Estonia is located in Northern Europe, bordered by the Baltic Sea to the west, the Gulf of Finland to the north, Latvia to the south, and Russia to the east. It is part of the Baltic region. As of early 2023, Estonia's population is estimated to be slightly over 1.3 million people. The country has experienced demographic changes, including aging population and migration trends.
Estonia's history is marked by periods of foreign rule by Danish, Swedish, German, and Russian powers. The country declared independence from Soviet Russia in 1918, faced occupation by the Soviet Union in 1940, and regained independence in 1991 after the collapse of the USSR. Estonia's journey since regaining independence has been characterized by rapid modernization and integration into European and transatlantic structures, including joining the European Union and NATO in 2004.
Estonia continues to exhibit economic resilience and growth, with a significant focus on digital innovation and the technology sector. Its economy has shown a remarkable recovery from the COVID-19 pandemic, supported by its robust digital infrastructure and innovative e-government services. Estonia has also been proactive in adopting green energy solutions and focusing on sustainability as part of its economic development strategy.
The emphasis on digital technology and innovation has solidified Estonia's position as a leader in digital governance and e-services, fostering growth in ICT, cybersecurity, and e-commerce sectors. The country's commitment to sustainability and green energy is attracting investments in renewable energy, clean technology, and smart city solutions.
One of the most recent significant updates in Estonia's tax legislation involves changes to its corporate income tax system to enhance the business environment and investment climate. Estonia is known for its unique corporate tax model, where corporate income tax is only paid upon distribution of profits rather than on earned profit. The latest adjustments, which were discussed as part of the 2023 budgetary plans, include measures aimed at simplifying tax reporting requirements for small businesses and adjusting tax rates on certain distributions to encourage reinvestment of profits into the business.
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