Paying Dividends from an Estonian OÜ

Profit that stays in an Estonian private limited company (OÜ) is not taxed; it is taxed when it is paid out, for example as a dividend. This guide shows when an OÜ may pay a dividend, who decides it, what the company must check first, and how the tax on it is declared and paid — each step with its source in the Commercial Code and the Income Tax Act.

The guide is general information, not legal or tax advice for a particular company. A shareholder who lives abroad should also ask a tax adviser in their own country.

When a dividend may be paid

From profit shown in an approved annual report. Dividends may be paid from net profit or from retained profit of previous years, after the losses of previous years are deducted, on the basis of the approved annual report (Commercial Code § 157(1)).
Only if the net assets allow it. No payment may be made to shareholders if the net assets, as shown in the annual report approved for the previous financial year, are or would become less than the share capital plus the reserves that may not be paid out under the law or the articles of association (§ 157(3)).
In proportion to the shares. Each shareholder receives a dividend in proportion to the nominal value of their share, unless the articles of association provide otherwise (§ 157(2)).
In money. The dividend is paid in money; with the shareholder's consent it may also be paid in other assets (§ 157(5)).

If the articles of association provide for a legal reserve, it must be at least one-tenth of the share capital, at least one-twentieth of each year's net profit goes into it until it reaches that amount, and nothing is paid to shareholders from it (§ 160(2)–(3), § 161(2)).

Who decides

After the financial year the management board prepares the annual report and submits it to the shareholders together with a proposal for the distribution of profit (Commercial Code § 179(1)–(2)). The shareholders approve the annual report, and the board submits the approved report with the profit distribution proposal to the commercial register within six months after the end of the financial year (§ 179(3)–(4)). A shareholder has the right to demand the dividend that a resolution of the shareholders prescribes (§ 157(4)).

In a company with one shareholder, that shareholder takes the decisions alone; the same rules on profit and net assets apply.

If a dividend is paid without a basis

A shareholder who receives a dividend they have no right to must return it, and the members of the management board who caused the payment are jointly liable for its return (Commercial Code § 158(1) and (6)). The check of the annual report and the net assets therefore protects the board as well as the creditors.

The tax on a dividend

The company pays it when the dividend is paid. A resident company pays income tax on profit distributed as dividends upon payment (Income Tax Act § 50(1)). Our guide how Estonia taxes company profit explains the rate as the Tax and Customs Board states it.
It is declared the following month. The company submits the tax return on the payments of the previous calendar month to the Tax and Customs Board by the tenth day of the following month (§ 54(2)) and pays the tax by the same day (§ 54(4)).
A shareholder abroad. The country where the shareholder lives may tax the dividend under its own law and its tax treaty with Estonia. Our page an Estonian company run from abroad shows where to look first.

A dividend step by step

The financial year ends; the books are closed.
The board prepares the annual report and the profit distribution proposal.
The board checks the net assets against the share capital and the reserves that may not be paid out.
The shareholders approve the annual report and decide on the dividend.
The approved annual report goes to the commercial register within six months after the financial year.
The company pays the dividend, then declares and pays the income tax by the tenth day of the following month.

What we do

monthly accounting — from €150 / month; tell us before a dividend is paid, so that the month's books and tax return include it;
the annual report — from €450, prepared and submitted to the commercial register;
for a company without turnover: the annual report for a company without turnover — €450 / report.

Tax advice in the shareholder's country of residence is not included.

Prices exclude VAT. All communication takes place by email.

Ready to start? Ongoing bookkeeping for an Estonian company — the books and the monthly tax return include the dividend when you tell us before the payment. 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.

Commercial Code — Riigi Teataja, English translation
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.

Frequently asked questions

How do I pay a dividend from my Estonian OÜ?

From profit shown in the approved annual report, and only if the net assets stay at least equal to the share capital plus the reserves that may not be paid out (Commercial Code § 157). The management board proposes the distribution and the shareholders decide. The company pays income tax on the dividend when it is paid and declares and pays it by the 10th day of the following month (Income Tax Act §§ 50 and 54). Our guide explains each step.

Paying a dividend from an Estonian OÜ