InfoCourier march 2024

The draft Alien Act Amendment Act (EU Blue Card), transposing Directive (EU) 2021/1883 of the European Parliament and of the Council is in the second reading in the Riigikogu.
The purpose of the amendment is to encourage the employment of third-country nationals in highly qualified jobs. To this end:

• The definition of higher professional qualifications and the requirements for the education of an EU Blue Card holder are specified. The qualifications required for application correspond to the nominal length of study, which is at least three years and is evidenced by a document attesting to higher education.
• The amendment regulates higher professional skills, which are considered upon application for a EU Blue Card as being equivalent to the knowledge, skills and competences attested to by higher education qualifications, i.e. the applicant is required to have at least five years of professional experience.
• The validity period of the work contract required in order to apply for a EU Blue Card is shortened. To apply for a EU Blue Card, a work contract must be concluded for at least six months instead of one year.
• The period of unemployment allowed to a EU Blue Card holder is brought into conformity with the directive. Currently, a EU Blue Card holder is allowed to be unemployed once for up to three months during the validity of the EU Blue Card. In the future, the allowed cumulative unemployment period may be up to three months or six months if the person has been holding a EU Blue Card for less than two years or at least two years, respectively.
• Due to the change in the allowed period of unemployment, the derogations to withdrawal of or refusal from renewal of the EU Blue Card are amended.
• The amendments elaborate on the conditions for mobility of third-country nationals with higher professional qualifications and the more favourable conditions for their family reunification.
  
  

In addition to transposing the directive, the draft also elaborates on the definition of a growth company. As a result of the amendment, a growth company may be, besides companies registered in Estonia, an Estonian registered branch of a foreign company.

The amendment act will enter into force according to the general procedure and is available HERE.

KPMG Baltics offers a range of immigration and consulting services to help companies successfully recruit workers from third countries.

The Treaty between the Government of the Republic of Estonia and the Government of the Islamic Republic of Pakistan for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance and the Protocol to the Treaty Ratification Act has reached the second reading in the Riigikogu. The treaty will enter into force after both countries have notified each other of the completion of the domestic procedure necessary for the treaty to enter into force. The provisions of the treaty will be applied in Estonia from 1 January of the year following the entry into force of the treaty. The treaty will be applied in Pakistan from 1 July of the year following its entry into force.

In Tallinn District Court Judgment 3-22-1154, the representative of a company, i.e. a member of the company’s management board, has been asked to give oral explanations to the tax auditor. The company representative requested the Tax and Customs Board (hereinafter “TCB”) to allow oral explanations to be given through an IT application. The board member reasoned that they were unable to attend personally together with the accountant. Namely, the accountant was said to have been diagnosed with bronchial asthma, which is why they preferred non-contact conversations, and in addition, the accountant’s spouse was about to undergo scheduled surgery, and therefore it was necessary to protect the spouse’s health as well.

MTA took the position that since the questions awaiting oral explanations concerned circumstances related to economic activity, which could only be answered by a member of the management board, the presence of the accountant was unnecessary. The fact that the company’s accountant was unable to participate in giving oral explanations at the tax authority’s office for health reasons did not constitute a reason why the management board member could not provide oral explanations at the tax authority’s office. The TCB also pointed out that if the TCB should have any questions about the accounts, they could ask those questions of the accountant in writing.

The TCB supplemented their position by pointing out that oral explanations had been given at the tax authority’s office also during the COVID-19 pandemic. To protect those giving explanations, the TCB itself uses and would provide the complainant and their representative with personal protective equipment (a visor mask), and a glass partition had been installed in the interview room. Therefore, the accountant can, if they desire, participate in giving oral explanations at the tax authority’s office without having to fear for their health.

In summary, the TCB gave the company’s representative two opportunities to go to the tax authority to give oral explanations, without applying a non-compliance levy. However, the management board member failed to appear to give explanations also on the second occasion, which is why the TCB applied a non-compliance levy and found that the taxpayer had maliciously delayed the tax procedure.

The judgment is available here.