Selected legal and practical aspects of the risk of losing the right to lump sum tax on corporate income

Abstract

The subject of this article is an analysis of the determinants related to the loss of the right to lump-sum taxation on corporate income, commonly known as Estonian CIT. The author analyzes a catalog of negative conditions contained in the CIT Act, the existence of which obliges taxpayers to return to the classic taxation model. Particular attention is paid to dynamic employment conditions and stringent requirements regarding, among other things, the timely preparation and signing of tax reports. The article analyzes the current interpretation, which indicates a lack of tolerance for even temporary violations of statutory limits. The final conclusion points to the need to introduce remedial (corrective) mechanisms that would protect taxpayers from the severe consequences of inadvertent formal errors.