First Reading of the Draft Act on the Ratification of the Agreement between the Republic of Estonia and the Principality of Liechtenstein for the Avoidance of Double Taxation with respect to Taxes on Income and Capital and the Prevention of Tax Evasion and Tax Fraud, and the Protocol thereto (718 SE)
Session: 15th Riigikogu, 6th Session, Plenary Sitting
Date: 2025-10-13 18:16
Participating Politicians:
Total Speeches: 19
Membership: 15
Agenda Duration: 8m
AI Summaries: 19/19 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The agenda item was the first reading of Draft Act 718, initiated by the Government of the Republic, concerning the ratification of the agreement between the Republic of Estonia and the Principality of Liechtenstein for the avoidance of double taxation with respect to taxes on income and capital and the prevention of tax evasion and fraud. Minister of Finance Jürgen Ligi introduced the draft act, explaining that the purpose of the agreements is to promote cross-border investments, prevent discriminatory taxation, and curb tax avoidance. The agreement is based on the OECD Model Convention and is the 64th valid tax treaty for Estonia (the 65th, including Oman). The Minister highlighted the most important provisions, such as the limited right to tax dividend income (up to 10% for natural persons), the exemption of corporate interest from withholding tax, and a maximum tax rate of 5% for royalties. To eliminate double taxation, Estonia uses the exemption or credit method, and the agreement establishes a comprehensive obligation for the exchange of information between tax authorities.
Riina Sikkut, representing the Finance Committee, presented the committee's discussion, which took place on October 7, 2025. Both in the committee and in the plenary session, Peeter Ernits raised the question of the differences between the Liechtenstein agreement and the recently processed Oman agreement. It was explained that although the OECD Model Convention serves as the basis, adjustments were made during negotiations concerning the tax rates for passive income and specific exemptions, ensuring they correspond to the tax systems of the partner countries. The Finance Committee made a consensus proposal to conclude the first reading.
Decisions Made 2
The first reading of Bill 718 concluded.
The deadline for submitting amendments was set for October 27, 2025, at 17:15.
Most Active Speaker
Peeter Ernits was the most active questioner, posing comparative questions to both Minister of Finance Jürgen Ligi and the commission's representative Riina Sikut regarding the differences in the wording and substance of the double taxation avoidance treaties with Liechtenstein and Oman.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar introduced the first item on the agenda of the sitting, which was the first reading of Draft Act 718 on the ratification of the agreement between the Republic of Estonia and the Principality of Liechtenstein for the avoidance of double taxation, and invited Minister of Finance Jürgen Ligi to the Riigikogu podium to present the topic.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar introduced to the Riigikogu Bill 718, initiated by the Government of the Republic, which concerns the ratification of the agreement between the Republic of Estonia and the Principality of Liechtenstein on the avoidance of double taxation with respect to taxes on income and on capital and the prevention of fiscal evasion. He then invited Minister of Finance Jürgen Ligi to the podium for its first reading.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi presented to the Riigikogu the Agreement on the Avoidance of Double Taxation signed between Estonia and Liechtenstein on July 10 this year. The agreement aims to promote investments and prevent tax evasion by simultaneously limiting the taxing rights of the source state (for example, setting an upper limit on withholding tax of 10% for dividends and interest, and 5% for royalties) and establishing a comprehensive obligation for the exchange of information between tax authorities. He requested support for the agreement.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi presented to the Riigikogu (Estonian Parliament) the agreement between Estonia and Liechtenstein for the avoidance of double taxation. The purpose of the agreement is to promote investments and prevent tax evasion by limiting the taxation rights of the states—for example, by setting the maximum withholding income tax rate at 10% for dividends and interest, and 5% for royalties—and by establishing a comprehensive obligation for information exchange between tax authorities. He requested support for the agreement.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar offered thanks, announced the beginning of the question period, and immediately gave the floor to Peeter Ernits so that he could pose his question.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Ernits requested that the minister clarify, in a manner understandable to the general public, the substantive and formulation differences between the two similar draft bills for the ratification of international tax treaties (referring specifically to the Oman agreement and the one currently under discussion). He highlighted that the title of one bill mentioned the prevention of tax avoidance, while the other did not.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Ernits is demanding an explanation as to why the wording of the current draft bill (specifically, the mention of double taxation) differs from the Oman agreement discussed last week. He also requests that these terminological discrepancies be clarified for the lay public.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi admitted that while differences in nomenclature (such as those stemming from Liechtenstein practices) might cause confusion, the content points being compared seemed identical to him, based on his recollection. He promised, however, to definitely verify the answer and officially confirm it at the next reading.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi confirmed that, to the best of his recollection, the substance of the compared documents was identical, but the difference in titles apparently stemmed from Liechtenstein's specific titling conventions. He promised that this matter would be verified and that the rapporteur would announce the results at the next reading.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked the minister, noting that he had no further questions for him, and subsequently asked Riina Sikkut, a member of the Finance Committee, to come to the Riigikogu podium to present the discussion that had taken place in the committee.
Riina Sikkut
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Riina Sikkut provided an overview of the Finance Committee's consensus decision to include the draft agreements on the avoidance of double taxation with Liechtenstein and Oman on the plenary agenda. She noted that these drafts, although based on the OECD Model Convention, contain minor variations stemming from the partner countries' tax systems regarding the rates and exemptions for passive income taxation. Sikkut confirmed that both agreements are suitable for Estonia and proposed concluding the first reading.
Riina Sikkut
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Riina Sikkut provides an overview of the Finance Committee's discussion concerning the preparation of the draft agreements on the avoidance of double taxation with Oman and Liechtenstein for the first reading, noting that although the agreements are based on the OECD Model Convention and align with Estonia's interests, they contain minor differences regarding the taxation of passive income and specific exemptions. The Committee concluded that both agreements are suitable for Estonia and decided unanimously to place the draft on the plenary agenda and propose concluding the first reading.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked the presenter and then gave the floor to Peeter Ernits so he could ask at least one question.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Ernits continues the debate on the 63 previously ratified treaties, demanding clarification on what exactly defines a "model agreement" and which specific models (such as the Liechtenstein, Oman, or France type) are contained within this collection of 63 agreements.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Ernits continues the previous topic, focusing on the 63 consecutively ratified treaties, and raises the question of what exactly constitutes a standard agreement and what specific model (such as the Liechtenstein, Oman, or France type) these treaties represent.
Riina Sikkut
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Riina Sikkut explains that the agreement between the two countries was based on the OECD Model Convention, which was amended during negotiations to reflect the specific differences and interests of the countries' tax systems. This agreement was signed in Rome on July 10, 2025, and has now entered the procedural stage.
Riina Sikkut
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Riina Sikkut explained that Estonia used the OECD Model Convention as the basis for bilateral tax treaty negotiations. This model was adapted according to the specific interests and tax systems of the respective countries, and the resulting modified agreement was signed in Rome on July 10, 2025, and has now entered the legislative process.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar closed the debate, concluded the first reading of Bill 718 based on the motion of the lead committee, and announced that the deadline for submitting amendments is 5:15 p.m. on October 27 of the current year.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar announced that, following the thanking of the rapporteur and the closure of the debate, the first reading of Draft Bill 718 was concluded upon the proposal of the lead committee, and the deadline for submitting amendments was set for 17:15 on October 27 of the current year.