At the center of the controversy in this matter was the question of when the balance sheet of an Estonian company should be drawn up and when the taxable equity capital with income tax should be calculated.
The Supreme Court overturned the position of the lower courts and the Tax and Customs Council that the tax base must be the balance sheet of the Estonian company drawn up as of the balance sheet date of the merger. Here, for clarity, up to eight months can elapse between the day of the merger balance sheet and the cancellation from the register of the merged company. This is a fairly long period, during which the activities of the merged company will continue at their usual pace.
The Supreme Court held unequivocally that taxation should be based on the amount of net assets at the time of cancellation from the register and further explained the obligations of the incorporating company in the period between the date of the merger balance sheet and the cancellation of the incorporating company from the register .
Supreme Court decision in administrative case no. 3-20-2630 is important from the point of view of uniform interpretation and development of practice, as it clearly highlighted that, although the company is not required to prepare an annual report for the period following the balance sheet date of the merger, From that moment on, the accounting obligation of the company being incorporated does not cease.
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2024-01-24 13:34:00
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