to ensure availability of information

(ToR A.1.6)
74. Section 71 of the Commercial Code regulates the liability of an
undertaking regarding non-performance of an obligation to provide infor-
mation to the commercial register. It applies to public and private limited
companies, general and limited partnerships, commercial associations, and
foundations (in conjunction with section 76 of the Non-profit Associations
Act). If a person fails to submit information provided by law or submits incor-
rect information to the registrar, regardless of whether or not such informa-
tion is subject to entry in the register, the registrar may impose a fine of not
less than EUR 320, without first issuing the ruling of warning specified in the
Code of Civil Procedure.
75. Subsection 601(1) of the Code of Civil Procedure provides that if the
court has certified information on the entry of incorrect data in the commer-
cial register or non-profit associations and foundations register, or on failure
to submit data subject to entry in the register pursuant to law, the court must
make a ruling whereby the persons obligated to submit the data are ordered
to submit the correct data or file an objection against the ruling, and are cau-
tioned that failure to comply may result in the imposition of a fine. The court
may also impose a fine in other cases provided by law.
76. The management board of a private limited company is responsi-
ble for keeping a list of shareholders whereas the management board of the
public limited company is responsible for ensuring the timely submission
of correct information provided by law to the person maintaining the share
register. Non-compliance with these obligations may give rise to liability
on the members of management board (sections 187 and 315, Commercial
Code). Likewise, if the management board of a foundation submits incor-
rect information to the register, the members of the management board are
jointly liable for any damage caused thereby (section 13, Foundations Act).
The effectiveness of these measures is an issue of practice and should be dealt
with in Estonia’s Phase 2 review.
77. Pursuant to section 390 of the Commercial Code, a branch must be
deleted from the commercial register, amongst other reasons, if: (i) the branch
does not have a director and a director is not appointed within three months
after a caution by the registrar; or (ii) the director of the branch does not
submit the required annual report during the terms specified in section 388
of the Commercial Code and also does not do so during an additional term
specified by the registrar. After deletion of a branch from the register, the
foreign company may only continue its activities in Estonia as an undertaking
if it has a new branch entered in the register.
78. Under section 1348 of the Credit Institutions Act, failure by a credit
institution to make public or submit to the FSA a mandatory report, document,
explanation or other data in a timely manner, or submission of an inaccurate
or misleading information, is punishable by a fine of up to EUR 32 000. In
addition, section 57 of the MLTFP Act stipulates that the failure to comply
with the identification and verification obligation is punishable by a fine of up
to EUR 1 200. The same act, if committed by a legal person, is punishable by
a fine of up to EUR 32 000.
79. Pursuant to section 154 of the Taxation Act, failure to submit a tax
return, documents, things or other information by the due date, failure to register
with a tax authority, submission of false information or knowing submission of
incorrect documents to a tax authority, failure to comply with the requirements

for the keeping of records, failure to comply with an order of a tax authority or
obstruction of the activities of a tax authority in another manner is punishable
by a fine of up to EUR 1 200. The same act, if committed by a legal person, is
punishable by a fine of up to EUR 3 200.
80. In accordance with sections 3891 and 3892 of the Penal Code, failure
to submit information or submission of incorrect information to the tax author-
ity for the purpose of reduction of an obligation to pay a tax or to withhold
is punishable by a pecuniary punishment or up to three years imprisonment
(increased to up to five years if a tax underpayment exceeds EUR 320 000).
Conscious submission of incorrect information to the tax authority is punish-
able by a pecuniary punishment or up to five years imprisonment (increased
to up to seven years if a tax underpayment exceeds EUR 320 000).
81. The effectiveness of the enforcement provisions which are in place in
Estonia will be considered as part of the Phase 2 Peer review.
Other relevant entities and arrangement

82. Under Estonia law, commercial associations are considered legal
persons, as companies (section 2(1) of the Commercial Code) and are gov-
erned by the Commercial Associations Act.7. A commercial association
(tulundusühistu) is a company the purpose of which is to support and pro-
mote the economic interests of its members through joint economic activity
in which the members participate and which is liable for its obligations with
all of its assets. The articles of association may prescribe that the members
are jointly liable for the obligations of the association with all of their assets
(full personal liability) or are liable to the extent determined by the articles of
association (additional liability). Unless the articles of association prescribe
the personal liability of the members of the association, the share of the asso-
ciation capital shall be at least EUR 2 500.
83. The management board of a commercial association must maintain a
list of members of the association which contains in respect of each member:
(i) the residence or seat and personal identification code (or alternatively,
date of birth) or registry code; (ii) the amount, size and time of payment of
contributions; (iii) information on refund of contributions and transfer of
membership; and (iv) the date of acceptance into, exit or exclusion from the
membership of the association (section 15, Commercial Associations Act).
This ownership and identity information about the members of a commercial
7. Other types of associations exist in Estonia, i.e. apartment and building associa-
tions, but those are not considered relevant entities for the purpose of this review,
due to the specificity of their activities.
association must be registered in the list of the members and, if the articles
of association prescribe the full personal liability or additional liability of the
members of the association, also in the commercial register (subsections 8(7)
and 15(5), Commercial Associations Act).
Determination and factors underlying recommendations
Determination
The element is in place, but certain legal aspects of the legal
implementation of this element require improvement.
Factors underlying Recommendations
recommendations
Companies incorporated outside of In such cases, Estonia should
Estonia but having their effective ensure that ownership and identity
management in Estonia which gives information is available.
rise to a permanent establishment are
not required to provide information
identifying any owners as a part
of registration requirements. The
availability of information that
identifies the owners of such
companies will generally depend on
the law of the jurisdiction in which the
company is incorporated and so may
not be available in all cases.
Designation of the beneficiaries is not An obligation should be established
mandatory under the Foundations Act for foundations to ensure that
and it is unclear whether accounting information on the identity of the
information kept by the management beneficiaries is systematically
board is sufficient to ascertain the available to the competent authorities.
identity of the beneficiaries.
A.2. Accounting records

Jurisdictions should ensure that reliable accounting records are kept for all
relevant entities and arrangements.
84. The Terms of Reference set out the standards for the maintenance
of reliable accounting records and their necessary retention period. It pro-
vides that reliable accounting records should be kept for all relevant entities
and arrangements. To be reliable, accounting records should (i) correctly
explain all transactions, (ii) enable the financial position of the entity or
arrangement to be determined with reasonable accuracy at any time and
(iii) allow financial statements to be prepared. Accounting records should

further include underlying documentation, such as invoices, contracts, etc.
Accounting records must be kept for a minimum of five years.
General requirements (ToR A.2.1) and Underlying documentation

(ToR A.2.2)
85. Accounting and record keeping obligations in Estonia are primarily
governed by the Accounting Act and the Taxation Act, through which Estonia
imposes comprehensive requirements for relevant legal persons in Estonia
to maintain reliable and detailed accounting records, in accordance with
internationally accepted accounting principles, and to maintain the source
documents for these records for at least seven years. These requirements are
reinforced by the Taxation Act, which requires all entities that are taxable in
Estonia to keep accounts in accordance with the procedure provided for in the
Accounting Act.
86. The Accounting Act is applicable to “accounting entities”, defined
under subsection 2(2) as including all legal persons in private or public law, sole
proprietors, and branches of foreign companies registered in Estonia. This defi-
nition covers all the business entities recognised in Estonia, including public
and private limited companies, limited and general partnerships, commercial
and building associations, foundations, and branches of foreign companies.
87. All accounting entities are required by the Accounting Act to organ-
ise their accounts in such a way as to ensure the provision of up-to-date,
relevant, objective and comparable information concerning the financial
position, economic performance and cash flows of the entity. This includes
requirements to document all its business transactions, post and record all its
business transactions in accounting ledgers and journals, prepare and submit
annual reports and other financial statements, and preserve relevant account-
ing documents (section 4).
88. A business transaction is defined in the Accounting Act as a transac-
tion concluded by an accounting entity, a transaction between third parties, or
any other relevant event that changes the assets, liabilities or owner’s equity
of the accounting entity. An accounting entity is required to document and
record all its business transactions in journals and ledgers within a reasonable
period of time following a business transaction (section 6). All accounting
entries must be supported by source documents or by summary documents
prepared based on source documents.
89. Chapters 6, 8 and 9 of the Accounting Act prescribe in detail the
types of information accounting entities must record in their accounting
journals and ledgers to enable proper financial statements to be prepared. An
accounting entry must contain, amongst other items:
the date of the business transaction;

the number of the accounting entry;
the accounts debited and credited and the corresponding amounts;
a short description of the business transaction; and
the name and number of the source (summary) document.
90. Chapter 7 of the Accounting Act defines source documents as docu-
ments that certify business transactions and prescribes what these documents
must contain. They include, amongst other items:
the name and number of the document;
the date of preparation of the document;
the economic substance of the transaction;
the figures relating to the transaction (quantity, price and total
amount); and
the names of the parties to the transaction
91. Subsection 57(3) of the Taxation Act reinforces the above require-
ments for taxable accounting entities and further requires that these accounts
“organised in a manner which enables an overview to be obtained within a
reasonable period of time of the conduct of the transaction and of facts relevant
for taxation purposes, including revenue, expenditure, assets and liabilities”.
92. Supplementary to the Accounting Act and Taxation Act, the Value
Added Tax Act (VAT Act) also imposes obligations for taxable persons to
submit VAT returns containing relevant accounting and transaction records.
93. Subsection 36(2) of the Income Tax Act imposes record keeping obli-
gations on natural persons, who are required to maintain accounting records
on their income and expenses in a manner which clearly sets out the data
necessary for determining the taxable income. A taxpayer is also required
to preserve the documents related to income and expenses (i.e. underlying
documents). While the Estonian tax laws are silent about trustees of a foreign
trust, the record keeping obligations described above are applicable to all
Estonian resident taxpayers, whether natural or legal person.
Document retention (ToR A.2.3)

94. The Accounting Act requires accounting entities to preserve their
source documents for at least seven years as of the end of the financial year
during which the source document was recorded in the accounts. Accounting
ledgers, journals, contracts, financial statements, reports and other business
documents which are necessary for reconstructing business transactions

during audits must be preserved by the accounting entity for seven years as
of the end of the corresponding financial year (section 12).
95. The Taxation Act reinforces this requirement for taxable accounting
entities and requires such entities to “preserve documents related to transac-
tions and payments and other documents relevant for taxation purposes for
at least seven years as of 1 January of the year following the preparation or
receipt of the document, or in the case of files or dossiers, the making of the
last entry therein” (section 58).
96. There are no specific provisions under the Accounting Act that impose
sanctions for breach of the accounting requirements. Under section 3811 of the
Penal Code, the following conducts are punishable by a pecuniary punishment
or up to one year of imprisonment: (i) knowing violation of the requirements
for maintaining accounting; (ii) knowing and unlawful destruction, conceal-
ment or damaging of accounting documents; or (iii) failure to submit informa-
tion or submission of incorrect information in accounting documents if the
possibility to obtain an overview of the financial situation of the account-
ing entity is thereby significantly reduced. The same act, if the court has
announced the bankruptcy of the accounting entity or terminated bankruptcy
proceedings due to abatement, is punishable by a pecuniary punishment or up
to three years of imprisonment. Breach of the record keeping requirements
under the Taxation Act carries a fine of up to EUR 1 200 if committed by a
natural person, or up to EUR 3 200 if committed by a legal person.
Determination
The element is in place.
A.3. Banking information

Banking information should be available for all account-holders.
Record-keeping requirements (ToR A.3.1)

97. Under subsection 91(11) of the Credit Institutions Act, a credit insti-
tution is required to prepare accounting reports concerning three, six, nine
and 12 months of the current financial year in conformity to the international
accounting standards for financial reporting, and to submit such reports to
the FSA not later than 2 months after the end of the reporting period.
98. According to subsections 23(2) and 24(3) of the MLTFP Act, a credit
or financial institution must register the following personal data concerning
each of its clients:
the name and residence or seat of the person and, in the case of repre-
sentation, the name and residence or seat of the representative;
the document used for identification, and the number and date and
place of issue thereof;
in the case of a natural person, the personal identification code or the
date and place of birth of the natural person;
in the case of a legal person, the data of the beneficial owners of the
legal person, as well as the names of the directors and/or members of
the management board or a body replacing it.
99. Section 8 of the MLTFP Act defines a beneficial owner as a natural
person who, taking advantage of his or her influence, exercises control over
a transaction, act or another person, and in whose interests or favour or on
whose account the transaction or act is made. A beneficial owner as a natural
person who:
permanently owns the shares or voting rights of the company or exer-
cises final control over the management of a company: (i) by owning
over 25% of shares or voting rights through direct or indirect share-
holding or control, including in the form of bearer shares; or (ii) by
otherwise exercising control over the management of a legal person.; or
is a beneficiary of or exercises significant control over a legal person or
civil law partnership or another contractual legal arrangement, which
administers or distributes property: (i) to the extent of no less than
25%; or (ii) in whose interests mainly the legal person, civil law part-
nership or another contractual legal arrangement is set up or operates.
100. Pursuant to subsection 25(2) of the MLTFP Act, a credit or financial
institution must register the following data concerning each transaction to be
carried out:
upon identification and verification of a client: the date or period
of time of the conclusion of the transaction and a description of the
content of the transaction;
upon the opening of an account: the type of account, account number,
currency or securities account;
upon the deposit of property: the deposit number, the market price of
the property on the day of deposit or, if it is not possible to determine
the market price of the specified property, an exact description of the

property;
upon the renting and use of a safe deposit box: the number of the safe
deposit box and other data necessary for identification of the user
thereof;
upon the making of a payment relating to shares, debt instruments or
other securities: a description of the securities, the monetary value of
the transaction, the currency and the account number;
upon entry into an insurance contract: the number of the account
from which the first premium amount is debited;
upon the making of a payment on the basis of an insurance contract:
the number of the account to which the payment is credited;
upon the transfer of money: data submitted by the person concerning
the origin, sender and recipient of the money; and
in the case of other transactions: the amount of the transaction, the
currency and the account number or account numbers.
101. In accordance with section 26 of the MLTFP Act, credit and finan-
cial institutions must preserve this data for at least five years after the end
of a contractual relationship with a client. The documents and data speci-
fied above must be preserved in a manner which allows for an exhaustive
and immediate reply to enquiries from the FIU or other investigative bodies
or from a court pursuant to legislation. The internal rules of procedure of a
credit or financial institution must set out detailed requirements and proce-
dures for preservation of the documents and data.
Determination
COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION – 37
B. Access to Information
Overview
102. A variety of information may be needed in a tax enquiry and jurisdic-

tions should have the authority to obtain all such information. This includes
information held by banks and other financial institutions as well as informa-
tion concerning the ownership of companies or the identity of interest holders in
other persons or entities, such as partnerships and trusts, as well as accounting
information in respect of all such entities. This section of the report examines
whether Estonia’s legal and regulatory framework gives the authorities access
powers that cover all relevant persons and information and whether rights and
safeguards are compatible with effective exchange of information (EOI).
103. Estonia’s tax authorities have broad powers to obtain bank, owner-
ship, identity, and accounting information and have measures to compel
the production of such information. The ability of Estonia’s tax authorities
to obtain information for EOI purposes is derived from its general access
powers under the Taxation Act coupled with the authority provided by the rel-
evant EOI agreements. No domestic interest requirement exists for Estonia’s
competent authority to exercise their information gathering powers.
104. Estonia’s competent authority, when requested by a foreign counterpart,
has broad powers to retrieve information directly from taxpayers and with-
holding agents (hereinafter, “taxable persons”). Estonia’s competent authority
has also powers to request information from third parties, including credit and
financial institutions, in order to ascertain facts relevant to tax proceedings.
105. Prior to requesting information from third parties, Estonia’s competent
authority must, as a rule, approach the taxable person for information; but
this requirement is waived if doing so would hinder the relevant facts from
being ascertained. In order to request information from a bank, Estonia’s
competent authority must, without exception, issue an order which sets out the
name and identification code or date of birth or registry code of the taxable
person in connection with whose tax matter information is being collected
and the reason for contacting the credit institutions. This obligation imposed
on Estonia’s competent authority could restrict and hinder the effective EOI
38 – COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION
in certain cases. Due to the importance of effective access to bank informa-

tion for EOI purposes, element B.1. has been found to be not in place and it is
recommended that Estonia quickly amend its laws in this regard.
106. Estonia’s domestic law provides rights and safeguards to taxpayers
who may be the subject of an EOI request from Estonia’s EOI partners. The
scope of these rights and safeguards is wider than that provided for under the
international standard in some aspects. In particular, in cases where the subject
of an EOI request is not a resident of the requesting or an EU Member State,
the Taxation Act requires the Estonian tax authority to obtain the taxpayer’s
approval before it can transmit the requested information to the requesting state.
107. The application of these rights and safeguards clearly restricts the
scope of information that Estonia’s tax authorities can obtain and exchange
in certain cases, and can result in less than effective EOI. It is, therefore,
recommended that Estonia amend its legal framework to conform to the
international standard.
B.1. Competent Authority’s ability to obtain and provide information

Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information).
Bank, ownership, and identity information (ToR B.1.1) and

accounting records (ToR B.1.2)
108. The Tax and Customs Board is a government agency which oper-
ates within the area of government of the Ministry of Finance. The Tax and
Customs Board acts as the competent authority for the purpose of EOI upon
request under Estonia’s DTCs (sections 51(1) and 51(2), Taxation Act). The
Tax and Customs Board is also empowered to engage in EOI on spontaneous
and automatic bases (sections 51(21) and 51(22), Taxation Act).
Ownership and identity information and accounting records

109. The Tax and Customs Board has broad authority to obtain ownership and
identity information, as well as accounting records, from taxable persons, third
parties and other regional government agencies for EOI purposes. Subsection
60(1) of the Taxation Act authorises the Tax and Customs Board to obtain any
information relating to tax proceedings, in oral or written form, directly from
taxpayers or their representatives. The Tax and Customs Board may also compel
a taxable person, his representative or third parties to appear at the offices of the
Tax and Customs Board to provide information (subsections 60(1) and 61(1)).
110. Under subsection 61(1) of the Taxation Act, the Tax and Customs
Board has the right to request information from third parties in order to
ascertain facts relevant to tax proceedings, unless they have the right to
refuse to disclose evidence or information pursuant to law (see ToR B.1.5
below). In order to request information from such third parties, the Tax and
Customs Board has to issue an order which sets out the name of the taxable
person in connection with whose tax matter information is being collected
and the reason for contacting the third party (subsection 61(3)).
111. However, the Tax and Customs Board may only request information
from third parties after attempting to obtain the relevant information directly
from the taxable person (subsection 61(2)). This requirement is waived if this
would hinder the tax proceedings, if the Tax and Customs Board has no infor-
mation concerning the residence or seat of the taxable person or if the taxable
person cannot be reached at the address known to the Tax and Customs Board.
Bank information
112. One of the requirements under the Terms of Reference B.1.1 is that
competent authorities should have the power to obtain and provide foresee-
ably relevant information held by banks within the jurisdiction’s territorial
jurisdiction. This obligation is articulated in Articles 1 and 5(5) of the 2002
OECD Model Agreement on Exchange of Information on Tax Matters (OECD
Model TIEA) and accompanying commentary.
113. Article 5(5)(a) of the OECD Model TIEA prescribes a list of informa-
tion that a requesting State “shall provide” to the recipient State to demon-
strate the foreseeable relevance of the information to the request, and includes
“(a) the identity of the person under examination or investigation”. The
commentary to Article 5(5), notes at paragraph 58 that: “While paragraph 5
contains important procedural requirements that are intended to ensure that
fishing expeditions do not occur, subparagraphs a) through g) nevertheless
need to be interpreted liberally in order not to frustrate effective exchange
of information.” Paragraph 59 of the Commentary, gives an example of
the application of sub-paragraph 5(5)(a), that: “Where a Party is asking for
account information but the identity of the accountholder(s) is unknown, sub-
paragraph (a) may be satisfied by supplying the account number or similar
identifying information”.
114. This issue is relevant because access to bank information in Estonia
for the purposes of EOI requires among other items the provision of the name
or business name of the client with regard to whom the inquiry is submitted
and the personal identification code or date of birth or registry code of the
client. These procedures and their legal basis are summarised as follows.
115. In Estonia, banks are required to maintain general confidentiality of

client information under section 88(1) of the Credit Institutions Act. The dis-
closure of such information to tax authorities is governed by section 88(5)4),
which allows a credit institution to disclose information subject to banking
secrecy to “a tax administrator pursuant to the provisions of the Taxation Act”.
116. Section 61 of the Taxation Act empowers the Tax and Customs Board
to obtain information from third parties, including banks. In addition to the
requirements established under subsections 61(2) and 61(3) of the Taxation
Act and described above, a written inquiry directed to a bank must set out:
(i) the name or business name of the client with regard to whom the inquiry
is submitted and the personal identification code or date of birth or registry
code of the client; (ii) the purpose of use of the requested data and an exhaus-
tive list or description of the data; and (iii) the legal grounds for the inquiry
(section 88(6), Credit Institutions Act). When this information is not available
to the Tax and Customs Board, these requirements impose legal limitations
on the ability of the Estonian competent authorities to obtain information held
by a bank for tax purposes in response to a specific EOI request.
117. The outcome is an EOI regime that in one important aspect is not
compatible with the international standard, which envisages information
exchange as long as the identity of the taxpayer concerned can be ascertained,
as described above. Estonia has advised that it is not their administrative
practice to restrict the access and exchange of bank information through this
requirement. However, it is not clear that this practice would be upheld in
court if it were to be challenged. It is, therefore, recommended that Estonia
amends its legal framework to fully comply with the international standard.
Powers to obtain information

118. The Tax and Customs Board has broad powers under the Taxation
Act to make inquiries and investigations in order to ascertain facts relevant
to tax proceedings. A taxable person has the obligation to cooperate with and
not prevent a tax authority from performing procedural acts (section 56). A
tax authority can examine any documents relating to the economic or profes-
sional activities of a taxable person or to the payment of taxes by a taxable
person, and to take inventory or control measurements of goods, materials,
other assets, work performed and services provided (section 59(2)).
119. Under the Taxation Act, a tax authority is vested with powers (i) to
obtain oral and written information from a taxable person or a representa-
tive (sections 60(1)); (ii) to request a taxable person or third party (subject to
subsection 61(2)) to present things8 and bearer securities or submit documents

in the possession of this person (section 62(1)); and (iii) to make copies and
extracts or to remove documents (section 65).
120. In order to conduct inspections, officials of tax authorities have the
right to access the premises where the business or professional activities of
a taxable person are carried out (section 72(1)). However, they do not have
the right to conduct searches, open locked spaces or storage rooms or enter a
dwelling against the will of the persons residing therein, even if the business
or professional activities of a person are carried out in such premises.
121. Furthermore, officials of tax authorities have powers to inspect prop-
erty owned or possessed by persons not engaged in business or professional
activities, provided that the inspection does not involve entry into or a search
of the dwelling or premises of the person against the person’s will (section
72(2)). An advance notice of the conduct of an inspection is generally required,
except for urgent cases or when the tax authority is unable to ascertain the
residence or seat of the owner or possessor of the property (section 72(3)).
122. These restrictions are only lifted when a violation of the Taxation Act
or Acts concerning taxes have been established in the activities of the taxable
person and criminal proceedings have been commenced in connection with
such violation. Under such circumstances the tax authority will have the right
to conduct an inspection without the above restrictions, on the basis of an
order from the Prosecutor’s Office or a court ruling.
123. It is not clear whether these restrictions have a significant impact on
Estonia’s ability to obtain information for EoI purposes. It should be noted
that search and seizure powers are only one of several avenue of obtaining
information, and as described in the following paragraphs, Estonia is able to
issue administrative acts compelling persons to deliver requested informa-
tion the tax authority, with penalties for non-compliance. The effectiveness
of these penalties and Estonia’s overall ability to obtain information for EoI
purposes will be examined in Estonia’s Phase 2 review.
Use of information gathering measures absent domestic tax interest

(ToR B.1.3)
124. The concept of “domestic tax interest” describes a situation where a
contracting party can only provide information to another contracting party
if it has an interest in the requested information for its own tax purposes.
Estonia has no domestic tax interest with respect to its information gather-
ing powers. That is, information gathering powers provided to the Tax and
8. The term “things” is defined under General Part of the Civil Code Act to mean any
corporal object.
Customs Board under the Taxation Act, as described above, can be used to
provide EOI assistance regardless of whether Estonia needs the information
for its own domestic tax purposes.
Compulsory powers (ToR B.1.4)

125. As previously described, the Tax and Customs Board has broad powers
to compel the production of information from taxable persons and third parties
under sections 59 to 72 of the Taxation Act. The Tax and Customs Board exercises
these compulsory powers by issuing an administrative act directed at the taxable
person or third parties. When setting a term for the performance of obligations to
submit information or documents, a tax authority may issue a warning, stating that
a penalty payment may be imposed for failure to perform an obligation within the
term (section 67(1)). The penalty payment must not exceed EUR 640 the first time,
EUR 2 000 the second time, or EUR 2 640) in total (section 67(3)).
126. If a person fails to perform an obligation imposed by an administra-
tive act by the due date stated in a warning, the person must pay the penalty
payment specified in the warning. The tax authority must, in an order, submit
a claim for payment of a penalty payment to an obligated person, set a term
for payment and issue a warning stating that, in the event of failure to pay
the penalty payment within the specified term, the claim will be subject to
compulsory execution (section 67(2)).
127. In addition, failure to submit a tax return, documents, things or other
information by the due date, failure to register with a tax authority, submis-
sion of false information or knowing submission of incorrect documents to
a tax authority, failure to comply with the requirements for the keeping of
records, failure to comply with an order of a tax authority or obstruction of
the activities of a tax authority in another manner is punishable by a fine
of up to EUR 1200 (section 154(1)). If the same act is committed by a legal
person, the fine limit is increased to EUR 3 200 (section 154(2)).
Secrecy provisions (ToR B.1.5)
Legal privilege and professional secrecy

128. All of Estonia’s EOI agreements permit Estonia to decline a request if
responding to the request would disclose any trade, business, industrial, com-
mercial or professional secret or trade process, or information, the disclosure of
which would be contrary to public policy. This follows the standards set forth
in Article 26 of the OECD Model Tax Convention and the OECD Model TIEA.
129. These exceptions are reinforced in Estonia’s domestic laws, which
limit the scope of information that the Tax and Customs Board is able to
obtain through its information gathering powers. Section 64 of the Taxation

Act allows taxable persons or third parties to refuse to provide information
or submit evidence that are the subject of legal privilege, professional and
business secrets, and state secrets. However, this provision goes beyond the
standard to allow taxable persons and third parties to refuse to provide infor-
mation and submit documents under the following circumstances:
persons who assist advocates subject to legal privilege;
auditors and accountants in the course of providing auditing or
accounting services;
spouses, direct blood relatives, sisters and brothers, descendants of
sisters or brothers, and direct blood relatives or sisters or brothers of
spouses of taxable persons (i.e. relatives), unless they are required to
provide information in a given matter or submit documents in con-
nection with their own liability; and
persons in respect of questions to which giving an answer would mean that
the persons would incriminate themselves or a relative, as defined above.
130. Estonia has advised that these provisions are overridden by disclosure
obligations imposed by a DTC containing a provision similar to Article 26(3)
(c) of the OECD Model Tax Convention. The practical impact of these restric-
tions on the effectiveness of access to information will be considered as part
of the Phase 2 review of Estonia.
Bank secrecy
131. Section 88(1) of the Credit Institutions Act requires Estonian banks
to guarantee the confidentiality of the clients’ data. All data and assessments
which are known to a credit institution concerning the customers of the
credit institution are deemed to be information subject to banking secrecy.
However, as described above, the banking secrecy obligations are lifted under
section 88(5)4), which allows Estonian banks to disclose such information to
tax authorities under specific circumstances.
Phase 1 Determination
The element is not in place.
Estonia requires the name of the bank Estonia should amend its laws so that
account holder before it is able to it can access bank account informa-
access and exchange relevant bank tion once the identity of the person
account information. under examination is established.
B.2. Notification requirements and rights and safeguards
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information.
Not unduly prevent or delay exchange of information (ToR B.2.1)
Consent of Taxpayer
132. The relevant provisions governing the Estonian tax authority’s legal
right to exchange information with its EOI partners can be found in sections
26, 27 and 30 of the Taxation Act. Section 26 of the Taxation Act provides all
information obtained by the tax authority in the course of its official duties
are information subject to tax secrecy and that such information “may only
be disclosed with the written permission of the taxable person or in the cases
specified in Sections 27-30 of the Act”. Section 27 defines the scope of infor-
mation that is considered “public information” and permits their disclosure
to “anyone”. Information that falls outside the scope of section 27 continues
to be subject to restricted disclosure rules.
133. Section 30 of the Taxation Act governs the disclosure of such infor-
mation in cases of international assistance, and states that:
“A tax authority may disclose information subject to tax secrecy
without the consent of a taxable person:
1) to the competent bodies of a foreign state in respect of a
resident taxpayer in that state concerning information relevant
to tax proceedings under the conditions provided for in an inter-
national agreement;
2) to bodies of the European Union and Member States thereof
which are competent to exchange information relating to taxable
persons pursuant to the procedure prescribed in the legislation
of the European Union”.
134. The absence of an equivalent provision pertaining to residents of Estonia
and third non-EU Member States means that with regard to EOI requests where
the tax proceedings concern a taxpayer residing in Estonia or in a third non-EU
State, the Estonian tax authorities would need to obtain a taxable person’s con-
sent before transmitting the requested information to the requesting State.
135. It should be noted that such instances constitute a limited subset of
EOI requests as most EOI requests would usually be made in relation to a
tax proceeding concerning a resident of the requesting state. It is also noted
that the exceptions in place for EU member states would already provide for
effective EOI with the majority of Estonia’s significant economic partners in

this regard. Nevertheless, this restriction is not compatible with effective EOI
and it is recommended that Estonia amends its legal framework to conform
to the international standard.
Notification
136. As a general rule Estonia’s tax authorities are obliged to inform the
person concerned if they transmit information subject to tax secrecy to a
requesting State in response to an EOI request. This is the default require-
ment in the Taxation Act and the only exceptions are when the information
transmitted is considered public information under Section 27 of the Taxation
Act. This notification process is done either simultaneously with or after the
information has been transmitted to the requesting State, and therefore will
not unduly delay or prevent the effective exchange of information.
137. If the Tax and Customs Board needs to obtain information for the
purposes of fulfilling the request, the Tax and Customs Board must first
attempt to obtain the information directly from the taxpayer or his representa-
tive before it can obtain the information from a third party. Nevertheless, the
Tax and Customs Board is not required to do so if doing so would hinder the
facts relevant for the purposes for tax proceedings from being ascertained,
if the Tax and Customs Board has no information concerning the residence
or seat of the taxable person or if the taxable person cannot be reached at the
address known to the Tax and Customs Board. This procedure is in line with
the international standard, which provides that notification requirements and
procedures should not prevent or delay the exchange of information.
Appeal procedure
138. Pursuant to the provisions of the Administrative Procedure Act and
section 46 of the Taxation Act, the Tax and Customs Board needs to issue
an administrative order to compel a taxable person or his representative to
appear at the offices of the Tax and Customs Board (section 60(2)), or to
compel a third party to provide information relevant to a tax proceeding
(section 61(3)). Such administrative acts which impose obligations on the
addressee must set out, among other items, the factual and legal basis for
its issue and its terms for compliance (section 46). They must also contain a
reference to the opportunities, terms, procedures and place for challenging
the administrative act. The Tax and Customs Board typically sets a deadline
of two weeks for the recipient of an administrative act to respond.
139. Under sections 137 and 138 of the Taxation Act, a tax person and third
party can challenge administrative acts, including those issued for information
gathering purposes, if they feel that the administrative act violates their rights
or freedoms. Such challenges must be filed to the Tax and Customs Board
within 30 days of the date of notification of or date of delivery of the adminis-
trative act. If the challenge is deficient, the Tax and Customs Board may give
the taxpayer another 10 days to rectify the challenge.
140. The Tax and Customs Board will assess the challenge and make a
decision on whether to accept or deny the challenge, within 40 days after the
receipt thereof (section 147(3) and 147(4)). As a rule, the filing of a challenge
must not prevent the challenged administrative act from being executed,
except for the execution of orders issued to a third party pursuant to sections
61 or 62 of the Taxation Act (section 146).
141. If the challenge is unsuccessful, the tax person or third party may
file an action with an administrative court pursuant to the provisions of the
Code of Administrative Court Procedure (section 151(1)). A person may also
recourse directly to a court without first filing a challenge with the Tax and
Customs Board (section 151(2)). In accordance with subsection 13(1) of the
Code of Administrative Court Procedure, if no term is provided by law, an
administrative court must adjudicate a matter within a reasonable period
of time. Under the Taxation Act, there is no specified timeframe for the
Administrative Court to render a decision on a challenge by a tax person or
third party on an administrative act issued by the Tax and Customs Board.
142. These appeal procedures apply in all cases where the Tax and Customs
Board exercises compulsory powers under the Taxation Act. Peer inputs
to Estonia’s phase 1 review have not indicated that these procedures affect
Estonia’s ability to respond to international requests for information in tax mat-
ters within 90 days. Estonia has also advised that the entire process typically
takes about 70 days. The ultimate effectiveness of Estonia’s EOI regime is an
issue of practice and should be dealt with in Estonia’s Phase 2 review.
Phase 1 Determination
With regard to EOI requests which Estonia should amend its laws to be
concern a taxpayer residing in able to exchange information without
Estonia or in a third non-EU State, the requiring the taxable person’s consent
Estonian tax authorities need to obtain in all cases.
the taxable person’s consent before
transmitting the requested information
to the requesting State.
COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION – 47
C. Exchanging Information
Overview
143. Jurisdictions generally cannot exchange information for tax purposes

unless they have a legal basis or mechanism for doing so. In Estonia, the legal
authority to exchange information is derived from double tax conventions
(DTCs), as well as from domestic law to a lesser extent. This section of the
report examines whether Estonia has a network of information exchange that
would allow it to achieve effective exchange of information (EOI) in practice.
144. Estonia has an extensive treaty network that allows for exchange of
information for tax purposes with all relevant partners. Estonia has signed 49
DTCs, of which 47 are in force (see Annex 2). Estonia has also initialled five
other DTCs and two protocols, all of which incorporate provisions that allow
Estonia to exchange information according to the international standard.
However, it is not clear that Estonia’s legal framework would allow the terms
of these agreements to be given full effect due to limitations in Estonia’s
domestic law regarding access to bank information, as identified in Part B.
For this reason, element C.1 has been found not to be in place.
145. In addition to its DTCs, Estonia is also able to exchange information
with other EU Member States in accordance with the EU Mutual Assistance
Directive, and to automatically exchange of information on interest income
earned by EU residents in accordance with the EU Savings Directive.
146. All exchange of information articles in Estonia’s DTCs contain
confidentiality provisions to ensure that the information exchanged will be
disclosed only to persons authorised by the DTCs. While each of the articles
might vary slightly in wording, these provisions generally contain all of
the essential aspects of Article 26(2) of the OECD Model Tax Convention.
However, Estonia’s interpretation of these provisions are not consistent with
the relevant commentary to the OECD Model Tax Convention. Although
most of the EOI provisions in Estonia’s DTCs do not include Articles 26(4)
and 26(5) of the OECD Model Tax Convention, these DTCs allow Estonia to
exchange information according to the international standard.
48 – COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION
147. Estonia’s DTCs ensure that the contracting parties are not obliged to
provide information which would disclose trade, business, industrial, com-
mercial or professional secrets or information which is the subject of attor-
ney-client privilege or to make disclosures which would be contrary to public
policy. There are no legal restrictions on the ability of Estonia’s competent
authority to respond to requests within 90 days of receipt by providing the
information requested or by providing an update on the status of the request.
C.1. Exchange of information mechanisms
Exchange of information mechanisms should allow for effective exchange of information.
148. Under sections 65(5) and 121 of the Constitution of the Republic of
Estonia, the DTCs signed by Estonia are given the force of law once they are
ratified by the Riigikogu, which is the Estonian parliament. The competent
authority to request and provide information under Estonia’s DTCs and
domestic laws is the Tax and Customs Board, a government agency which
operates under the Ministry of Finance
149. The Taxation Act allows Estonia to enter into EOI agreements con-
cerning taxation which override domestic law. Subsection 51(2) of the Taxation
Act specifies that in “[i]nternational professional assistance shall be sought
and granted on the basis of an international agreement, as well as pursuant to
the procedure provided for in the legislation of the European Union.”
150. Estonia is able to exchange information with other EU Member
States9 under the EU Mutual Assistance Directive (EU Council Directive
9. Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland,
France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg,
Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain,
Sweden and the United Kingdom. Regarding Cyprus – note by Turkey: The infor-
mation in this document with reference to “Cyprus” relates to the southern part of
the Island. There is no single authority representing both Turkish and Greek Cypriot
people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus
(TRNC). Until a lasting and equitable solution is found within the context of the
United Nations, Turkey shall preserve its position concerning the “Cyprus issue”.
Note by all the European Union Member States of the OECD and the European
Commission: The Republic of Cyprus is recognised by all members of the United
Nations with the exception of Turkey. The information in this document relates to the
area under the effective control of the Government of the Republic of Cyprus.
77/799/EEC of 19 December 1977).10 Estonia also provides automatic

exchange of information on interest income earned by EU residents in
accordance with the EU Council Directive 2003/48/EC of 3 June 2003 on
taxation of savings income in the form of interest payments (EU Savings
Directive).
Foreseeably relevant standard (ToR C.1.1)

151. The international standard for exchange of information envisages
information exchange to the widest possible extent, but does not allow specu-
lative requests for information that have no apparent nexus to an open inquiry
or investigation. The balance between these two competing considerations
is captured in the standard of “foreseeable relevance” which is included in
paragraph 1 of Article 26 of the OECD Model Tax Convention set out below:
The competent authorities of the contracting states shall exchange
such information as is forseeably relevant to the carrying out
of the provisions of this Convention or to the administration
or enforcement of the domestic laws concerning taxes of every
kind and description imposed on behalf of the contracting states
or their political subdivisions or local authorities in so far as
the taxation thereunder is not contrary to the Convention. The
exchange of information is not restricted by Articles 1 and 2.
152. Estonia’s DTCs generally provide for the exchange of information
that is “necessary” for carrying out the provisions of the Convention or of the
domestic tax laws of the Contracting States. There are a few exceptions. The
DTCs with Canada and the United States use the term “relevant”. The agree-
ments with Albania, Isle of Man and Macedonia use the term “foreseeably
relevant”. The DTC with Switzerland limits EOI to the purposes of carrying
out the provisions of the DTC.
153. The commentary to Article 26(5) of the OECD Model Tax
Convention refers to the standard of “foreseeable relevance” and states that
the Contracting States may agree to an alternative formulation of this stand-
ard that is consistent with the scope of the Article, for instance by replacing
10. On 7 December 2010, political agreement was reached at ECOFIN on the text of
the new Directive on Administrative Cooperation in the field of taxation, provid-
ing for an overhaul of EU Council Directive 77/799/EEC. The new Directive will
ensure that the Article 26 of the OECD Model Tax Convention is implemented
in the EU as regards the exchange of information on request. It will thus prevent
an EU Member State from refusing to supply information concerning a taxpayer
of another EU Member State on the sole grounds that the information is held by
a bank or other financial institution.
“foreseeably relevant” with “necessary” or “relevant”. In view of this recog-

nition, all the DTCs concluded by Estonia, with the exception of its DTC with
Switzerland, meet the “foreseeably relevant” standard.
154. Estonia has also initialed five other DTCs with Bahrain, Bosnia and
Herzegovina, India, Thailand, United Arab Emirates and protocols amending
its DTCs with Singapore and Georgia.11 Estonian authorities have indicated
that these DTCs and protocols meet the “foreseeably relevant” standard and
will be signed as soon as possible. In addition, Estonia has initiated DTCs
negotiations with Cyprus,12, 13 Morocco, South Africa and Uzbekistan.
In respect of all persons (ToR C.1.2)

155. For exchange of information to be effective it is necessary that a juris-
diction’s obligation to provide information is not restricted by the residence
or nationality of the person to whom the information relates or by the resi-
dence or nationality of the person in possession or control of the information
requested. For this reason the international standard for exchange of informa-
tion envisages that EOI mechanisms will provide for exchange of information
in respect of all persons.
156. Article 26(1) of the OECD Model Tax Convention indicates that “[t]he
exchange of information is not restricted by Article 1”, which defines the
personal scope of application of the Convention and indicates that it applies
to persons who are residents of one or both of the Contracting States. All of
Estonia’s DTCs contain this sentence, except for the DTCs with Germany,
Singapore and Switzerland.
157. However, Article 26(1) of the DTCs with Germany and Singapore
apply to “carrying out the provisions of the Convention or of the domestic
laws of the Contracting States concerning taxes covered by the Convention
insofar as the taxation thereunder is not contrary to the Convention”. As
a result of this language, these DTCs would not be limited to residents
11.
ZZZ¿QHHLQGH[SKS"LG .
12. Footnote by Turkey: The information in this document with reference to
“Cyprus” relates to the southern part of the Island. There is no single authority
representing both Turkish and Greek Cypriot people on the Island. Turkey rec-
ognizes the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and
equitable solution is found within the context of the United Nations, Turkey shall
preserve its position concerning the “Cyprus issue”.
13. Footnote by all the European Union Member States of the OECD and the European
Nations with the exception of Turkey. The information in this document relates to
the area under the effective control of the Government of the Republic of Cyprus.
because all taxpayers, resident or not, are liable to the domestic taxes listed in
Article 2. Exchange of information in respect of all persons is thus possible
under the terms of these two DTCs.
158. In contrast, Article 26(1) of the DTC with Switzerland provides for
exchange of information only for the purposes of “carrying out the provisions
of the present Convention in relation of the taxes which are the subject of the
Convention”. Since this provision only apply to residents of either Switzerland
or Estonia, exchange of information in respect of all persons is not possible
under the Estonia-Switzerland DTC.
Exchange of information held by financial institutions, nominees,

agents and ownership and identity information (ToR C.1.3)
159. Jurisdictions cannot engage in effective exchange of information if
they cannot exchange information held by financial institutions, nominees or
persons acting in an agency or a fiduciary capacity. Both the OECD Model
Tax Convention and the Model Agreement on Exchange of Information,
which are the authoritative sources of the standards, stipulate that bank
secrecy cannot form the basis for declining a request to provide informa-
tion and that a request for information cannot be declined solely because the
information is held by nominees or persons acting in an agency or fiduciary
capacity or because the information relates to an ownership interest.
160. Article 26(5) of the OECD Model Tax Convention states that a
contracting state may not decline to supply information solely because the
information is held by a bank, other financial institution, nominee or person
acting in an agency or a fiduciary capacity or because it relates to owner-
ship interests in a person. Except for the DTCs with Albania (Article 26(5)),
Bulgaria (Article 25(4)), Isle of Man (Article 24(5)), Serbia (Article 26(5)) and
the United States (Article 26(3)14), none of Estonia’s other 43 DTCs (including
the one with Russia, which is not in force yet) contain such a provision.
161. However, the absence of this paragraph does not automatically create
restrictions on exchange of bank information. The commentary to Article 26(5)
indicates that while paragraph 5, added to the Model Tax Convention in 2005,
14. Estonia’s DTC with the United States uses a different text, which also meets
the requirements of Article 26(5) of the OECD Model Tax Convention:
“Notwithstanding paragraph 2, laws or practices of the requested State pertain-
ing to the disclosure of information by financial institutions, nominees or per-
sons acting in an agency or fiduciary capacity, or respecting ownership of debt
instruments or interests in a person shall not affect the authority of the requested
State. The competent authorities shall have the authority to obtain and provide
information notwithstanding such disclosure laws and practices.”
represents a change in the structure of the Article, it should not be interpreted

as suggesting that the previous version of the Article did not authorise the
exchange of such information. Estonia’s domestic laws allow it to access and
exchange bank information even in the absence of Article 26(5); however as
described in Part B this can only be done under conditions that are more restric-
tive than provided for under the international Standard. This is fundamentally
an issue of Estonia’s domestic legislation not allowing it to comply fully with
the terms of the DTCs rather than the DTC terms being non-compliant them-
selves. It is therefore recommended that Estonia amends its legislation to allow
it to comply fully with the terms of its DTCs.
162. In addition to amending its domestic legislation, it is recommended
that Estonia update the DTCs with partners that currently have restrictions
under their domestic laws on access to bank information in the absence of
a specific DTC provision requiring such access for EOI purposes. Estonia
should continue to renegotiate such DTCs to include a provision similar to
Article 26(5) of the OECD Model Taxation Convention. This is particularly
so in Estonia’s DTC with Switzerland, Article 26(1) of which states that “[n]o
information as aforesaid shall be exchanged which would disclose any trade,
business, banking, industrial or professional secret or trade process” [emphasis
added], effectively prohibiting the exchange of any banking information.
Absence of domestic tax interest (ToR C.1.4)

163. The concept of “domestic tax interest” describes a situation where a
contracting party can only provide information to another contracting party
if it has an interest in the requested information for its own tax purposes. A
refusal to provide information based on a domestic tax interest requirement
is not consistent with the international standard. EOI partners must be able
to use their information gathering measures even though invoked solely to
obtain and provide information to the requesting jurisdiction.
164. Estonia’s DTCs with Albania (Article 26(4)), Bulgaria (Article 25(3),
Canada (Article 26(3)15), Isle of Man (Article 24(4)), Macedonia (Article 24(4)),
Serbia (Article 26(4)) and the United States (Article 26(3)) contain explicit
provisions obliging the contracting parties to use information-gathering
measures to exchange requested information without regard to a domestic tax
interest. Estonia’s other 41 DTCs (including the one with Russia, which is not
in force yet) do not contain such a provision. The commentary to Article 26(4)
15. Estonia’s DTC with the Canada uses a different text, which also meets the
requirements of Article 26(4) of the OECD Model Tax Convention: “If informa-
tion is requested by a Contracting State in accordance with this Article, the other
Contracting State shall endeavour to obtain the information to which the request
relates in the same way as if its own taxation were involved.”
indicates that paragraph 4 was introduced in the 2005 Model Tax Convention
to express an implicit obligation contained in this Article to exchange infor-
mation in situations where the requested information is not needed by the
requested State for domestic tax purposes.
165. There are, however, no domestic tax interest restrictions on Estonia’s
powers to access information in exchange of information cases (see Part B
above). Estonia is able to exchange information, including in cases where the
information is not publicly available or already in the possession of the gov-
ernmental authorities. An additional 30 treaty partners of Estonia16 reported
in 2010 that information can be exchanged regardless of the existence of a
domestic tax interest. Estonia’s DTCs with such jurisdictions should be con-
sidered as meeting the international standard for EOI, even in the absence of
Article 26(4).
166. A domestic tax interest requirement may however exist for some of
Estonia’s other 11 DTCs partners which were not covered in the 2010 assess-
ment report. 17 In such cases, the absence of a specific provision requiring
exchange of information unlimited by domestic tax interest will serve as a
limitation on the exchange of information which can occur under the relevant
DTC. A practical assessment of whether the absence of a provision similar to
Article 26(4) of the OECD Model Taxation Convention in such DTCs imposes
an impediment to the exchange of information may be made in the Phase 2
Peer Review of Estonia.
Absence of dual criminality principles (ToR C.1.5)

167. The principle of dual criminality provides that assistance can only be
provided if the conduct being investigated (and giving rise to an information
request) would constitute a crime under the laws of the requested jurisdic-
tion if it had occurred in the requested jurisdiction. In order to be effective,
exchange of information should not be constrained by the application of the
dual criminality principle.
168. There are no such limiting dual criminality provisions in any of
Estonia’s DTCs.
16. Austria, Belgium, China, Czech Republic, Denmark, Finland, France, Germany,
Greece, Hungary, Iceland, Ireland, Israel, Italy, (Republic of) Korea, Luxembourg,
Malta, Netherlands, Norway, Poland, Portugal, Russia, Singapore, Slovak
Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.
17. Armenia, Azerbaijan, Belarus, Croatia, Georgia, Kazakhstan, Latvia, Lithuania,
Moldova, Romania, and Ukraine.
Exchange of information in both civil and criminal tax matters

(ToR C.1.6)
169. Information exchange may be requested both for tax administration
purposes and for tax prosecution purposes. The international standard is not
limited to information exchange in criminal tax matters but extends to infor-
mation requested for tax administration purposes (also referred to as “civil
tax matters”).
170. All Estonia’s DTCs provides for exchange of information in both civil
and criminal tax matters.
Provide information in specific form requested (ToR C.1.7)

171. There are no restrictions in Estonia’s DTCs or laws that would pre-
vent it from providing information in a specific form, so long as this is con-
sistent with its own administrative practices.18 Estonia’s DTCs with Canada
and the United States contain explicit provisions (both under Article 26(3))
that reinforce the need to provide information in the form requested.
In force (ToR C.1.8)

172. Exchange of information cannot take place unless a jurisdiction has
exchange of information arrangements in force. The international standard
requires that jurisdictions take all steps necessary to bring information
arrangements that have been signed into force expeditiously.
173. Estonia has in force DTCs with 47 jurisdictions. Estonia’s DTCs with
Russia and Jersey were signed on 5 November 2002 and 21 December 2010
respectively, but have not been brought into force yet. The protocol amending
Estonia’s DTC with Georgia has also been signed on 17 July 2010, but not
brought into force. The protocol with Georgia has not been ratified by the
parties yet.19 Estonia has advised that its DTC with Russia has been ratified
by the Estonian Parliament, but not by Russia.
18. In accordance with section 60(1) of the Taxation Act, the Estonian tax author-
ity is entitled to obtain oral and written information from a taxable person or a
representative thereof in order to ascertain facts relevant to tax proceedings. In
accordance with section 62(1) of the Taxation Act, in order to ascertain facts rel-
evant to tax proceedings, the Estonian tax authority has the right to request that
taxable persons and third parties present or submit relevant documents that are
in their possession.
19. The protocol amending Estonia’s DTC with Georgia was signed on 17 July 2010
and ratified by Georgia on 3 Nov 2010.
174. In addition, Estonia’s DTCs with Bahrain, Bosnia and Herzegovina,

India, Thailand, United Arab Emirates and its protocols amending its DTCs
with Singapore, all of which meet the international standard, have been ini-
tialled but not yet signed. Estonia has indicated that these DTCs and protocol
will be signed as soon as possible.
Be given effect through domestic law (ToR C.1.9)

175. For information exchange to be effective the parties to an EOI
arrangement need to enact any legislation necessary to comply with the
terms of the arrangement. Estonia’s DTCs are given the force of law once
they are ratified by the Riigikogu and they override Estonian domestic tax
law (subsections 65(5) and 121, Constitution of the Republic of Estonia and
subsection 51(2), Taxation Act). However, the shortcomings identified in Part
B mean that Estonia may not be able to fully comply with the terms of its EOI
arrangements in practice. It is recommended that Estonia amends its domestic
legislation so that it can obtain and exchange in all cases.
Determination
The element is not in place.
recommendations
It is not clear that Estonia’s legal Estonia should amend its legislation
framework would allow the terms of its so that it can give full effect to the
agreements to be given full effect due terms of its EOI arrangements.
to limitations in Estonia’s domestic law
regarding access to bank information.
One of Estonia’s agreements does Estonia should renegotiate its
not provide for effective exchange of agreements as necessary so that
information. they provide for effective exchange of
information.
Some of Estonia’s DTCs with Estonia should work with the
jurisdictions which are not be able relevant DTC partners to incorporate
to access information held by banks Article 26(5) OECD Model Tax
or fiduciaries for the purpose of Convention into these DTCs.
EOI do not contain a provision
similar to Article 26(5) OECD Model
Tax Convention, resulting in an
impediment to the effective EOI for tax
of purposes.
C.2. Exchange of information mechanisms with all relevant partners

The jurisdictions’ network of information exchange mechanisms should cover
all relevant partners.
176. Ultimately, the international standard requires that jurisdictions

exchange information with all relevant partners, meaning those partners
who are interested in entering into an information exchange arrangement.
Agreements cannot be concluded only with counterparties without economic
significance. If it appears that a jurisdiction is refusing to enter into agree-
ments or negotiations with partners, in particular ones that have a reasonable
expectation of requiring information from that jurisdiction in order to prop-
erly administer and enforce its tax laws it may indicate a lack of commitment
to implement the standards.
177. Estonia has DTCs signed with 49 jurisdictions (47 of which are in
force), including:
25 out of 26 EU Member States (i.e. all but Cyprus);
two EEA countries (i.e. Iceland and Norway, but not Liechtenstein);
and
29 OECD/G20 countries20 (out of which 19 are simultaneously EU
Member States and two are EEA countries).
178. Amongst the DTCs mentioned above, Estonia has DTCs with its main
trading partners, namely Finland, Germany, and Sweden, as well as other
major economies, including China, France, the United States, the United
Kingdom, etc. Estonia has advised that its 2002 DTC with Russia has been
ratified by the Estonian Parliament, but not yet by Russia.
179. In addition to its DTCs, Estonia is also able to exchange information
with other EU Member States in accordance with the EU Mutual Assistance
Directive. Estonia is also able to automatically exchange of information with
EU Member States on interest income earned by EU resident individuals in
accordance with the EU Savings Directive.
180. Comments were sought from the jurisdictions participating in the
Global Forum in the course of the preparation of this report, and no jurisdiction
20. Austria, Belgium, Canada, China, Czech Republic, Denmark, Finland, France,
Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Luxembourg, Netherlands,
Norway, Poland, Portugal, Slovak Republic, Slovenia, South-Korea, Spain, Sweden,
Switzerland, Turkey, United Kingdom and United States. The treaty with Russia has
not been ratified by Russia yet.
advised the assessment team that Estonia had refused to negotiate or conclude
an EOI agreement with it.
Determination
recommendations
Estonia has a comprehensive network Estonia should ensure it gives
of EOI arrangements with relevant full effect to the terms of its EOI
partners but the issues identified in arrangements in order to allow for
respect of element B.1 need to be full exchange of information to the
addressed. standard with all relevant partners.
Estonia is actively seeking to expand Estonia should continue to develop
its network of information exchange its exchange of information network
mechanisms. with all relevant partners, and take all
steps necessary to bring concluded
agreements into effect as quickly as
possible.
C.3. Confidentiality
The jurisdictions’ mechanisms for exchange of information should have adequate
provisions to ensure the confidentiality of information received.
Information received: disclosure, use, and safeguards (ToR C.3.1)

181. Governments would not engage in information exchange without the
assurance that the information provided would only be used for the purposes
permitted under the exchange mechanism and that its confidentiality would
be preserved. Information exchange instruments must therefore contain con-
fidentiality provisions that spell out specifically to whom the information can
be disclosed and the purposes for which the information can be used. In addi-
tion to the protections afforded by the confidentiality provisions of informa-
tion exchange instruments, jurisdictions with tax systems generally impose
strict confidentiality requirements on information collected for tax purposes.
182. All of Estonia’s DTCs have confidentiality provisions to ensure that
the information exchanged will be disclosed only to persons authorised by
the DTCs. While each of the articles might vary slightly in wording, these
provisions generally include both essential aspects of Article 26(2) of the

OECD Model Tax Convention, which are that:
Any information received under an EOI request must be treated
secret in the same manner as information obtained under the domes-
tic laws of the receiving State; and
This information may be disclosed only to authorised persons con-
cerned with the administration and enforcement of the receiving
State’s tax laws.
183. However, Estonia has advised that its interpretation of treaty provisions
based on Article 26(2) is different from the one laid down in the commentary
to the OECD Model Tax Convention. According to Estonia’s interpretation and
also in its practice, information received under an EOI request is first classified
into secret and non-secret (also known as “public”) information in the same
manner Estonia classifies information it obtains domestically. “Secret” infor-
mation is then subjected to the disclosure restrictions spelled out in the DTCs,
while the disclosure of “public” information is governed by Estonia’s domestic
laws. Section 27 of the Taxation Act defines the scope of information consid-
ered “public” and includes among other items a person’s residency status and
the amount of his tax arrears. Such information may be disclosed to “anyone”
without the consent of or having informed a taxable person.
184. Estonia’s interpretation and practice is not consistent with the con-
fidentiality requirements under the international standard and should be
amended to conform to the standard. The standard requires both aspects of
Article 26(2) to be applied independently, i.e. information received in an EOI
request may only be disclosed to authorised persons under the DTC, regard-
less of how such secret information is treated under domestic law
185. For information classified as secret, Estonia’s domestic legislation
contains relevant confidentiality provisions under section 26 of the Taxation
Act:
“(1) The tax authorities and officials and other staff thereof are
required to maintain the confidentiality of information concern-
ing taxable persons, including all media (decisions, acts, notices
and other documents) concerning the taxable persons, informa-
tion concerning the existence of media, business secrets and
information subject to banking secrecy, which is obtained by the
authorities, officials or other staff in the course of verifying the
correctness of taxes paid, making an assessment of taxes, collect-
ing tax arrears, conducting proceedings concerning violations
of tax law or performing of other official duties (hereinafter tax
secrecy). The obligation to maintain tax secrecy continues after
the termination of a service relationship.
(2) Information subject to tax secrecy may only be disclosed

with the written permission of the taxable person or in the cases
VSHFLILHGLQVHFWLRQVRIWKLV$FW
8QOHVV RWKHUZLVH SURYLGHG E\ ODZ WKH RIILFLDOV DQG RWKHU
public servants employed by the agencies which receive infor-
PDWLRQFRQFHUQLQJWD[VHFUHF\SXUVXDQWWRVHFWLRQVRIWKLV
Act or in the performance of their official duties and persons
performing public law functions are required to maintain the
confidentiality of any information concerning taxable persons
which became known to them concerning the taxable person. The
obligation to maintain tax secrecy continues after the termina-
tion of a service relationship.”
186. The same duty to maintain confidentiality also applies to experts who
may be involved in the proceedings (section 68(4), Taxation Act). The confi-
dentiality duty of tax officials is lifted in a number of situations, as provided
under section 26(2) above.
187. It is also noted that there are no sanctions for breach of the confiden-
tiality provisions under the Taxation Act. Under the Public Information Act, a
holder of information is required to classify as information intended for inter-
nal use data collected on a person during the process of taxation, except data
concerning tax arrears (subsection 34(1)16)). Disclosure or release of infor-
mation intended for internal use is punishable by a fine of up to EUR 1 200
(subsection 541(1), Public Information Act).
All other information exchanged (ToR C.3.2)

188. Confidentiality rules should apply to all types of information
exchanged, including information provided in a request, information trans-
mitted in response to a request and any background documents to such
requests. Estonia’s DTCs and domestic law specify that the confidentiality
rules spelt out in the DTCs apply to all information received, albeit in accord-
ance with Estonia’s interpretation, as noted above.
Determination
recommendations
According to Estonia’s interpretation of Estonia should ensure that all
treaty provisions based on Article 26(2) information received under an EOI
of the OECD Model Convention, cer- request, regardless of how they are
tain information received by Estonia classified under Estonia’s domestic
under an EOI request may be clas- laws, are disclosed only to authorised
sified as public information under persons under the DTCs.
Estonia domestic laws and as such
may be disclosed to the public.
C.4. Rights and safeguards of taxpayers and third parties

The exchange of information mechanisms should respect the rights and
safeguards of taxpayers and third parties.
189. The international standard allows requested parties not to supply infor-
mation in response to a request in certain identified situations where an issue of
trade, business or other secret may arise. Among other reasons, an information
request can be declined where the requested information would disclose con-
fidential communications protected by the attorney-client privilege. Attorney-
client privilege is a feature of the legal systems of many countries.
190. However, communications between a client and an attorney or other
admitted legal representative are, generally, only privileged to the extent
that, the attorney or other legal representative acts in his or her capacity as an
attorney or other legal representative. Where attorney-client privilege is more
broadly defined it does not provide valid grounds on which to decline a request
for EOI. To the extent, therefore, that an attorney acts as a nominee shareholder,
a trustee, a settlor, a company director or under a power of attorney to represent
a company in its business affairs, EOI resulting from and relating to any such
activity cannot be declined because of the attorney-client privilege rule.
Exceptions to requirement to provide information (ToR C.4.1)

191. All of Estonia’s DTCs ensure that the contracting states are not obliged
to provide information which would disclose any trade, business, industrial,
commercial or professional secret or information the disclosure of which would
be contrary to public policy. Those rights and safeguards are incorporated into
Estonia’s domestic law by virtue of section 64 of the Taxation Act.
Determination
C.5. Timeliness of responses to requests for information

The jurisdiction should provide information under its network of agreements
in a timely manner.
Responses within 90 days (ToR C.5.1)

192. There are no provisions in Estonia’s laws or DTCs pertaining to the time-
liness of responses or the timeframe within which responses should be provided.
As such, there appear to be no legal restrictions on the ability of Estonian tax
authorities from responding to EOI requests within 90 days of receipt by provid-
ing the information requested or providing an update on the status of the request.
A review of the practical ability of Estonian tax authorities to respond to requests
in a timely manner will be conducted in the course of its Phase 2 review.
Organisational process and resources (ToR C.5.2)

193. A review of Estonia’s organisational process and resources will be
conducted in the context of its Phase 2 review.
Absence of restrictive conditions on exchange of information

(ToR C.5.3)
194. Exchange of information assistance should not be subject to unrea-
sonable, disproportionate, or unduly restrictive conditions. As noted in Part
B of this Report, there are no aspects of Estonia’s domestic laws that appear
to impose additional restrictive conditions on exchange of information.
Determination
The assessment team is not in a position to evaluate whether this
element is in place, as it involves issues of practice that are dealt with in
the Phase 2 review.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS – 63
Summary of Determinations and Factors

Underlying Recommendations
Determination Factors underlying Recommendations

recommendations
Jurisdictions should ensure that ownership and identity information for all relevant entities
and arrangements is available to their competent authorities (ToR A.1)
The element is in Companies incorporated In such cases, Estonia
place, but certain legal outside of Estonia but having should ensure that ownership
aspects of the legal their effective management and identity information is
implementation of in Estonia which gives rise to available.
this element require a permanent establishment
improvement. are not required to provide
information identifying
their owners as a part of
registration requirements.
Therefore, the availability of
information that identifies any
owners of such companies will
generally depend on the law
of the jurisdiction in which the
company is incorporated and
so may not be available in all
cases.
Designation of the An obligation should be
beneficiaries is not mandatory established for foundations to
under the Foundations Act ensure that information on the
and it is unclear whether identity of the beneficiaries is
accounting information systematically available to the
kept by the management competent authorities.
board is sufficient to
ascertain the identity of the
beneficiaries.
64 – SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS

recommendations
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities
and arrangements (ToR A.2)
Banking information should be available for all account-holders (ToR A.3)
The element is in
place.
Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information) (ToR B.1)
The element is not in Estonia requires the name Estonia should amend its laws
place. of the bank account holder so that it can access bank
before it is able to access account information once the
and exchange relevant bank identity of the person under
account information. examination is established.
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested
jurisdiction should be compatible with effective exchange of information (ToR B.2)
The element is in With regard to EOI requests Estonia should amend its
place, but certain legal which concern a taxpayer laws to be able to exchange
aspects of the legal residing in Estonia or in a third information without requiring
implementation of non-EU State, the Estonian the taxable person’s consent
this element require tax authorities need to obtain in all cases.
improvement. the taxable person’s consent
before transmitting the
requested information to the
requesting State.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS – 65

recommendations
Exchange of information mechanisms should allow for effective exchange of information
(ToR C.1)
The element is not in It is not clear that Estonia’s Estonia should amend its
place. legal framework would allow legislation so that it can give
the terms of its agreements full effect to the terms of its
to be given full effect due EOI arrangements.
to limitations in Estonia’s
domestic law regarding access
to bank information.
One of Estonia’s agreements Estonia should renegotiate its
does not provide for effective agreements as necessary so
exchange of information. that they provide for effective
exchange of information.
Some of Estonia’s DTCs with Estonia should work with
jurisdictions which are not be the relevant DTC partners
able to access information to incorporate Article 26(5)
held by banks or fiduciaries OECD Model Tax Convention
for the purpose of EOI do not into these DTCs.
contain a provision similar to
Article 26(5) OECD Model
Tax Convention, resulting in
an impediment to the effective
EOI for tax of purposes.
The jurisdictions’ network of information exchange mechanisms should cover all relevant
partners (ToR C.2)
The element is in Estonia has a comprehensive Estonia should ensure it gives
place, but certain legal network of EOI arrangements full effect to the terms of its
aspects of the legal with relevant partners but the EOI arrangements in order
implementation of issues identified in respect to allow for full exchange of
this element require of element B.1 need to be information to the standard
improvement. addressed. with all its relevant partners.
Estonia is actively seeking Estonia should continue
to expand its network of to develop its exchange of
information exchange information network with all
mechanisms. relevant partners, and take
all steps necessary to bring
concluded agreements into
effect as quickly as possible.
66 – SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS

recommendations
The jurisdictions’ mechanisms for exchange of information should have adequate provisions
to ensure the confidentiality of information received (ToR C.3)
The element is in According to Estonia’s Estonia should ensure that all
place, but certain legal interpretation of treaty information received under
aspects of the legal provisions based on an EOI request, regardless of
implementation of Article 26(2) of the OECD how they are classified under
this element require Model Convention, certain Estonia’s domestic laws, are
improvement. information received by disclosed only to authorised
Estonia under an EOI request persons under the DTCs.
may be classified as public
information under Estonia
domestic laws and as such
may be disclosed to the public.
The exchange of information mechanisms should respect the rights and safeguards of
taxpayers and third parties (ToR C.4)
The jurisdiction should provide information under its network of agreements in a timely
manner (ToR C.5)
The element is not The assessment team is not in
assessed. a position to evaluate whether
this element is in place, as it
involves issues of practice that
are dealt with in the Phase 2
review.
ANNEXES – 67
Annex 1: Jurisdiction’s Response to the Review Report*
Estonia is committed to the international standards for transparency and

exchange of tax information and will consider the recommendations made in
the Peer Review report carefully. We are grateful to the assessment team and
representatives of the Global Forum Secretariat for their thorough work on
the report, which has pointed out certain aspects of our legislation that could
benefit from clarification and improvement.
Estonia is making constant efforts to establish a broad and effective tax
treaty network. Most relevant economic partners are covered by treaties and
recently the treaty with Cyprus was initialled, which upon enforcement will
complete our tax treaty network with all the members of the European Union.
In case of treaties that do not meet internationally accepted standards we are
ready to start re-negotiation process.
Estonia would like to emphasize that the limitation in our domestic law
regarding access to bank information (raised under elements B.1, C.1 and
C.2) has never hindered the effectiveness of exchange of information with
our treaty partners.
As members to the European Union we are also exchanging bank infor-
mation automatically with other member states and certain third countries or
territories in compliance with the EU Savings Directive.
We have also started the legislative process to implement the new EU
directives on mutual assistance and administrative cooperation in the field
of taxation. These will ensure that the Article 26 of the OECD Model Tax
Convention is implemented in the EU as regards the exchange of information.
* This Annex presents the Jurisdiction’s response to the review report and shall
not be deemed to represent the Global Forum’s views.
68 – ANNEXES
Annex 2: List of All Exchange-of-Information Mechanisms

in Force
Multilateral agreements
Estonia is a party to the:

(8&RXQFLO'LUHFWLYH((& of 19 December 1977 (as amended)
concerning mutual assistance by the competent authorities of the
Member States in the field of direct taxation and taxation of insurance
premiums. This Directive came into force on 23 December 1977 and
all EU members were required to transpose it into national legislation
by 1 January 1979. The current EU members, covered by this Council
Directive, are: Austria, Belgium, Bulgaria, Cyprus21’ 22, Czech Republic,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland,
Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland,
Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United
Kingdom.
(8&RXQFLO'LUHFWLYH(& of 3 June 2003 on taxation of sav-
ings income in the form of interest payments. This Directive aims
at ensuring: (i) that savings income in the form of interest payments
in favour of individuals or residual entities being resident of an EU
Member State are effectively taxed in accordance with the fiscal laws
of their state of residence; and (ii) that information is exchanged with
respect to such payments.
21. Note by Turkey: The information in this document with reference to “Cyprus”
relates to the southern part of the Island. There is no single authority represent-
ing both Turkish and Greek Cypriot people on the Island. Turkey recognises the
Turkish Republic of Northern Cyprus (TRN C). Until a lasting and equitable
solution is found within the context of the United Nations, Turkey shall preserve
its position concerning the “Cyprus issue”.
22. Note by all the European Union Member States of the OE CD and the European
Nations with the exception of Turkey. The information in this document relates to
the area under the effective control of the Government of the Republic of Cyprus.
ANNEXES – 69
Bilateral agreements
EOI agreements signed by Estonia as of 21 December 2010, in alphabetical

order:
Jurisdiction Type of EoI Date Signed Date of
Arrangement becoming
applicable
1 Albania DTC 5-Apr-10 01-Jan-11
2 Armenia DTC 14-Apr-01 01-Jan-04
3 Austria DTC 05-Apr-01 01-Jan-03
4 Azerbaijan DTC 30-Oct-07 01-Jan-09
5 Belarus DTC 21-Jan-97 01-Jan-99
6 Belgium DTC 05-Nov-99 01-Jan-04
7 Bulgaria DTC 13-Oct-08 01-Jan-09
8 Canada DTC 02-Jun-95 01-Jan-96
9 China DTC 12-May-98 01-Jan-00
10 Croatia DTC 03-Apr-02 01-Jan-05
11 Czech Republic DTC 24-Oct-94 01-Jan-96
12 Denmark DTC 04-May-93 01-Jan-94
13 Finland DTC 23-Mar-93 01-Jan-94
14 France DTC 28-Oct-97 01-Jan-96
15 Former Yugoslav Republic DTC 20-Nov-08 01-Jan-10
of Macedonia
16 Georgia DTC 18-Dec-06 01-Jan-08
17 Germany DTC 29-Nov-96 01-Jan-94
18 Greece DTC 04-Apr-06 01-Jan-09
19 Hungary DTC 11-Sep-02 01-Jan-05
20 Iceland DTC 16-Jun-94 01-Jan-96
21 Ireland DTC 16-Dec-97 01-Jan-99
22 Isle of Man DTC 08-May-09 01-Jan-10
23 Israel DTC 29-Jun-09 01-Jan-10
24 Italy DTC 20-Mar-97 01-Jan-01
25 Jersey DTC 21-Dec-10 --
26 Kazakhstan DTC 01-Mar-99 01-Jan-01
27 Korea (Republic of) DTC 23-Sep-09 01-Jan-11
70 – ANNEXES
Jurisdiction Type of EoI Date Signed Date of

Arrangement becoming
applicable
28 Latvia DTC 11-Feb-02 01-Jan-02
29 Lithuania DTC 21-Oct-04 01-Jan-06
30 Luxembourg DTC 23-May-06 01-Jan-08
31 Malta DTC 03-May-01 01-Jan-04
32 Moldova DTC 23-Feb-98 01-Jan-95
33 Netherlands DTC 14-Mar-97 01-Jan-95
34 Norway DTC 14-May-93 01-Jan-94
35 Poland DTC 09-May-94 01-Jan-95
36 Portugal DTC 13-May-03 01-Jan-05
37 Romania DTC 23-Oct-03 01-Jan-06
38 Russia DTC 05-Nov-02 --
39 Serbia DTC 24-Sep-09 01-Jan-11
40 Singapore DTC 18-Sep-06 01-Jan-08
41 Slovak Republic DTC 21-Oct-03 01-Jan-07
42 Slovenia DTC 13-Sep-05 01-Jan-07
43 Spain DTC 03-Sep-03 01-Jan-05
44 Sweden DTC 05-Apr-93 01-Jan-94
45 Switzerland DTC 11-Jun-02 01-Jan-05
46 Turkey DTC 25-Aug-03 01-Jan-06
47 Ukraine DTC 10-May-96 01-Jan-97
48 United Kingdom DTC 12-May-94 01-Jan-95
49 United States DTC 15-Jan-98 01-Jan-00
ANNEXES – 71
Annex 3: List of all Laws, Regulations

and Other Material Received
All up-to-date legislation in force is available in Estonian on the website

of the Official Gazette at www.riigiteataja.ee. Most of the relevant legislation
is also available in English at ZZZOHJDOWH[WHHHQDQGPHEDDVDYDDVS"P .
The Constitution of the Republic of Estonia, 1992
Taxation Act, 2002 (consolidated text January 2010)
Accounting Act, 2002 (consolidated text October 2005)
Authorised Public Accountants Act, 1999 (consolidated text March 2003)
Commercial Code, 1995 (consolidated text March 2003)
Estonian Central Register of Securities Act, 2000 (consolidated text April
2004)
General Part of the Civil Code Act, 2002
Code of Civil Procedure, 2005
Administrative Procedure Act, 2001 (consolidated text December 2003)
Commercial Associations Act, 2001 (consolidated text March 2004)
Building Association Act, 2004
Foundations Act, 1995 (consolidated text December 2004)
Non-profit Associations Act, 1996 (consolidated text October 2005)
Law of Obligations Act, 2001 (consolidated text May 2009)
Credit Institutions Act, 1999 (consolidated text December 2006)
Investment Funds Act, 1997 (consolidated text July 2003)
Insurance Activities Act, 2000 (consolidated text July 2009)
72 – ANNEXES
Money Laundering and Terrorist Financing Prevention Act, 1998 (con-

solidated text March 2004, without the 2009 amendments which entered into
force in 2010)
Penal Code, 2001 (consolidated text April 2008)
Personal Data Protection Act, 2007
State Secrets and Classified Information of Foreign States Act, 2006
Public Information Act, 2000 (consolidated text July 2009)
Estonia’s double tax conventions
ANNEXES – 73
Annex 4: Overview of Laws and Other Relevant Factors

for Exchange of Information
Primary legislation
The Constitution of the Republic of Estonia
Taxation Act
Accounting Act
Commercial Code
Estonian Central Register of Securities Act
Administrative Procedure Act
Credit Institutions Act
Money Laundering and Terrorist Financing Prevention Act (MLTFP Act)
Primary government authorities

Riigikogu (Estonian Parliament)
Estonian Tax and Customs Board
Estonian Central Register of Securities
Bank of Estonia
Financial Supervision Authority (FSA)
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
The OECD is a unique forum where governments work together to address the
economic, social and environmental challenges of globalisation. The OECD is also at the
forefront of efforts to understand and to help governments respond to new developments
and concerns, such as corporate governance, the information economy and the challenges of
an ageing population. The Organisation provides a setting where governments can compare
policy experiences, seek answers to common problems, identify good practice and work to
co-ordinate domestic and international policies.
The OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the
Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland,
Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland,
Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom
and the United States. The European Commission takes part in the work of the OECD.
OECD Publishing disseminates widely the results of the Organisation’s statistics gathering
and research on economic, social and environmental issues, as well as the conventions,
guidelines and standards agreed by its members.
OECD PUBLISHING, 2, rue André-Pascal, 75775 PARIS CEDEX 16

(23 2011 19 1 P) ISBN 978-92-64-10874-5 – No. 58107 2011
Global Forum on Transparency and Exchange of Information GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
for Tax Purposes
OF INFORMATION FOR TAX PURPOSES
PEER REVIEWS, PHASE 1: ESTONIA
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
multilateral framework within which work in the area of tax transparency and exchange
of information is carried out by over 100 jurisdictions which participate in the work of the
Global Forum on an equal footing.
Peer Review Report
The Global Forum is charged with in-depth monitoring and peer review of the
implementation of the standards of transparency and exchange of information for tax
Phase 1
purposes. These standards are primarily reflected in the 2002 OECD Model Agreement
on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the
Legal and Regulatory Framework
OECD Model Tax Convention on Income and on Capital and its commentary as updated in
2004, which has been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant
information for the administration or enforcement of the domestic tax laws of a requesting
ESTONIA
party. “Fishing expeditions” are not authorised, but all foreseeably relevant information
must be provided, including bank information and information held by fiduciaries,
regardless of the existence of a domestic tax interest or the application of a dual
Peer Review Report Phase 1 Legal and Regulatory Framework ESTONIA

criminality standard.
All members of the Global Forum, as well as jurisdictions identified by the Global Forum
as relevant to its work, are being reviewed. This process is undertaken in two phases.
Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory framework for
the exchange of information, while Phase 2 reviews look at the practical implementation of
that framework. Some Global Forum members are undergoing combined – Phase 1 plus
Phase 2 – reviews. The ultimate goal is to help jurisdictions to effectively implement the
international standards of transparency and exchange of information for tax purposes.
All review reports are published once approved by the Global Forum and they thus
represent agreed Global Forum reports.
For more information on the work of the Global Forum on Transparency and Exchange of
Information for Tax Purposes, and for copies of the published review reports, please visit
www.oecd.org/tax/transparency.

OECD (2011), Global Forum on Transparency and Exchange of Information for Tax Purposes
Peer Reviews: Estonia 2011: Phase 1: Legal and Regulatory Framework, Global Forum on
Transparency and Exchange of Information for Tax Purposes: Peer Reviews, OECD Publishing.
http://dx.doi.org/10.1787/9789264108752-en
This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical
databases. Visit www.oecd-ilibrary.org, and do not hesitate to contact us for more information.
ISBN 978-92-64-10874-5
www.oecd.org/publishing
23 2011 19 1 P -:HSTCQE=VU]\YZ:
232011191cov-ESTONIA.indd 1 11-Apr-2011 10:29:29 AM

Peer Review Report: Phase 1 - Estonia

Cargado por

Información del documento

Descripción original:

Derechos de autor

Formatos disponibles

Compartir este documento

Compartir o incrustar documentos

Opciones para compartir

¿Le pareció útil este documento?

¿Este contenido es inapropiado?

Copyright:

Formatos disponibles

Peer Review Report: Phase 1 - Estonia

Cargado por

Copyright:

Formatos disponibles

Global Forum on Transparency and Exchange of Information GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE

for Tax Purposes

Peer Review Report Phase 1 Legal and Regulatory Framework ESTONIA

Please cite this publication as:

Please cite this publication as:

ISBN 978-92-64-10874-5 (print)

Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.

About the Global Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Compliance with the Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Summary of Determinations and Factors Underlying Recommendations. . . . 63

Annex 1: Jurisdiction’s Response to the Review Report . . . . . . . . . . . . . . . . . . 67

About the Global Forum

The Global Forum on Transparency and Exchange of Information for Tax

identity, accounting and banking information, and in many instances to provide

Information and methodology used for the peer review of Estonia

9. The assessment of the legal and regulatory framework of Estonia

Governance and economic context

General information on the legal system and taxation system

1. Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia,

solved according to the codifications. Estonian law is basically divided into

Overview of commercial laws and other relevant factors for

Overview of the financial sector and relevant professions

Compliance with the Standards

22. Effective exchange of information requires the availability of reliable

A.1. Ownership and identity information

Companies (ToR A.1.1)

Information kept by public authorities

Private limited company

33. If so decided by the shareholders, the shares may be entered in the

Public limited company

and personal identification code or registry code of each shareholder, as well

Information kept by companies

Regulated activities and service providers

57. The FIU exercises supervision over fulfilment of the requirements

tractual legal arrangement on the basis of information provided in

Bearer shares (ToR A.1.2)

Partnerships (ToR A.1.3)

Information kept by public authorities

Anti-money laundering laws

Foundations (ToR A.1.5)

Enforcement provisions to ensure availability of information

incorrect documents to a tax authority, failure to comply with the requirements

Other relevant entities and arrangement

Determination and factors underlying recommendations

A.2. Accounting records

(iii) allow financial statements to be prepared. Accounting records should

General requirements (ToR A.2.1) and Underlying documentation

 the date of the business transaction;

Document retention (ToR A.2.3)

documents which are necessary for reconstructing business transactions

Determination and factors underlying recommendations

A.3. Banking information

Record-keeping requirements (ToR A.3.1)

the market price of the specified property, an exact description of the

Determination and factors underlying recommendations

102. A variety of information may be needed in a tax enquiry and jurisdic-

in certain cases. Due to the importance of effective access to bank informa-

B.1. Competent Authority’s ability to obtain and provide information

Bank, ownership, and identity information (ToR B.1.1) and

Ownership and identity information and accounting records

115. In Estonia, banks are required to maintain general confidentiality of

Powers to obtain information

subsection 61(2)) to present things8 and bearer securities or submit documents

the date of the business transaction;