The Estonian government has recently approved draft legislation to amend the Income Tax Act based on amendments made to the EU Parent-Subsidiary Directive in 2014 and 2015 concerning hybrid mismatches and anti-avoidance provisions. The proposed amendments include that:
- The tax exemption for dividends received from a subsidiary in another EU Member State will not apply if the dividend payments are treated as deductible for the subsidiary; and
- The tax exemption for dividends or other profit di…