As of January 1, 2021, a special investment fund will be an alternative to the Estonian CIT. It is intended to allow taxpayers (who have not taken advantage of the Estonian CIT) to include as tax deductible expenses write-offs for a separate fund established for investment purposes in the capital reserve. It will be possible to recognize the write-offs as tax expenses, provided that their amount corresponds to the value of the company’s profit earned in the year preceding the tax year, and the equivalent of the cash corresponding to the value of the write-off is actually transferred to a separate special settlement account. It will also be a condition for recognizing a tax expense that these funds are spent for investment purposes.
