Enterprise Estonia starts winter campaigns introducing Estonia as a tourism destination

At the end of October Enterprise Estonia started large-scale campaigns introducing Estonia in Finland, Sweden, Norway, Great Britain and Russia with the aim to popularize Estonia as a tourism destination and arouse interest towards Estonia as the place of spending one’s vacation during the winter period, EAS announced.

According to Tarmo Mutso, the director of Estonian Tourist Board, the campaigns held in St. Petersburg, Stockholm and Oslo focus mainly on the possibilities to spend one’s vacation in the city, the campaign planned in Helsinki mainly on wellness and relaxation. The small-scale activities directed to the end consumers have been also planned in London.

“The target group of winter campaigns is in average in the age of 35-55 to market Estonia as a tourism destination in also these age groups who mostly visit Estonia, “ Mutso said and reminded that the campaign of "Ispace Tallinn/Estonia" held from October up to December in MTV channels introduces at the same time the Estonian possibilities for tourism to the younger target groups in the age of 25-35.

The campaign “Estonia is close” started as the first already this week in St. Petersburg, the focus of the there campaign is the winter vacation for the families, year-end celebrations and city vacation in Tallinn and Tartu. The budget of the campaign to be held in St. Petersburg is EEK 3.9 million, of which EEK 3.45 million is the cost of media spaces. During the campaign the ads are displayed at the streets of St. Petersburg and in press. The radio ads are played in the underground of St. Petersburg and different radio stations. The two-week prize game series are held in radio, where the trip to Estonia can be won every day.

The separate site will be opened in the website of Visitestonia.com for the campaign with the best season offers of the Estonian entrepreneurs, the additional prize game “With 80 hours around Estonia” is organised. To increase the number of visitors of Visitestonia.com the internet banners are displayed in the different more popular web portals of St. Petersburg.

"St. Petersburg is close to us not only due to its geographical location, but the people of this region have strong relations with Estonia, they are interested in our culture and come to visit their friends in Tallinn and other Estonian cities with pleasure. We are very pleased to note that the campaign of the last year “Give Tallinn as a gift” was successful among the residents of St. Petersburg and the number of tourists started to show the positive trend, “ Mutso mentioned.

The winter campaigns held in other European cities start from November.

Enterprise Estonia organises the total of 80 different activities and events for the purpose of marketing Estonia as a tourism destination in 2008, in the course of which approximately 340 journalists are notified of the Estonian possibilities for tourism, besides the final consumers of target markets, with the aim to increase the number of media recordings at the target markets and 420 tour operators with the aim to expand the choice of tourist products offered by them at the target markets.

In the first half of 2008 several activities have been carried out for the purpose of marketing Estonia as a tourism destination, e.g. the event “Estonia pays a visit” in Helsinki, the conference of the global organisation of tourism journalists FIJET in Estonia, the tv-show “Trips in Estonia” in Finnish YLE2, “Have a vacation in Estonia” seasonal campaigns and 17 tourism fairs have been attended with the joint displays.

The programme of marketing Estonia as a tourism destination is co-financed from the Regional Development Fund of European Union.

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Falling share prices make Tallinn Stock Exchange a world loser

Tallinn Stock Exchange Index OMX that was down 1.7 percent yesterday made TSE one of the three bourses that fell most in the world.

Unlike most other bourses in the world, share prices continued to fall in Tallinn and was ahead only of Sofia and Belgrade bourses in terms of share index yesterday.

The biggest turnover was recorded in Estonian Telecom whose price fell 2 percent to 76.6 kroons at a turnover of 8.5 million kroons. The biggest loser was Arco Vara that closed at 3.6 kroons or its all-time low.

Also shares of Ekspress Grupp and Olympic Entertainment Group reached their historic lows yesterday.

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Estonian tax rules again under criticism from the Commission

Less than a month ago, the Commission closed infringement proceedings against Estonia over discrimination of foreign pension funds but on 16 October 2008, a new infringement proceeding against Estonia was announced (Commission’s press release IP/08/1532).

The goal of infringement proceedings is to ensure uniform and common application of Community law in the Member States. It represents the second step of three-step proceedings and Estonia has two months to react to it. If the outcome is not satisfactory to the parties, the Commission may bring the matter before the European Court of Justice.

This time, the problem is the taxation of pensions paid to non-resident pensioners in Estonia. Namely, Estonian resident pensioners have the right to deduct up to 63 000 kroons (personal allowance of 27 000 kroons plus additional personal allowance of 36 000 for pensions) from income in the calendar year. Similar allowances are made available to residents of another Member State of the European Union only in case income received in Estonia exceeds 75% of their total income.

The case-law of the European Court of Justice has repeatedly indicated that different taxation of a resident and a non-resident persons who are objectively in the same situation, may lead to indirect discrimination which is in conflict with the principle of free movement of persons laid down in the Treaty establishing the European Community. When a person relocates to another country, the tax burden with regard to pensions received in Estonia may increase because he/she may lose the right to the personal allowance.

Therefore, the Estonian Income Tax Act might not be in compliance with the European law because the issue of equal treatment of people raised by the European Court of Justice is not related to the extent of income received in Estonia but whether he/she can apply personal allowances similarly to local taxpayers. The existing case-law of the European Court of Justice has demonstrated that the source country has the obligation to enable a person to take personal allowance into account if the person is unable to do it in another country.

The case is of interest because many other Member States also apply approach similar to Estonia when determining tax-exempt income. Therefore infringement proceedings launched against Estonia and a potential court case may also have a significant impact on the tax systems of other Member States of the European Union.

With regard to infringement proceedings against discrimination of pension funds mentioned at the beginning, it is worth mentioning that the Commission closed the proceedings on the ground of amendments made to the Income Tax Act adopted in spring which abolished withholding tax on dividends. The new draft Income Tax Act which recently passed the first reading in the Riigikogu (Parliament of Estonia) eliminated the amendment. When the withholding tax on dividends remains in force, it is not precluded that the Commission will have to renew these infringement proceedings.

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