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At today’s sitting, the Riigikogu approved 11 Acts, including the Acts on amendments to the Salaries of Higher State Servants Act, the Permanently Inhabited Small Islands Act, the Persons Repressed by Occupying Powers Act, the Estonian Health Insurance Fund Act, the Health Insurance Act, the Family Benefits Act and the State Funeral Benefits Act.

Six Bills passed the second reading and three Bills passed the first reading in the Riigikogu.

The Riigikogu passed 11 Acts:

The Act on Amendments to the Salaries of Higher State Servants Act and Other Associated Acts (513 SE), initiated by the Government, organises the salary system of higher state servants and prosecutors. The salary of higher state officials depends on the consumer price index and the increase in receipt of the pension insurance part of social tax. The salary of prosecutors depends on the income of the Prosecutor General.

The coefficient for the salary of the Prosecutor General is 0.85. For example, the Vice-Presidents of the Riigikogu, the Chancellor of Justice, the Auditor General and the ministers have the same salary. The coefficient for the salary of the President of the Republic, the President of the Riigikogu, the Prime Minister and the Chief Justice of the Supreme Court is one, that is, 5200 euro.

The salary of prosecutors depends on the amount of the salary of the Prosecutor General. By 1 April of each calendar year, the highest salary rate is indexed by an index the value of which depends to the extent of 20 per cent of the increase of the consumer price index and to the extent of 80 per cent of the annual increase in receipt of the pension insurance part of social tax. The Prosecutor General, the Chancellor of Justice, the State Secretary and the Auditor General are paid 20 percent of their salary on a monthly basis for representation expenses.

After the indexation, the highest salary rate calculated as a result of the indexation in the previous year will be deemed to be the highest salary rate for higher state servants in the following year. The first indexation will take place on 1 April next year, but in the case of the members of the Riigikogu, the President and the ministers, the change in the salary will take place during the following term of the Riigikogu.

The Act enters into force on 1 January 2018.

During the debate, Artur Talvik from the Free Party Faction, Martin Helme from the Estonian Conservative People’s Party Faction and Jürgen Ligi from the Reform Party Faction took the floor. Talvik and Helme said that their factions would vote against the passage of the Act.

55 members of the Riigikogu voted in favour of the Act and 28 were against.

The Act on Amendments to the Permanently Inhabited Small Islands Act, the Traffic Act and the Earth’s Crust Act (493 SE), initiated by the Government, amends the bases for compiling the list of the permanently inhabited small islands. An island will belong to the list if its area is less than 100 square kilometres and if at least five persons resided there during the previous calendar year according to the data of the population register. Under the new rules provided for in the Act, the islands of Aegna, Naissaar and Väike-Pakri will be included in the list of small islands next year.

In the future, the Government of the Republic will establish the list of the permanently inhabited small islands by a regulation. At present, the list of the permanently inhabited small islands can be changed only by an Act. The new procedure will simplify the making of changes to the list, and the list will be reviewed regularly.

The state will support financially the local authorities on whose territory an island belonging to the list of the permanently inhabited small islands is located, in order to provide public services to the inhabitants of the island.

The Act also allows people to be carried on the open load bed of a truck on small islands. The carriage of passengers in the cargo space or on the open load bed of a truck is a widespread practice on small islands, and special requirements for that were lacking in the legal order so far. In the future, passengers may be carried in the cargo space or on the open load bed of a truck on the condition that a suitable and safe place is ensured there for passengers. The driving speed must not exceed 40 km/h.

77 members of the Riigikogu voted in favour of the Act, five were against, and there was one abstention.

The Act on Amendments to the Administrative Procedure Act and Other Acts (497 SE), initiated by the Government, updates the regulation of electronic operations in administrative proceedings which may be specified or restricted by special Acts.

The most important amendment is that sending documents electronically are made equal to delivery by post. It is possible to deliver documents electronically via the Estonian information gateway (@eesti.ee), special information systems (e.g. e-Tax Board) or the e-mail address of the party to the proceedings.

As a general rule, a document is deemed to be delivered electronically when the information system has registered the acceptance thereof or the addressee has confirmed receipt. The general rules for electronic issue of legal acts are provided for. Among other things, the part concerning the use of digital signature and digital seal is also updated.

During the second reading, two motions to amend had been submitted, one of which amended the provision regulating the publication of documents in a newspaper by adding the condition that it was possible to publish a document in a newspaper also when the e-mail address of a natural person was known but he or she did not confirm receipt of a document forwarded to the e-mail address.

83 members of the Riigikogu voted in favour of the Act.

Under the Act on Amendments to the Tourism Act, the Law of Obligations Act and the Consumer Protection Act (492 SE), initiated by the Government, if a person procures at least two travel services from one travel agent at the same time, this is deemed to be a package. Until now, a package meant mainly a comprehensive trip solution created by a travel undertaking and offered at an inclusive price.

Under the Act, the same requirements apply also for example to companies engaging in accommodation, car rental and the carriage of passengers who offer combined travel services to travellers. If, during a booking process in a company engaging in the carriage of passengers, a traveller can also choose, for example, a guided tour, besides transport services, this is also a package and the travel agent is responsible for the whole contract.

An organiser of a package must provide security covering its obligations for the refund of the payments made by or on behalf of travellers and for the travellers’ repatriation in the event of the organiser’s insolvency.

The amendments are connected with the transposition of a European Union directive.

78 members of the Riigikogu voted in favour of the Act, four were against, and there was one abstention.

The Act on Amendments to the Competition Act (508 SE), initiated by the Government, provides for the obligation of the Ministry of Finance to disclose state aid awarded exceeding 500 000 euro in the European Commission Transparency Award Module. Information concerning such aid has to be disclosed within six months as of the award of aid.

It is the European Commission recommendation to Member States which aims to allow citizens and companies to access information about state aid awarded in large amounts, which entered into force on 1 July 2016. Since 1 July 2016, such aid has been awarded for 76 times in Estonia.

The Act changes the procedure for submitting state aid reports to the European Commission and provides for the obligation of the Ministry of Finance to submit the reports via the web application of the European Commission. The amendments bring the regulation into conformity with the current procedure.

83 members of the Riigikogu voted in favour of the passage of the Act.

The Act on Amendments to the Persons Repressed by Occupying Powers Act and the Social Welfare Act (518 SE), initiated by the Government, provides for raising the repressed person’s allowance from 192 euro to 230 euro per year. The Act also provides for a 230-euro social benefit for persons who were sent by force from Estonia to the nuclear disaster area to liquidate the consequences of the disaster.

Repressed person’s allowance is paid on the basis of an application submitted earlier, and only persons who have not applied for repressed person’s allowance earlier have to submit a new application to the Social Insurance Board. Also persons who wish to apply for allowance for persons who were sent by force from Estonia to the nuclear disaster area to liquidate the consequences of the disaster.

Dmitri Dmitrijev from the Centre Party Faction and Tarmo Kruusimäe from the Pro Patria and Res Publica Union Faction took the floor during the debate.

73 members of the Riigikogu voted in favour of the passage of the Act.

The Act on Amendments to the Estonian Health Insurance Fund Act and Amendments to Other Associated Acts (512 SE), initiated by the Government, establishes an expansion of the revenue base of the Estonian Health Insurance Fund by stages, and the transition of the expenditure from the state budget to the Estonian Health Insurance Fund in connection with that.

Under the regulation that was in force before, the revenue base of health insurance was constituted from the share of the social tax transferred into the state health insurance funds which accounted for 13 per cent of the payments for working person. Also, according to the regulation that was in force before, the funding of the services transferred under the Act was a state budget obligation. The services are funded by either the Ministry of Social Affairs or the Health Board.

The Act establishes an expansion of the revenue base of the Estonian Health Insurance Fund by stages, and the transition of the expenditure from the state budget to the Estonian Health Insurance Fund in connection with that. On 23 April, within the framework of the negotiations on the state budget strategy for 2018–2021, the Government approved the expansion of the revenue base of the Estonian Health Insurance Fund and decided to contribute 7 per cent to its budget in 2018, 10 per cent in 2019, 11 per cent in 2020, 12 per cent in 2021 and 13 per cent in 2022 per pension of a non-working old-age pensioner.

During the debate, Marika Tuus-Laul from the Centre Party Faction, Heljo Pikhof from the Social Democratic Party Faction, Monika Haukanõmm from the Free Party Faction, Maris Lauri from the Reform Party Faction and Mart Helme from the Estonian Conservative People’s Party Faction took the floor.

52 members of the Riigikogu voted in favour of the passage of the Act and 34 voted against.

The Act on Amendments to the Health Insurance Act and Amendments to Other Associated Acts (514 SE), initiated by the Government, provides that the costs on medicinal products incurred by people with an increased treatment need are compensated to them to a greater extent, to improve the availability of medicinal products for people who incur high costs on medicinal products and to reduce their financial burden.

The Health Insurance Fund compensates for 50 per cent of 100 to 300 euro, and 90 per cent of the amount exceeding 300 euro, spent on medicinal products subject to prescription within a year. The compensation is calculated in the pharmacy, and the amount to be paid by the patient decreases automatically and no application needs to be submitted.

The Act enters into force on 1 January 2018.

During the debate, Marika Tuus-Laul from the Centre Party Faction, Maris Lauri from the Reform Party Faction and Monika Haukanõmm from the Free Party Faction took the floor.

59 members of the Riigikogu voted in favour of the passage of the Act, 20 voted against, and there were two abstentions.

The Act on Amendments to the Family Benefits Act and Amendments to Other Associated Acts (517 SE), initiated by the Government, improves the flexibility of the parental benefit scheme, creates better opportunities for reconciling work and family life, and facilitates a more even distribution of the care burden between the parents.

Paternity leave is extended from the current ten working days to 30 days, and a month that is intended for fathers is added to the 18-month parental benefit period.

Starting from March, the benefit will not be reduced if the income from work does not exceed a half of the maximum limit of the parental benefit, that is, 1544 euro per month in 2018. If a person earns more, a benefit to the extent of the parental benefit will always be ensured, which will be 470 euro next year.

Also, parents will be able to decide for themselves if and how they wish to suspend and resume receiving the parental benefit in the first three years of their child’s life.

The parental benefit will be calculated according to the 12 months preceding the pregnancy.

The Act also establishes the allowance for triplets or higher order multiples, which is 1000 euro per month for one parent until the children attain the age of 18 months. The purpose of the allowance is to enable parents of multiples to hire an assistant to take care of the children.

Rainer Vakra from the Social Democratic Party Faction took the floor during the debate.

62 members of the Riigikogu voted in favour of the passage of the Act and there was one abstention.

The Act on Amendments to the Social Welfare Act and the Repeal of the State Funeral Benefits Act and Amendments to Other Associated Acts (490 SE), initiated by the Government, makes the regulation concerning the subsistence benefit more flexible and facilitates the employment of persons who receive the subsistence benefit. The amendments eliminate the needs-based family benefit.

To facilitate re-employment, a two-month transitional period is provided for, in which the subsistence benefit is paid to the person in the former amount. In the following four months, a half of the remuneration is excluded from the incomes of the person when calculating the subsistence benefit. Such a regulation will increase the total income of a person who re-enters employment.

In the future, remuneration earned by students who are minors will not be included in the income of the household when calculating a subsistence benefit. This creates more flexible conditions for students to work for example during school holidays.

Under the Act, the funeral benefit is restored and, to pay it, funds are assigned to local governments through the support fund. The funds are allocated based on the principle that, on the average, 250 euro could be paid as a benefit to the organiser of the funeral in the event of a death. Local governments have the right to pay the benefit on the basis of needs, that is, to decide to whom and in what amount the funeral benefit is paid. Local governments can also use the funds to cover the costs of the funeral of the deceased who have no immediate family and whose funeral is organised by the local government.

During the debate, Marika Tuus-Laul from the Centre Party Faction, Hanno Pevkur from the Reform Party Faction and Tarmo Kruusimäe from the Pro Patria and Res Publica Union Faction took the floor.

57 members of the Riigikogu voted in favour of the passage of the Act and three voted against.

The Act on Amendments to the Labour Market Services and Benefits Act (479 SE), initiated by the Social Affairs Committee of the Riigikogu.

Under the Act that was in force before, a manager of a company was not entitled to unemployment insurance benefit in the event of interruption of income from work. Under the Act that was passed, a member of the management board of a company will have the possibility to register as unemployed if his or her unemployment insurance period is twelve months during thirty-six months and he or she has not caused the loss of job. For the purposes of equal treatment, in the future, sole proprietors will also be able to register as unemployed.

The aim of the Act is to eliminate the conflict with the Constitution in the conditions under which managers of companies can be registered as unemployed and receive the unemployment insurance benefit. The Chancellor of Justice had drawn attention to the conflict with the Constitution. The Supreme Court had considered her proposal and had declared the provision unconstitutional and void this spring.

During the debate, Monika Haukanõmm took the floor and said that the Free Party Faction supported the aim of the Act. At the same time she said that the Act imposed too harsh conditions on the registration as unemployed as a member of the management board of a company.

78 members of the Riigikogu voted in favour of the passage of the Act and five voted against.

Six Bills passed the second reading in the Riigikogu:

The Bill on Amendments to the Sport Act and the Income Tax Act (534 SE), initiated by the Government, provides for the possibility to pay a compensation for expenses to referees which will be granted to a sports organisation or the owner of a sports school entered into the sports database.

The payment of the compensation for expenses will have to be connected with a referee acting as a volunteer at competitions reflected in the calendar plan of a sports federation or a county sports union or a sports association operating on a regional principle. The estimated rate of the compensation for expenses will be up to 20 euro per day of refereeing.

To receive a compensation for expenses, the person will have to be evaluated by a sports federation or be under 20 years of age, and the person may not receive wages or remuneration paid on the basis of a contract under the law of obligations for refereeing at the same competition.

During the debate, Jüri Jaanson, Jürgen Ligi and Lauri Luik from the Reform Party Faction, Tarmo Kruusimäe from the Pro Patria and Res Publica Union Faction, and Mihhail Stalnuhhin and Aadu Must from the Centre Party Faction took the floor.

The Reform Party Faction moved to suspend the second reading of the Bill. The result of voting: 23 members of the Riigikogu in favour and 51 against. Thus, the motion was not supported and the second reading of the Bill was concluded.

The Bill on Amendments to the Tobacco Act (357 SE), initiated by the Government.

With the amendment of the Act, its scope of regulation will be extended, in order to prevent and reduce the spread of addiction and health damage arising from tobacco products and related products in the society.

The prohibition of the display of tobacco products and related products, and the prohibition of the presentation of trademarks thereof on retail sales premises will be added. Exemptions will remain in place for specialised retail outlets, ships servicing international lines, and shops located in closed territories of airports and ports. Besides, the Bill will extend the provisions concerning sales promotion in the current Tobacco Act to products related to tobacco products (e.g. they must not be offered as a prize in a draw, an award or some other good), and the prohibition to sell products related to tobacco products in the same sales packaging with some other product (e.g. mobile phone bag or ashtray).

The Bill will restrict the availability and consumption of e-cigarettes. In addition to child care institutions, in the future, the use of e-cigarettes will be prohibited in all other places where smoking is prohibited (e.g. catering establishment and shops). In addition to the current prohibition on cross-border distance sales, there will be a prohibition on national distance sales of tobacco and related products, incl. electronic cigarettes. This means that in the future these products cannot be purchased via means of communication (e.g. e-commerce or catalogue).

The Bill will also establish requirements for the contents and purity of non-nicotine liquid for electronic cigarettes (e.g. liquid must not contain vitamins, caffeine or other substances that are associated with energy and vitality), and flavours other than those of tobacco will be prohibited in electronic cigarettes.

The Bill provides for an obligation to demand that the client who purchases tobacco or related products present an identity document, except in the case of a person who is obviously an adult or who is known to the seller. The Tax and Customs Board will be given the right to purchases for monitoring compliance to establish sale of illicit tobacco, and police officers will be given the right to purchases for monitoring compliance to establish sale of tobacco products or related products to minors, together with the right to involve persons of at least 16 years of age in making purchases for monitoring compliance as necessary.

The Act enters into force pursuant to general procedure. Regarding the prohibition of promotion, the prohibition of display and presentation of trademarks, the prohibition of national distance sales, the prohibition on flavourings in electronic cigarettes (only the smell and taste of tobacco are permitted), the prohibition of the sale of products related to tobacco products in the same packaging with other products, and the extension of the labelling requirements for existing packagings also to publications included in packages, the transitional period lasts until 1 January 2019.

During the debate, Madis Milling, Igor Gräzin and Maris Lauri from the Reform Party Faction, Tarmo Kruusimäe and Aivar Kokk from the Pro Patria and Res Publica Union Faction, Eiki Nestor, Jaanus Marrandi and Helmen Kütt from the Social Democratic Party Faction and Mihhail Stalnuhhin from the Centre Party Faction took the floor.

The Reform Party Faction moved to suspend the second reading of the Bill. The result of voting: 21 members of the Riigikogu in favour and 44 against. Thus, the motion was not supported and the second reading of the Bill was concluded.

The main purpose of the Bill on Amendments to the Bailiffs Act and Amendments to Other Associated Acts (280 SE), initiated by the Government, is to ensure sustainability of the freelance bailiffs system for which the Estonian enforcement system needs fundamental changes.

Major amendments introduced by the Bill on Amendments to the Vital Statistics Registration Act and Other Associated Acts (511 SE), initiated by the Government, are connected with the registration of births and deaths and the entering of the data of persons who have been granted international protection into the population register.

The Bill will significantly extend the range of persons who in the future will have the possibility to submit an application for registration of birth in a digitally signed form. If under the current Act only parents who are married to each other can submit an application this way, then under the new rules a majority of parents will have the possibility to submit a digitally signed application (except for the exceptions set out in the Act, for example parents who are minors and parents with restricted active legal capacity).

Under the Bill, the registration of a death will become considerably simpler from 1 July next year. As a general rule, there will be no need to go to a vital statistics office to register a death, because the data concerning a death will be entered into the population register automatically when a health care provider prepares a death certificate.

The Bill will establish a regulation for entering the data of persons who are granted international protection into the population register, because in most cases such persons do not carry documents certifying vital statistics events when they come to Estonia. The Bill will enable vital statistics data to be entered into the population register on the basis of a decision on the granting of international protection prepared by the Police and Border Guard Board under which vital statistics events and relationships are established within the framework of proceedings for granting international protection. More lenient requirements will be established for the formal requirements for vital statistics documents of persons who have been granted international protection, as persons in need of international protection are not in a position to comply with the requirements set for a foreign document in the current Act.

The Bill on Amendments to the Securities Market Act and Other Associated Acts (507 SE), initiated by the Government, will transpose the relevant EU directive on markets in financial instruments, the main objective of which is to strengthen investor protection. More investors have become active in the financial markets and are offered an even more complex wide-ranging set of services and instruments.

The Bill provides for the requirements for manufacturing and approval of securities and marketing them to clients. Investment firms will have to develop the corresponding internal rules. The requirements will also be applied to recommending and marketing of structured deposits. The aim of the amendment is to ensure that manufacturing and marketing of securities would be well-considered, with the knowledge of the management of the investment firm, and that clients are offered only investment opportunities that meet their needs and desired objectives.

The rules for execution of orders relating to securities have been amended. Investment firms will continue to have to ensure that they execute client orders on terms that are most favourable to the client. According to the Bill, it will have to be explained to the client how the execution of the orders of retail clients and professional clients differs if it differs. The obligation of investment firms to record and keep telephone conversations and electronic communications with clients will also be provided for.

The explanatory memorandum notes that the current Act does not ensure sufficient transparency for the client regarding the inducements that the investment firm receives or pays in relation to the provision of the service. For example, an investment firm providing the service of portfolio management can accept and retain commission if it acquires units of a certain fund of the client’s portfolio. In the future, an investment firm will have to disclose such inducements to the client before the provision of the service.

The Bill will amend the conditions for the provision of investment advice. The Financial Supervision Authority will be charged with the obligation to establish the requirements for the competence of investment advisors.

Under the Bill on Amendments to the Social Tax Act and the Income Tax Act (499 SE), initiated by the Government, sole proprietors will have a tax environment similar to that of companies, which will make it more favourable compared to the current environment and extend on sole proprietors the tax incentives and social guarantees established for employees. A sole proprietor is a person engaged in small enterprise, as a general rule, who offers goods or services in his or her own name and receives remuneration for that. At the moment there are more than 31,000 sole proprietors in Estonia.

Sole proprietors have to pay social tax on business income earned, and both a minimum and a maximum limit have been established for the payment thereof. According to the Bill, the maximum limit for social tax for sole proprietors will be reduced so that it will be not fifteen, but ten times the sum of the minimum monthly wages for the taxable period annually. This year, the maximum limit is 27.918 euro; with the amendment, this amount will decrease to 18.612 euro. Thus the maximum limit will decrease by 33 per cent. A sole proprietor will be given the possibility to reduce his or her minimum social tax obligation by the days when he or she was temporarily incapacitated for work in the event of sickness. In addition, a sole proprietor will be entitled to calculate for himself or herself a rated sickness benefit for the second until the eighth day of sick leave and to deduct it from the business income subject to social tax.

Sole proprietors who engage in studies as their main duty will be released from the minimum social tax obligation and the payment of advance payments of social tax. As a result of an amendment, they will no longer have the obligation to meet the minimum social tax obligation, and when earning business income, they will have to pay social tax only on income actually earned. A sole proprietor will have the possibility to deduct from business income the expenses made for improving his or her health to the extent of up to 100 euro in a quarter. Similarly to companies, sole proprietors will be allowed to deduct from income up to 10-euro expenses on advertising gifts, and their catering costs incurred upon engagement in business to the extent of the daily allowances during assignments abroad (50 euro for the first 15 days of an assignment abroad and 32 euro for each following day). Expenses incurred in entertaining guests and business partners can also be deducted to the extent of 32 euro per month.

A motions to amend submitted during the second reading specifies the eventual tax liability as sole proprietors of persons receiving state pension and persons with partial work ability, and the rules for calculating advance payments in their case.

Also, in the course of the second reading, an amendment that concerns low-income pensioners was made to the Bill. If a person receives a pension and a remuneration both of which amount to less than 500 euro but total more than 500 euro, he or she may submit an application concerning the basic exemption to both entities that withhold income tax. When doing so, it must be kept in mind that the basic exemption indicated on the applications to the employer and the Social Insurance Board may not exceed 500 euro in total.

Pensioners who have not worked in the previous year will not have to take any action; the Social Insurance Board will apply the basic exemption on the pensions paid to them automatically without an application.

Also, a motion to amend increased the amount of the part of income tax received by local governments by 0.02 percentage points, that is, by 1.8 million euro. It was also agreed upon that 1.3 million euro would go to the equalisation fund. The aim of the amendment is to support the support services of general education schools.

Three Bills passed the first reading in the Riigikogu:

The Constitution and the General Regulations of the Universal Postal Union (UPU) to be ratified by the Bill on the Ratification of the Final Acts of the 26th Congress of the Universal Postal Union (535 SE), initiated by the Government, do not have a significant economic, social or other impact. The Constitution is the basic document of the UPU which contains the basic rules of the Union. The General Regulations are a document concerning the organisation the work of the UPU and they involve no additional obligations for member countries. The Convention regulates thoroughly the rules applicable to the letter-post and postal parcels services.

The Convention contains the rules applicable throughout the international postal service and it is binding on all member countries. Member countries ensure that their designated operators (Eesti Post Ltd in Estonia) fulfil the obligations arising out of the Convention.

The Bill on the Ratification of the Agreement between the Government of the Republic of Estonia and the Government of the Kyrgyz Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (537 SE), initiated by the Government.

The purpose of agreements for the avoidance of double taxation is to facilitate investments between Contracting States. As an international legal act, the Convention grants greater legal certainty to investors, as compared with a national legislative act, in regard to the elements of the tax system that are regulated by the Convention, because amendment of a bilateral international convention is generally more time-consuming than amendment of a national legislative act. For the achievement of this aim, the Convention imposes restrictions on income taxes which may be established to the residents of the other state by the state of the source of income, ensures equal treatment of persons and eliminates possible double taxation. The obligation of mutual exchange of information provided for in the Convention will create additional possibilities for prevention of tax evasions.

The Bill on the Ratification of the Convention between the Republic of Estonia and Japan for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance and the Protocol thereto (549 SE), initiated by the Government.

The Bill will ratify the Convention between the Republic of Estonia and Japan for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance and the Protocol thereto.

The convention for the elimination of double taxation will create preconditions and security for mutual investments and for free movement of people, goods and services. The convention will distribute the taxation rights regarding different types of income between the two countries and provide for more favourable taxation rules than those in the national legislation. The convention will create the legal basis for the elimination of the international double taxation arising from the conjunction of the taxation systems of the two countries.

Differently from many conventions for the elimination of double taxation concluded earlier, the convention concluded with Japan restricts the granting of certain benefits arising from the convention with the aim to prevent treaty-shopping. The convention sets out a defined list of residents who are entitled to the benefits granted in respect of income from dividends and interest under the convention. They are for example an individual, a company whose shares are traded on a recognised stock exchange; a pension fund that meets certain requirements, or the Government.

According to the data of Eesti Pank, as at 31 March this year, the volume of Japanese direct investments in Estonia was 18.2 million euro, while the volume of Estonian direct investments in Japan was as small as 0.1 million euro.

Estonia has concluded the conventions for the elimination of double taxation with 57 countries. The conventions are drafted on the basis of the OECD model convention which is modified taking into account the tax system of the particular country.

The sitting ended at 7.15 p.m.

Verbatim record of the sitting (in Estonian).

Video recordings of the sittings of the Riigikogu can be viewed at: https://www.youtube.com/riigikogu

Riigikogu Press Service
Merilin Kruuse
Phone +372 631 6353, +372 510 6179
E-mail merilin.kruuse@riigikogu.ee
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