Spain - Estonia tax treaty

You live in Spain and own an Estonian OÜ, or plan to found one. This page shows how the Estonia - Spain tax treaty splits the right to tax between the two countries, and what Spanish and Estonian law add. The Spanish law parts cite the consolidated statutes on the BOE (boe.es). Spanish law changes often and depends on your facts, so confirm each Spanish point with a Spanish tax adviser (asesor fiscal) before you act.

Treaty facts

In short

• e-Residency and an Estonian OÜ do not make you resident in Estonia. If you live in Spain, Spain taxes your worldwide income.
• If you run the OÜ from Spain, Spain can treat it as a Spanish company. The treaty has no simple tie-breaker for companies, and without an agreement the OÜ gets no treaty benefits.
• Estonia taxes your board member fee. A salary for work you do in Spain is taxed only in Spain.
• Estonia withholds no tax from your dividend. Spain taxes it at 19 to 30 percent, and you cannot credit the Estonian 22/78 company tax.
• The Spanish CFC rule (transparencia fiscal internacional) can tax the profit the OÜ keeps, unless the OÜ carries on a real economic activity.
• Spanish duties come with the OÜ: possibly RETA (self-employed social security), the modelo 720 return, and exit tax if you leave Spain.

Does e-Residency or an Estonian company make me tax resident in Estonia?

No. You are resident in Estonia only if you have your place of residence there or stay there 183 days in 12 consecutive months (TuMS § 6 lg 1). e-Residency and company ownership count for neither. The Estonian side is explained in our guide on founder residency, permanent establishment and CFC rules. The e-Residency programme says the same: personal taxes are declared in the country of your tax domicile (e-Residency).

Spain treats you as resident if you spend more than 183 days in Spain in the calendar year, or if the main centre of your activities or economic interests is in Spain (LIRPF art. 9.1). A spouse who is not legally separated and dependent minor children who live in Spain create a presumption that you are resident in Spain. You can rebut it.

If both countries treat you as resident, the treaty decides in this order: permanent home, centre of vital interests, habitual abode, nationality, and finally agreement between the two tax authorities (Art. 4(2) of the treaty). This happens mostly in the year of a move: Estonia counts from the day you arrive, while Spain looks at the whole calendar year.

Confirm with a local adviser: the Spanish law has no split-year rule. Ask how Spain applies the tie-breaker to the part of the year after a move, and which certificate it expects. Keep proof of the move (lease, registration, travel log).

Can Spain treat my Estonian company as a Spanish company?

Yes. Spain treats as resident any company whose place of effective management (sede de dirección efectiva) is in Spain, that is, where "the management and control of all its activities" is located (LIS art. 8.1). Estonia still treats the OÜ as resident, because it was founded under Estonian law (TuMS § 6 lg 2).

The treaty does not give the company to the state of effective management. The two tax authorities "shall endeavour to settle the question by mutual agreement", and without an agreement the company "shall not be entitled to claim any benefits provided by this Convention" (Art. 4(3) of the treaty). Protocol point II keeps this rule as long as Estonia does not use the place of management in its own law. The MLI does not change it, because both states reserved MLI Art. 4.

The result can be harsh. Spain can tax the OÜ's worldwide profit, and Estonia taxes its distributions, with no treaty relief on either side. The Spanish corporate tax rate is 25 percent. For periods that begin in 2026, a company with a turnover under 1 million euros in the previous period pays 19 percent on the first 50,000 euros and 21 percent on the rest, and the rates fall again from 2027 (LIS art. 29.1 and transitional provision 44). The way out is a mutual agreement under Art. 4(3), which you request through the mutual agreement procedure (see below). The Estonian exemption for profit of a foreign permanent establishment does not cover a company that is resident abroad as a whole.

EMTA says it plainly: "Income of Estonian companies is also taxed abroad when the management of Estonian companies occurs outside of Estonia" (EMTA).

Confirm with a local adviser: how many past years the Agencia Tributaria can assess for a company, and whether directors are personally liable. We found no published mutual agreement between Estonia and Spain on a dual-resident OÜ, so plan on the basis that relief is uncertain and slow.

What does Spain look at to decide where my company is managed?

Spain asks where "the management and control of all its activities" is located (LIS art. 8.1). In a mutual agreement, the two authorities also weigh the place of incorporation and "any other relevant economic and material factors" (Art. 4(3) of the treaty). In practice this is where the key decisions are really taken. If the only board member lives in Spain, negotiates and signs contracts there, and uses the bank and the e-signature from Spain, management is in Spain. A nominee or a contact person in Estonia who only signs what you send from Spain does not move it.

To keep management in Estonia, the facts must change, not only the paperwork:

• a board member resident in Estonia who has real authority and takes the strategic decisions;
• board meetings held in Estonia, with minutes;
• strategic decisions documented in Estonia;
• a real office and team in Estonia.

The e-Residency programme also suggests holding board meetings and taking strategic decisions in Estonia (e-Residency). Where this is not realistic, it is often better to accept that the OÜ is managed from Spain and plan for Spanish tax than to build paper substance. The Estonian evidence list is in our guide on founder residency, permanent establishment and CFC rules.

Confirm with a local adviser: which facts the Agencia Tributaria weighs today. We did not read Spanish rulings or court decisions on the place of effective management.

Does my work from home in Spain create a permanent establishment?

Often yes. A home office through which the OÜ carries on its business is "a fixed place of business", and it can be "a place of management" or "an office" (Art. 5(1) and 5(2)(a) and (c) of the treaty). A person who habitually concludes contracts in the name of the OÜ in Spain also creates a permanent establishment (Art. 5(5)). The MLI does not change these rules, because Estonia reserved MLI Art. 12 to 15. Spanish law has a similar definition, which lists places of management (sedes de dirección) and offices (TRLIRNR art. 13.1.a).

Spain can then tax the profit that belongs to the permanent establishment, priced at arm's length, after the expenses incurred for it (Art. 7(1) to 7(3) of the treaty). For a one-person OÜ that does all its work from Spain, this can be most of the profit. Spain taxes it at the corporate tax rates (TRLIRNR art. 19.1). The 19 percent Spanish tax on profit transferred abroad by a permanent establishment does not apply to a company resident in another EU state (TRLIRNR art. 19.2 and 19.3.a).

On the Estonian side, a dividend paid out of the profit of a permanent establishment in an EEA state bears no Estonian distribution tax (TuMS § 50 lg 1^1 p 2). The profit must still be reported on annex 7 of the TSD return (EMTA). Keep separate accounts for the permanent establishment from the start.

Confirm with a local adviser: how the Agencia Tributaria treats home offices today, and which registration and corporate tax returns a Spanish permanent establishment must file.

How is my board member fee taxed?

Estonia may tax the fee, because the treaty gives directors' fees of an Estonian company to Estonia (Art. 16 of the treaty). The Estonian authentic text names the management board (juhatus), so Art. 16 covers the board of an OÜ. The OÜ withholds 22 percent income tax wherever the board work is done (TuMS § 29 lg 2, § 41 p 2). It also pays 33 percent social tax, unless you give it an A1 certificate issued in Spain (SMS § 2 lg 1 p 4, § 7 lg 1). EMTA confirms that the company pays income tax and social tax in Estonia "regardless of the location where work is carried on" (EMTA).

As a resident of an EEA state, you can apply in writing to the OÜ to deduct the basic exemption of 700 euros a month before the 22 percent is computed, at one payer only (TuMS § 42 lg 1 and 2, § 23 lg 1). If you did not, you can claim it in an Estonian annual return (TuMS § 31^1 lg 2).

Spain taxes the fee as work income (LIRPF art. 17.2.e), in the general base at the progressive state and regional scales. Spain deducts "an amount equal to the income tax paid in Estonia" (Art. 23(1)(a)(i) of the treaty). The credit is the lower of the Estonian tax and the Spanish average rate on that income (LIRPF art. 80.1), so if your Spanish average rate is lower than 22 percent, the excess is lost. Estonian social tax is never credited in Spain: the Protocol says social security charges are not taxes on income (Protocol point I.1).

Confirm with a local adviser: whether your Spanish average rate covers the full Estonian 22 percent. More on the Estonian side: founder remuneration.

Where is a salary for work I do in Spain taxed?

Only in Spain. A salary for work done in Spain by a Spanish resident is "taxable only in that State" (Art. 15(1) of the treaty). Estonia taxes a non-resident's salary only for work done in Estonia (TuMS § 29 lg 1). EMTA confirms there is no Estonian declaration or tax for work done abroad, but "a tax liability may arise abroad" (EMTA). Spain taxes the salary as work income (LIRPF art. 17.1).

Days you work physically in Estonia can be taxed in Estonia from the first day, because the 183-day exception needs an employer that is not resident in Estonia (Art. 15(2)(b)). Spain then credits that Estonian tax (Art. 23(1)(a)(i); LIRPF art. 80). Keep a record of those days.

A board member fee is different: it stays taxable in Estonia under Art. 16 (see the section above). The Estonian rules for remote staff are in our guide on contractors and cross-border workers.

Confirm with a local adviser: how a Spanish resident paid by a foreign employer with no Spanish establishment declares and pays Spanish tax during the year, and whether Spain treats the salary of a controlling owner as employment at all.

Which social security applies to me, and must I register as autonomo?

The tax treaty does not decide this, because social security charges are not taxes under it (Protocol point I.1). EU Regulation 883/2004 applies the law of one state only (Regulation (EC) No 883/2004). If you work only in Spain, Spanish law applies (Art. 11(3)(a)). If you work habitually in both states, the law of your state of residence applies when a substantial part of the work, 25 percent or more, is done there (Art. 13(1); the 25 percent figure is in Regulation (EC) No 987/2009, Art. 14(8)). An owner who lives and works in Spain and rarely visits Estonia falls under Spanish law, and Estonia should not issue an A1.

Estonia charges 33 percent social tax on a board fee (SMS § 2 lg 1 p 4). EMTA accepts only one proof that it is not due: "a certificate of social security coverage valid in such foreign country on Form A1", issued in your home country (EMTA). So ask the Spanish social security for an A1 and give it to the OÜ before the first fee. Without the A1 in the OÜ's file, EMTA can claim social tax on past fees. A salary for work done abroad by a non-resident bears no Estonian social tax (SMS § 3 p 7).

Spanish law puts in the self-employed scheme (RETA) a person who manages a capital company (sociedad de capital) as administrator, for pay, habitually and personally, and who controls it. Control always exists with half the capital. It is presumed, unless you prove otherwise, when relatives you live with hold half, when you hold one third, or when you hold one quarter and have management functions (LGSS art. 305.2.b). The e-Residency programme gives the example of a founder in Barcelona who "tendrá que darse de alta como autónomo" (will have to register as self-employed) (e-Residency).

Confirm with a local adviser: whether "sociedad de capital" covers a foreign company such as an OÜ, whether RETA applies when the OÜ pays you no fee but pays dividends, and how the Spanish institution issues the A1. If you also work in Estonia part of the time, ask the institutions for a formal decision on the applicable law. The Estonian rules are in our guide on contractors and cross-border workers.

How does Spain tax a dividend from my company?

Spain taxes the dividend as savings income in your annual personal income tax return (LIRPF art. 25.1.a, LIRPF art. 46.a). The state and regional scales together give these rates since 01.01.2025 (LIRPF art. 66.1, LIRPF art. 76):

You declare the full dividend you receive. A Spanish depositary withholds Spanish tax on a foreign dividend (Agencia Tributaria), but OÜ shares are normally held directly, so you pay the whole tax with the annual return.

Estonia withholds nothing from a dividend paid to you. The OÜ pays the corporate income tax of 22/78 on the distribution (TuMS § 50 lg 1), and EMTA confirms that "no further income tax withholding will apply" (EMTA). The treaty would allow Estonia to withhold up to 15 percent (Art. 10(2)(b) of the treaty), but Estonian law does not use it. One exception: the OÜ withholds a transitional 7 percent from a dividend that is exempt from 22/78 (for example a holding OÜ passing on dividends of its subsidiaries) when the underlying profit was taxed at 14/86 under the rules in force until 31.12.2024 (TuMS § 61 lg 68). Spain can credit that 7 percent. See how the distribution tax works, how to pay a dividend and the dividend tax calculator.

Confirm with a local adviser: the filing window and form of the annual return.

Can I credit the Estonian 22/78 company tax against my Spanish tax?

No, not as an individual. Spain credits "an amount equal to the income tax paid in Estonia" on your own income (Art. 23(1)(a)(i) of the treaty). A credit for "the underlying corporation tax" is given only under Spanish domestic law (Art. 23(1)(a)(iii)). Spanish personal income tax credits only tax paid abroad on the income itself (LIRPF art. 80.1), and the 22/78 is paid by the OÜ, not by you. The underlying credit and the exemption of Spanish law exist only in corporate tax, for a company shareholder (LIS art. 21, LIS art. 32). EMTA says the same: a natural person "in most cases will not be able to use income tax paid by an Estonian company" for relief at home (EMTA).

The treaty rates of 5 and 15 percent cap the Estonian tax on the shareholder (Art. 10(2)). Estonia levies no such tax, apart from the transitional 7 percent, which stays below the cap. So the rates give you nothing, and the 22/78 stays outside them (Art. 10(2), last sentence).

The result for a Spanish resident: 22/78 at company level in Estonia (about 28.2 percent of the net dividend), then 19 to 30 percent Spanish tax on the full dividend, with no credit.

Confirm with a local adviser whether a Spanish binding ruling (consulta vinculante) on the Estonian distribution tax exists. We found none.

What if my company lends me money or pays my private costs?

In Estonia, the OÜ pays 22/78 on a loan to a shareholder that is in substance a hidden profit distribution (TuMS § 50^2) and on expenses not related to the business (TuMS § 51). A benefit to a board member or employee is a fringe benefit taxed at company level (TuMS § 48), plus 33 percent social tax on the benefit and on the income tax on it (SMS § 2 lg 1 p 7, § 7 lg 1), unless an A1 applies. These are taxes on the OÜ, so Spain gives no credit for them.

In Spain, any benefit you receive as a shareholder is capital income (LIRPF art. 25.1.d), and a benefit for your work is income in kind (LIRPF art. 42.1). A loan between the OÜ and an owner who holds 25 percent is a related-party transaction, valued at market value (LIRPF art. 41, LIS art. 18).

The treaty follows the same split: a distribution that Estonian law taxes like income from shares is a dividend (Art. 10(3) of the treaty), a benefit for the board role falls under Art. 16, and pay under Art. 15. A benefit that fits none of these is taxable only in Spain (Art. 21(1)).

A loan from the OÜ to you needs a written agreement, a market interest rate, a repayment schedule and real repayment. Confirm with a local adviser: how Spain classifies a long, interest-free loan from the OÜ to its owner.

How is interest between Spain and my company taxed?

In practice, interest is taxed only in the lender's state of residence. The treaty text allows the source state to tax interest at up to 10 percent (Art. 11(2) of the treaty). The Ministry of Finance records that since 01.01.2016, through the most-favoured-nation clause of Protocol point VII, "the state of residence has the exclusive right to tax interest" (fin.ee). Domestic law gives the same result anyway. Estonia does not tax ordinary interest paid to non-residents (TuMS § 29 lg 7). Spain exempts interest paid to a resident of another EU state, unless it is obtained through a tax haven (TRLIRNR art. 14.1.c and 14.2).

Interest the OÜ receives is part of its profit, taxed only when distributed (TuMS § 50 lg 1). Interest you receive from your OÜ is Spanish capital income in the savings base. But the interest on the part of the loan above three times your share of the OÜ's equity goes into the general base, at progressive rates (LIRPF art. 25.2 and 46.a).

The safe rate is an arm's-length rate. The treaty limits apply only to an arm's-length amount (Art. 11(7)), and both states may adjust prices between related enterprises (Art. 9). Spain values related-party loans at market value (LIRPF art. 41, LIS art. 18), and so does Estonia (TuMS § 50 lg 4).

Confirm with a local adviser: whether the Spanish tax administration applies the most-favoured-nation result. With the EU exemption, it matters only in edge cases.

Does Spain withhold tax on royalties or service fees paid to my company?

Service fees: no Spanish tax, unless the OÜ has a Spanish permanent establishment. The treaty has no clause for technical fees, so fees for services are business profits (Art. 7(1) of the treaty). Spanish law taxes services used in Spain even without a permanent establishment (TRLIRNR art. 13.1.b), but the treaty prevails for an OÜ that is a treaty resident of Estonia.

Royalties: the treaty text caps the Spanish tax at 5 percent for equipment and 10 percent for other royalties (Art. 12(2)). The Ministry of Finance records that since 01.01.2016, through Protocol point VIII, "the state of residence has the exclusive right to tax royalties", and equipment is no longer a royalty (fin.ee). Spanish law taxes royalties paid to an EU resident at 19 percent (TRLIRNR art. 25.1.a), and exempts royalties between associated EU companies with a 25 percent holding kept for one year (TRLIRNR art. 14.1.m).

A Spanish-owned OÜ with no real activity in Estonia should expect the Spanish payer to withhold at the domestic rate. Protocol point VI denies the treaty relief to an Estonian company more than 50 percent held by non-residents of Estonia, unless it carries on substantive business operations in Estonia (see below).

If your OÜ pays royalties to Spain, it withholds 10 percent in Estonia, or the treaty rate if it submits the recipient's certificate of residence to EMTA with its return (TuMS § 29 lg 6 p 4, § 41 p 8, § 43 lg 1 p 2 and lg 2). After the most-favoured-nation change, that treaty rate is 0, unless the recipient is a Spanish company more than 50 percent held by non-residents of Spain with no substantive business operations in Spain (Protocol point VI(a)).

Confirm with a local adviser: whether Spain applies the most-favoured-nation result for royalties, and how the OÜ claims the treaty rate at source or a refund from the Agencia Tributaria. Whether a software or SaaS fee is a royalty at all is a question of classification.

What if my company owns a Spanish company?

Spain withholds 19 percent on dividends paid to a non-resident (TRLIRNR art. 25.1.f). The relief:

• 0 percent under the EU Parent-Subsidiary Directive, with a holding of at least 5 percent kept for one year (TRLIRNR art. 14.1.h);
• else 5 percent under the treaty, if the OÜ holds directly at least 25 percent of the capital (Art. 10(2)(a) of the treaty);
• else 15 percent (Art. 10(2)(b)).

The anti-abuse paragraph of the Spanish exemption targets parents held mainly by persons outside the EU and the EEA, so it does not apply by itself to an OÜ held by a Spanish resident. But the structure "Spanish owner, Estonian OÜ, Spanish subsidiary" is circular. Protocol point VI denies the treaty relief to an OÜ more than 50 percent held by non-residents of Estonia, unless it carries on "substantive business operations, other than the mere holding of shares or property" in Estonia. The principal purpose test of the MLI applies since 01.01.2023.

In Estonia, with at least 10 percent at receipt, the OÜ can pass the Spanish dividend on without Estonian income tax (TuMS § 50 lg 1^1 p 1), if the Spanish company could not deduct the dividend (TuMS § 50 lg 1^3). Declare the dividend gross on annex 7 of the TSD return for the month of receipt (EMTA). Below 10 percent, the OÜ pays 22/78 and deducts only the Spanish tax that was mandatory under law or the treaty (TuMS § 54 lg 5). You then pay Spanish tax on the dividend you receive, with no credit for the subsidiary's tax. If the OÜ only holds the Spanish company, the Spanish CFC rule can tax its dividend income to you (LIRPF art. 91.3.b).

Confirm with a local adviser: the form and procedure to claim the exemption or the treaty rate at source.

Who taxes the gain when I sell my company shares?

Spain alone, while you live there. The treaty gives a gain on shares that are not land-rich only to the seller's state of residence (Art. 13(4) of the treaty). Estonia taxes a non-resident's share gain only for a holding of at least 10 percent in a company whose assets were more than 50 percent Estonian real estate within the two years before the sale (TuMS § 29 lg 4 p 5; EMTA).

In Spain, the gain is the sale price minus the acquisition cost (LIRPF art. 35 and 37.1.b). It is savings income, taxed at 19 to 30 percent (LIRPF art. 46, art. 66, art. 76). For unlisted shares such as an OÜ, the sale price taken into account may not be lower than the higher of the net equity of the last closed balance sheet and the average profit capitalised, unless you prove an arm's-length price (LIRPF art. 37.1.b). Keep proof of the price (a valuation, an independent buyer).

Since 01.01.2023, the land-rich test also counts real estate that the company uses for its own business and real estate held indirectly (MLI Art. 9(4), which replaced Protocol point IX). An OÜ whose value comes mostly from its own premises can now be land-rich.

A payment from the OÜ itself on a buy-back, a capital reduction or a liquidation is different. Estonia can tax the part above your acquisition cost that was not taxed at the company (TuMS § 29 lg 5 with § 15 lg 2 and 3). Confirm with a local adviser: whether the treaty treats such a payment as a dividend (Art. 10) or a gain (Art. 13(4)).

How are rent and real estate gains taxed?

The state where the property is may tax the rent (Art. 6(1) of the treaty) and the gain on a sale (Art. 13(1); Protocol point V). The state of residence then gives a credit (Art. 23). Since 01.01.2023, the property state may also tax a gain on shares that drew more than 50 percent of their value, directly or indirectly, from its real estate at any time in the 365 days before the sale (MLI Art. 9(4)).

• You live in Spain and own property in Estonia. Estonia taxes a non-resident's rent and property gains at 22 percent (TuMS § 29 lg 4 p 1 and lg 6 p 2, § 4 lg 1). Spain taxes the same income and deducts the Estonian tax, up to the Spanish tax on it (Art. 23(1)(a)(i); LIRPF art. 80).
• You live in Estonia and own property in Spain. Spain taxes the rent and the gain at 19 percent for EU and EEA residents, and the buyer withholds 3 percent of the price from a non-resident seller (TRLIRNR art. 13.1.g and 13.1.i, art. 25.1 and 25.2). Even if an urban property is not let, Spain taxes a deemed income from it every year, on 31 December (TRLIRNR art. 13.1.h and 27.1.c). Estonia credits the Spanish tax (Art. 23(2)(a)).
• The OÜ owns the property. The rent and the gain are the OÜ's profit, still taxable where the property is (Art. 6(5), Art. 13(1)). Estonia taxes the OÜ only when it distributes (TuMS § 50 lg 1).

Confirm with a local adviser: the Spanish non-resident returns, the base of the deemed income, and the refund of the buyer's 3 percent withholding.

Can the Spanish CFC rule tax the profit my company keeps?

Yes, it can. A Spanish resident who, alone or with relatives, holds at least 50 percent of the OÜ includes its income in his general base when the OÜ's tax on that income is below 75 percent of Spanish corporate tax (LIRPF art. 91.1). The OÜ pays 0 percent until it distributes (TuMS § 50 lg 1), so its retained profit meets that test.

What is taxed to you:

• the OÜ's total income, if it lacks the staff and means to earn it, unless you prove valid economic reasons for its set-up (LIRPF art. 91.2);
• otherwise only passive income: real estate, financial assets and lending, IP and licences, and services to related Spanish residents that they can deduct (LIRPF art. 91.3). Passive income below 15 percent of total income is generally not taxed (LIRPF art. 91.4).

The rule does not apply at all if the OÜ is resident in the EU and you prove that it carries on economic activities (LIRPF art. 91.14). So a real trading or service OÜ with its own means is outside the rule. A passive holding, an IP company, or an OÜ that invoices your own work with no staff or premises is exposed. The income is taxed at progressive rates in the year that includes the OÜ's year end, and you file the OÜ's data with your return (LIRPF art. 91.5, 91.6 and 91.11).

The treaty does not stop this. Art. 10(5) of the treaty only stops Spain from taxing the Estonian company itself on its undistributed profit, and the MLI saving clause does not apply.

When the OÜ later pays out profit already taxed to you, Spain does not tax it again (LIRPF art. 91.8). Spain lets you deduct tax paid abroad by reason of that distribution, up to the Spanish tax on the income taxed earlier (LIRPF art. 91.9). Keep a yearly schedule of the income taxed to you and the reserves it came from. Estonia gives no relief for the Spanish CFC tax against the OÜ's distribution tax.

Confirm with a local adviser: what evidence of "economic activities" the Agencia Tributaria accepts for a one-person OÜ, and whether the Estonian 22/78 counts as a tax on the distribution under art. 91.9 (ideally through a binding ruling of the Dirección General de Tributos). The Estonian view of CFC rules is in our guide on founder residency, permanent establishment and CFC rules.

Do my spouse's and relatives' shares count for the Spanish CFC rule?

Yes. The 50 percent control test counts your shares together with those of related companies and of other Spanish taxpayers related to you by kinship, spouse included, up to the second degree (LIRPF art. 91.1.a). The second degree covers parents, children, grandparents, grandchildren, siblings, and the same relatives of your spouse. So if your spouse holds 30 percent and you hold 25 percent, the test is met for both of you, and each of you is taxed on your own share of the results (LIRPF art. 91.5). The test is made at the OÜ's year end, so a transfer to a relative does not escape it.

For a Spanish company that holds OÜ shares, the test counts related persons under the corporate tax law, which reach relatives of shareholders and directors up to the third degree (LIS art. 100.1.a and 18.2).

Control alone does not trigger the tax: the low-tax test, the kind of income and the EU exception still apply (see the section above). The treaty has no rule on this.

Confirm with a local adviser: whether the Agencia Tributaria also counts relatives who are not Spanish taxpayers, and how shares under a community property regime are split between spouses.

Does Spain charge exit tax if I move to Estonia?

Yes, if you were a Spanish taxpayer for at least 10 of the last 15 years and your shares are worth more than 4 million euros in total, or more than 1 million euros in a company in which you hold over 25 percent. The unrealised gain is then taxed in your last Spanish return (LIRPF art. 95 bis 1 and 2). An unlisted OÜ is valued at the higher of its net equity and its average profit of the last three years capitalised at 20 percent, unless you prove another market value (LIRPF art. 95 bis 3.b). An OÜ with large retained profit can cross the thresholds even if it cost little to set up.

For a move to another EU state such as Estonia, you can opt to pay only if, within ten years, you sell the shares, leave the EU and the EEA, or fail to report each year. If you return to Spain without any of these events, the tax lapses (LIRPF art. 95 bis 6). A separate deferral, on request and with security, exists for a temporary move (LIRPF art. 95 bis 4).

After the move, a later sale of shares that are not land-rich is taxable only in Estonia (Art. 13(4) of the treaty). Estonia has no exit tax for individuals and taxes a resident's gain only on disposal (TuMS § 15 lg 1).

Confirm with a local adviser: under the EU option, a sale within ten years is exactly what makes the Spanish exit tax payable; ask whether this fits Art. 13(4). Ask also how to report the option, and whether contributing the shares to a holding counts as a sale.

What changes when I move to Spain with an existing company?

From the year you become resident, Spain taxes your worldwide income for the whole calendar year (LIRPF art. 9 and art. 12). Your shares keep their historic cost: we found no rule that resets it to market value on arrival, so a gain built up before the move is taxed in Spain on a later sale (LIRPF art. 35).

From the first year, the Spanish CFC rule can apply to the OÜ (LIRPF art. 91). If you run the OÜ from Spain, it can become a Spanish resident company (LIS art. 8.1), and your board work in Spain can create a permanent establishment. Filing duties start: modelo 720 by 31 March of the next year if your OÜ shares or the OÜ accounts you can operate exceed 50,000 euros (RD 1065/2007 art. 42 bis and 42 ter), and a wealth tax return if tax is payable or your assets exceed 2 million euros (Ley 19/1991 art. 37).

Before arrival, consider paying out or valuing the OÜ's retained profit. A dividend paid in a calendar year before the year in which you become resident in Spain is not Spanish income. Because Spain has no split year, a dividend paid earlier in the year of arrival can still be taxed in Spain, unless the treaty tie-breaker makes you resident only in Estonia when it is paid (Art. 4(2) of the treaty). Confirm the timing with a local adviser. Newcomers can also opt for the Beckham regime (see the next section). Leaving Estonian residence has no exit tax for an individual.

Confirm with a local adviser: whether any market-value step-up is available in any form. We found none in the law.

Can I use the Beckham regime as director of my Estonian company?

Possibly. The impatriate regime (régimen de impatriados) is open to a person not resident in Spain in the previous five years who moves to Spain, among other routes, as a consequence of becoming administrator of an entity (LIRPF art. 93.1). The law does not require the entity to be Spanish. If it is a passive holding company (entidad patrimonial), you may not hold 25 percent or more (RIRPF art. 119.2; LIS art. 18.2). You opt within six months of the start of the activity (RIRPF art. 116).

Under the regime, for the year of the move and the five following years, you pay tax under the non-resident rules (LIRPF art. 93; RIRPF art. 115):

• all your work income counts as Spanish and is taxed at 24 percent up to 600,000 euros and 47 percent above;
• Spanish-source savings income is taxed at 19 to 30 percent;
• dividends of a company resident in Estonia are not taxed, because the non-resident rules tax only dividends of Spanish companies (TRLIRNR art. 13.1.f);
• wealth tax applies only to your Spanish assets.

The traps:

• If the OÜ is managed from Spain, it is a Spanish resident company (LIS art. 8.1), its dividends become Spanish-source, and it may owe Spanish corporate tax.
• Your board work in Spain can give the OÜ a Spanish permanent establishment, and your own income must not come through one.
• Your board fee is taxed in Spain at 24 percent and in Estonia under TuMS § 29 lg 2. Spain credits the Estonian tax only up to 30 percent of the Spanish tax on all your foreign work income that year (RIRPF art. 114.2).
• The treaty excludes from "resident" a person taxed "in respect only of income from sources in that State" (Art. 4(1) of the treaty). Spain gives a Beckham taxpayer a special residence certificate, and a certificate for treaty purposes only where the minister provides for it on reciprocity (RIRPF art. 120). Estonia may then refuse you treaty benefits.

Confirm with a local adviser: whether you qualify if you already live in Spain when you become administrator of your own OÜ (ideally through a binding ruling), and whether a trading OÜ counts as an entidad patrimonial. Social security can still require Spanish registration.

Which country taxes my pension?

A pension for past employment is taxed only in the state where you live (Art. 18 of the treaty). The treaty has no separate rule for social security pensions, so a state old-age pension earned through work follows the same rule. A pension paid by a state or a local authority for government service is taxable only in the paying state (Art. 19(2)(a)), unless you are a resident and a national of the other state (Art. 19(2)(b)). Other income not covered elsewhere is taxed in the state of residence (Art. 21(1)).

• You live in Spain and receive an Estonian pension. Spain taxes it, and Estonia must not. The Estonian payer needs a certificate of Spanish residence to stop withholding (EMTA).
• You live in Estonia and receive a Spanish pension. Estonia taxes it at 22 percent, with the higher basic exemption at pensionable age (TuMS § 12 lg 1 p 7, § 19 lg 2, § 23^5 lg 1). Without the treaty, Spain would tax a non-resident's pension at 8, 30 and 40 percent (TRLIRNR art. 25.1.b). A certificate of Estonian residence removes that tax, except for a Spanish government-service pension.

Confirm with a local adviser: whether a private pension plan counts as a pension for past employment, and which certificate and form the Spanish payer needs to stop withholding or refund past withholding. Check the government-service rule for each spouse, because it depends on nationality.

What must I report in Spain about my company, and how do I value it for modelo 720?

You file the foreign assets return (modelo 720) between 1 January and 31 March when a block of assets exceeds 50,000 euros at 31 December. Two blocks matter: your OÜ shares, and the OÜ's bank accounts on which you are an authorised signatory or beneficial owner. In later years you file again only if a block rises by more than 20,000 euros (RD 1065/2007 art. 42 bis and 42 ter). Crypto held abroad goes on a separate return, modelo 721 (LGT additional provision 18).

The value: the regulation asks only for the value of the shares, and the modelo 720 design asks for the balance at 31 December (Orden HAP/72/2013, annex). Neither sets a method for unlisted shares. A common reading in practice uses the wealth tax value: for an unaudited OÜ, the highest of the nominal value, the net equity of the last approved balance sheet, and the average profit of the last three years capitalised at 20 percent (Ley 19/1991 art. 16). On that reading, a profitable OÜ is reported at five times its average profit if that is more than its equity.

The penalties: the EU Court found the old special penalties of the modelo 720 contrary to EU law (case C-788/19, judgment of 27.01.2022), and Ley 5/2022 removed them (Ley 5/2022). The general penalties now apply, on our reading of the law (LGT art. 198 and 199):

• late filing: 20 euros per item of data, minimum 300 and maximum 20,000 euros, halved if you file late without a request from the tax office;
• incomplete or wrong data: 200 euros per non-monetary item, or up to 2 percent of the amounts for monetary items, minimum 500 euros.

If the Spanish CFC rule applies, you also file the OÜ's data with your return (LIRPF art. 91.11). A wealth tax return is due if tax is payable or your assets exceed 2 million euros (Ley 19/1991 art. 37). Under the treaty, only your state of residence taxes your shares as capital (Art. 22(4) of the treaty).

Spain learns about the OÜ anyway. The two states exchange the information needed to apply the treaty or their tax laws (Art. 26(1) of the treaty), including information that is submitted automatically to the tax authorities under domestic law (Protocol point XI(2)), and banks report the controlling persons of a passive company under the automatic exchange between tax authorities.

Confirm with a local adviser: which value the Agencia Tributaria expects for unlisted foreign shares, which penalty amounts it applies (some advisers quote higher figures that we did not find in the law), and the modelo 721 thresholds. Ask for the OÜ's 31 December balances early.

How do I prove residence to get the treaty rates?

Your OÜ compiles a "certificate of residence and tax liability" in e-MTA, or applies through an online form, and gets it within five working days (EMTA). A Spanish payer applies the treaty rate only if the OÜ proves it is resident in Estonia. Where Spain withheld too much, the OÜ claims the refund in Spain on the Spanish non-resident return forms (Agencia Tributaria, G305).

For your own Estonian income where the treaty removes Estonian tax, such as an Estonian pension, Estonia needs a certificate of residence confirmed by the Spanish tax authority (EMTA). The Agencia Tributaria issues it under procedure G305 (Agencia Tributaria; RD 1065/2007 art. 70 to 76). A Beckham taxpayer gets a certificate for treaty purposes only in limited cases (RIRPF art. 120).

A certificate is not always enough. An OÜ owned by a Spanish resident is more than 50 percent held by a non-resident of Estonia, so for Spanish dividends, interest, royalties and gains it also needs real business operations in Estonia (Protocol point VI(a)). If Spain treats the OÜ as managed from Spain, a certificate does not settle that either.

Confirm with a local adviser: which certificate, how recent, and which form a Spanish payer needs to apply the treaty rate at source.

Can Spain deny my company treaty benefits as abusive?

Yes, on several grounds:

• Protocol point VI is a mechanical test. An OÜ more than 50 percent held by non-residents of Estonia gets no treaty relief for Spanish dividends, interest, royalties and gains, unless it carries on substantive business operations in Estonia, "other than the mere holding of shares or property" (Protocol point VI(a)). A one-asset holding OÜ owned by a Spanish resident fails it. Only the two tax authorities can restore the relief, if the company rests on sound business reasons (Protocol point VI(b)).
• Since 01.01.2023, the principal purpose test of the MLI denies a benefit if obtaining it was one of the principal purposes of an arrangement (MLI Art. 7(1)). A holding set up shortly before a dividend or a sale, with no staff or decisions in Estonia, is the typical target.
• Spain has general anti-abuse rules for artificial arrangements and for simulation (LGT art. 15 and 16).
• An OÜ run from Spain can be treated as a Spanish company (LIS art. 8.1), and then gets no treaty benefits without a mutual agreement (Art. 4(3) of the treaty).

Protocol point VI does not apply to board fees (Art. 16) or business profits (Art. 7). Document the business reasons and the substance of the OÜ (contracts, staff or service providers, decisions in Estonia) before you claim Spanish treaty relief. The Estonian view of substance is in our guide on founder residency, permanent establishment and CFC rules.

What can I do if both countries tax the same income?

You can start a mutual agreement procedure. You present the case to the tax authority of your state of residence within three years from the first notice of the action that taxes you against the treaty, whatever domestic remedies you use (Art. 25(1) of the treaty). An agreement is carried out whatever the domestic time limits (Art. 25(2)). The treaty has no arbitration clause, and the MLI adds none.

In Spain, the request goes in writing to the Dirección General de Tributos, or to the Agencia Tributaria for cases on permanent establishments and related companies. It must name the parties, the foreign authority, the treaty article you say is misapplied and your reading of it. When the request is admitted, Spain informs the body that hears any parallel appeal (RD 1794/2008 art. 2, 4, 7 to 9). As both states are in the EU, the procedure of Council Directive (EU) 2017/1852 is also available, also within three years, with the request sent to all authorities at once (RD 1794/2008 art. 37 to 39).

In Estonia, you file with EMTA. There is no form, but the request must name you, the other country, the facts and the years. EMTA recommends a protective request while domestic appeals run, to stay within both time limits (EMTA).

Spain can assess tax for four years (LGT art. 66). File as soon as an assessment or proposal against the treaty is notified. Social security disputes are outside the treaty and go through Regulation 883/2004. Confirm with a local adviser: whether to pursue the Spanish appeal, the mutual agreement procedure or both, and whether to ask for suspension of collection.

How does the MLI change this treaty?

The treaty is a Covered Tax Agreement of both states. The MLI entered into force for Estonia on 01.05.2021 and for Spain on 01.01.2022, and it has effect for this treaty from 01.01.2023: for withholding taxes on events from that date, and for other taxes for periods that begin on or after it. Three changes apply:

• the new preamble against non-taxation and treaty shopping (MLI Art. 6(1));
• the principal purpose test (MLI Art. 7(1)), which applies next to Protocol point VI and supersedes the treaty where they conflict;
• the 365-day land-rich share rule (MLI Art. 9(4)), which replaces the share part of Art. 13(1) of the treaty and Protocol point IX.

Nothing else changes. The tie-breaker for companies (Art. 4(3) and Protocol point II), the permanent establishment article (Art. 5), the dividend article, the relief article and the mutual agreement article stay as they are. The Ministry of Finance publishes a synthesised text that shows the result (fin.ee). The synthesised text is not law: the treaty and the MLI are.

Separately, the most-favoured-nation clauses of the 2003 Protocol changed the result for interest and royalties from 01.01.2016, without a new protocol (fin.ee).

General information, not advice for your situation. The law as in force on 01.10.2026.