Abstract

The article analyzes the employment condition under the lump-sum tax on corporate income (Estonian CIT). The core of the study is the conflict between natural staff turnover and the strict approach of tax authorities, requiring 300 days of employment for each separate full-time equivalent. Such literal interpretation creates a trap for small and medium-sized enterprises, contradicting the law's objectives and the assumed 65-day buffer. The paper discusses the landmark judgment of the Supreme Administrative Court, which applied purposive interpretation to allow cumulative counting of the employment period. The conclusion formulates a postulate to issue a general interpretation to guarantee legal certainty.