Twitter Panic in Elbonia

Sten Tamkivi tweeted:

If this tax change happens, Estonia can say goodbye to any new international tech companies: http://bit.ly/2UVEC7 Outrageous!

This sparked a serial outrage of retweets and Facebook comments. Many people became heavily opinionated about an opinion leader’s opinion about a journalist’s opinion based on a [possibly, but not necessarily] out-of-context quotation of a tax lawyer. But few, if any, took the trouble to dig out the original source — the draft law containing the proposed changes to the income tax law.

I did. And my interpretation thereof is that the proposed change would simply remove a competitive advantage that Estonian subsidiaries of foreign companies currently hold over the “real” Estonian companies: while discounted stock or options issued by the latter are taxed as “fringe benefits”, those issued by the former are not.

In my opinion, Sten just overreacted. If the possibility of issuing untaxed discounted stock or options is the only (or even the main) reason for the foreign companies to set up their subsidiaries in Estonia, then we’re in deep crap anyway.

For the record: I don’t think stock or options given to employees should be taxed before the said employees cash out. But I fail to see why we should discriminate against our own companies and entrepreneurs.

Now go and retweet this to all your friends. The world really needs more opinions about opinions on opinions. :p

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