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: 11
Membership: 15
Agenda Duration: 8m
AI Summaries: 11/11 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The Riigikogu held the first reading debate on Draft Act 718 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 tax fraud, along with the protocol attached thereto. Minister of Finance Jürgen Ligi introduced the draft, explaining that the agreement is based on the OECD Model Convention and its primary objective is to foster international investments and curb tax avoidance. The Minister highlighted the key limitations on taxation, such as the maximum rates for income tax withheld at source on dividends (10% for natural persons), interest (10% for natural persons), and royalties (5%). Interest paid to companies is exempt from withholding tax.
Riina Sikkut presented the outcomes of the discussion on behalf of the Finance Committee, confirming the committee's support for proceeding with the draft legislation. During the debate, a comparison was drawn with the recently processed agreement with Oman. Both the Minister and the committee representative clarified that while the OECD Model Convention serves as the foundation, specific adjustments were made during negotiations for both treaties, reflecting the tax systems and interests of the partner states. The Committee proposed concluding the first reading.
Decisions Made 2
The first reading of Bill 718 was concluded.
The deadline for submitting amendments was set for October 27th at 17:15.
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.
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 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.
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 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.
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.
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.