The term zero corporate tax refers to the unique corporate tax system in Estonia. There, the traditional corporate income tax is not imposed on company profits. Instead, Estonia has implemented a corporate tax system called the tax on distributed profits or tax on corporate profits. Under this system, a tax rate of 20% is applied to profits that are distributed among shareholders. This means that companies in Estonia are free to retain their profits without being subject to corporate income tax. Thus, they promote a favorable business environment and attract investment.