On 10 April 2024, Estonia’s parliament passed the Act supplementing the Tax Information Exchange Act, the Taxation Act, and the Income Tax Act (379 SE). This law outlines the requirements for the implementation of public CbC reporting in accordance with the Council Directive (EU) 2021/2101. Additionally, the Act provides the return requirements for enforcing the Pillar 2 global minimum tax under Council Directive (EU) 2022/2523.

This includes the introduction of the Pillar 2 income inclusion rule (IIR) and the undertaxed payment/profit rule (UTPR) to ensure a minimum corporate tax of 15% for large multinational (MNE) groups with annual consolidated revenue of at least EUR 750 million in at least two of the preceding four fiscal years. It also proposes implementing a qualified domestic minimum top-up tax (QDMTT) for members of in-scope groups and certain safe harbors.  The IIR and QDMTT apply for financial periods beginning on or after 31 December 2023, while the UTPR generally applies for financial periods beginning on or after 31 December 2024.

Regarding public Country-by-Country (CbC) reporting, the Act allows the tax authority to publish the necessary information on its website for financial years starting on or after 22 February 2024 as per the standard CbC reporting requirements.

Concerning the Pillar 2 global minimum tax, Estonia decided to postpone the implementation of the Income Inclusion Rule (IIR) and the Undertaxed Payment/Profit Rule (UTPR) under Article 50 of Council Directive (EU) 2022/2523. However, Estonia has decided to adopt specific measures mandated by the Directive, such as the criteria for determining the locations of group entities and the requirements for declaring minimum tax. Specifically, it stipulates that an ultimate parent entity of a group in Estonia must nominate an entity to file the tax return in another EU Member State.

On 12 February 2024, a draft bill was introduced to the Estonian Parliament to incorporate the EU Public Country-by-Country (CbC) Reporting Directive into Estonian legislation.

Previously, On 8 February 2024, Estonia’s Ministry of Finance passed the draft legislation to postpone the implementation of the Pillar 2 global minimum tax until the year 2030.