Board Member Fee or Dividend from Abroad

If you run your Estonian private limited company (OÜ) from abroad, there are two usual ways to take money out of it: a fee for your work as a management board member, or a dividend as a shareholder. Estonian law taxes them very differently. This guide sets out what the Estonian Income Tax Act and Social Tax Act say about each, and what they leave to your country of residence.

The guide is general information, not tax advice. The rules were read in the English translations in Riigi Teataja: the Income Tax Act on 16 October 2026 and the Social Tax Act, version in force from 22 May 2026, on 17 October 2026. How your own country taxes the same money depends on its law and on its tax treaty with Estonia. Ask a tax adviser there before the first payment.

A board member's fee

Taxed in Estonia even if you live abroad. Income tax is charged on what a non-resident receives for performing the duties of a management board member of an Estonian company (Income Tax Act § 29(2)).
22% income tax, withheld by the company. The company withholds income tax from the board fee paid to a non-resident (§ 41 clause 2) at the general rate of 22% (§ 43(1) clause 1, § 4(1)). For a non-resident, the tax withheld is the final Estonian income tax on that payment (§ 43(4)).
A tax treaty can lower the rate. If a treaty sets a lower withholding rate, it applies once the company has submitted to the Tax and Customs Board a document certifying who receives the income and where the recipient is tax resident (§ 43(2)).
33% social tax on top. Social tax is paid on remuneration to a member of a management body (Social Tax Act § 2(1) clause 4) at 33% of the taxable amount (§ 7(1)). A resident legal person pays it (§ 4 clause 1) — the company, on top of the fee. Payments that an international agreement says are not taxed in Estonia are exempt (§ 3 clause 15).

Whether your country of residence covers you for social security instead is decided under the EU rules on the coordination of social security systems (Regulation (EC) No 883/2004) and that country's institution. Settle it before the first payment.

A dividend

The company pays the tax when it distributes. A resident company pays income tax on profit distributed as dividends when it pays them (Income Tax Act § 50(1)). The tax is computed by dividing the amount by 0.78 before applying the 22% rate (§ 4(1¹), § 4(1)) — so it is 22/78 of the net dividend.
No social tax. A dividend is not among the payments on which the Social Tax Act charges social tax (§ 2(1)).
Declared by the 10th. The company files the tax return for the previous month's distributions by the tenth day of the month (Income Tax Act § 54(2)).
Only from distributable profit. A dividend is paid from profit shown in the approved annual report, and only while net assets stay large enough. Our guide to paying dividends from an Estonian OÜ explains each step.

Board fee or dividend?

A board fee carries Estonian income tax and 33% social tax.
A dividend carries only the company's income tax on distribution. It can be paid only after the annual report is approved and from profit.
A board member does not have to be paid a fee. A management board member service agreement can state that the work is done without remuneration, or set the fee.
Your country of residence may tax either payment again or give a credit for the Estonian tax. That is the question for your adviser there. Our guides for owners in Finland, Germany, Poland, Spain and Italy show those countries' rules with their sources.

What we do

monthly accounting, with the monthly declarations to the Tax and Customs Board where fees are paid (by agreement) — from €150 / month;
a management board member service agreement — €180;
the annual report a dividend needs — from €450.

We do not give tax advice for your country of residence. You can order monthly accounting online. Prices exclude VAT. All communication takes place by email.

Ready to start? Ongoing bookkeeping with the monthly declarations to the Tax and Customs Board where fees are paid. Order.

Official sources

The laws this article names, by the name of their official text, as read on 9 October 2026. For the Estonian acts we read the English translation in Riigi Teataja; the legally binding text is the Estonian one.

Income Tax Act — Riigi Teataja, English translation

Sources are named in the text, without links. To see which of our services your company needs, open the Business Navigator.

Board member fee or dividend: paying yourself from abroad