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Paying dividends assumes that your business has made a profit in the past, i.e. dividends may be paid to the shareholder from net profit or retained profit from previous years. To pay dividends, the annual report with the necessary annex needs to be reported by Xolo and approved/signed by the owner of the company.

A standard financial year for your company via Xolo Leap starts on January 1st and the financial year is 12 months long.

For example, if you start your company after July 1st (in Q3 or Q4 of the first year) then Xolo consolidates this period and the next year into one financial year by default. You’d need to submit your first annual report after the end of the second financial year and you can pay dividends at the beginning of the third year at the earliest.

If a company registered in Q3-Q4 of its first year earns a profit during this period and seeks to disburse dividends early, Xolo can submit the annual report in Q1 of the second year, upon request. When conducted voluntarily, the preparation and submission of the annual report is regarded as an additional service offered by Xolo for a fee of €200 + VAT. Consequently, the company will be able to distribute dividends at the beginning of the second year.

Taxes on dividends are paid when you make the actual dividend payment (not when declaring the dividends). With Xolo Leap, the dividend payouts can be made once per financial quarter if your annual report has been confirmed and the initial share capital has been paid and registered properly in the Estonian Business Register.

Paying dividends before declaring them with the annual report is not an option.

Please read more about the rules for paying dividends:

What are the rules for paying dividends (operating outside Estonia)?

What are the rules for paying dividends (operating in Estonia)?