Estonian CIT will not be collected from companies providing aid to citizens of Ukraine

The regulation provides for the abandonment of the collection of lump-sum tax on the income of companies in connection with counteracting the effects of warfare on the territory of Ukraine on the income generated from expenses not related to business activity, in connection with the transfer in the form of donations or in connection with gratuitous benefits performed for the benefit of entities listed in Article 38w, paragraph 1 of the CIT Act in order to counteract the effects of warfare on the territory of Ukraine. The omission applies to donations and gratuitous benefits realised from 24 February 2022 to 31 December 2022.

According to the indicated Article 38w(1) of the CIT Act, the entities to which taxpayers taxed with Estonian CIT may make donations or provide gratuitous benefits to Ukrainian citizens are:

– public benefit organisations or equivalent organisations as defined in the legislation regulating public benefit activities applicable in Ukraine,

– local self-government units,

– Government Strategic Reserve Agency,

– entities performing on the territory of Poland or Ukraine medical activity or activity in the field of medical rescue.

Abandonment of collection of the lump sum is to cover all benefits, regardless of their type, and therefore monetary, in-kind and gratuitous benefits provided or performed for the benefit of these entities.