Under the 1994 agreement, Estonian tax on royalties paid to a UK resident recipient who is the beneficial owner of the royalties is reduced to
- 5 per cent of the gross amount where the royalties are for the use of industrial, commercial or scientific equipment,
- 10 per cent of the gross amount of other royalties
However, a “most favoured nation” provision in the agreement was triggered when the Estonia/Switzerland agreement entered into force on 16 October 2015. The effect of this provision is that from 16 October 2015 no source state taxation is permitted under the DTA in respect of royalties.