Estonia VAT Guide

Estonia VAT Guide for Businesses

Value Added Tax (VAT) was first introduced on 1 January 1991 in Estonia as per Government Regulation 209. The current VAT Act came into effect on 1 May 2004 in accordance with the provisions of the EU VAT Directive (Council Directive 2006/112/EC).

The responsible authority managing tax matters in the country is the Estonian Tax and Customs Board under the supervision of the Ministry of Finance.

What is the VAT Rate in Estonia?

From January 2024:

22%

Reduced Rate: 9%

Applicable for books and educational literature; certain medical products and medicines; press publications; and accommodation services, breakfast included (this overview is non-exhaustive, the VAT Act contains further details about the regulations on the application of the reduced VAT rate on these goods and services).

Zero Rate

Applicable for specific goods and services described in Article 16 of the VAT Act.

Compulsory registration for resident taxable persons:

Threshold in terms of supplies: Taxable turnover of €40,000 in a calendar year
Threshold with regard to purchase transactions: VAT payer with limited liability (without the right to deduct input VAT):
The value of intra-Community acquisition of goods exceeding €10,000 in a calendar year
Acquisition of services from a business that is not resident in Estonia (obligation arises on the date of the receipt of such service)

Deadline to submit the registration application: within 3 working days of the date on which the obligation arises.

Voluntary registration is permitted in the cases listed below:

The registration threshold has not been exceeded yet
Intra-Community acquisition of goods that are exempt from VAT
Export

Compulsory registration for non-resident taxable persons:

No fixed establishment in Estonia but performs taxable supplies not falling under the reverse-charge mechanism
No fixed establishment but performs intra-Community acquisition of goods in Estonia (with the exception of exempt goods) – registration as a VAT payer with limited liability is required
Fixed establishment: taxable turnover of EUR 40,000 in a calendar year
Distance sales: threshold of EUR 35,000
Businesses carrying out zero-rated supplies only need to register if the transactions are related to intra-Community supply of goods

Deadline to submit the registration application: within 3 working days of the date on which the obligation arises.

Invoicing Requirements

As per the VAT Act, invoices should contain certain information including the following:

Invoice number and date
Name, address and VAT registration number of the supplier
The customer’s name and address
The VAT ID of the customer if they are subject to VAT on the supply received
Description and quantity/volume of the goods or service provided
If a payment or service provision or supply of goods is made before the invoice is issued, the respective date of the event(s)
Price of the goods or services, exclusive of VAT and discounts not included in the net value
VAT amount by VAT rates separately
VAT amount indicated in euro
In case a supply is zero-rated or exempt from VAT; or the reverse-charge mechanism and/or any special arrangement is applicable, the relevant provision of the VAT Act should be indicated
VAT number, name and address of the tax representative, if appointed
Reference ’self-billing’ if self-billing is applied

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VAT Filing Frequency

VAT returns and their annexes shall be filed on a monthly basis (calendar month). Longer reporting period may be granted by the Estonian Tax and Customs Board based on a well-reasoned request submitted by the taxable person.

The intra-Community supply and Intrastat reports are also reportable based on a calendar month after exceeding the respective thresholds.

Deadlines

Both the VAT returns and intra-Community supply reports are due to be submitted by the 20th of the month following the reporting period; while the filing deadline for Intrastat reports is the 14th day from the end of the month it relates to.

Agents and Fiscal Representatives

Non-EU businesses are required to appoint an agent in Estonia for VAT purposes – except for the OSS (One-Stop Shop) registration, while EU businesses without a fixed establishment can appoint a tax representative voluntarily.

IOSS (Import One Stop Shop)

The Import One Stop Shop was introduced as of 1 July 2021 in order to tackle VAT fraud and improve the competition conditions for EU businesses. As per the rules under the new scheme, the threshold of EUR no longer applies, instead the scope of the IOSS covers goods imported from a third country with the value of up to EUR 150 – excluding excise goods.

Under the IOSS scheme, third country businesses have the opportunity to register and pay VAT in one EU Member State only. As for their obligations, the registration needs to be done online and relevant information and documents need to be kept for 10 years from 31 December of the year in which the respective transaction is performed. The reporting period of the IOSS scheme is a calendar month.

Submission

Taxable persons are required to submit their VAT returns electronically. If a business wishes to complete and submit the returns in the online system they can choose from two options to do so: they can either enter the data manually or use uploader files in the permitted formats.

Another solution for filing the VAT returns electronically is sending the reportable data from the business software directly, via X-tee.

However, paper submission is also available for businesses being registered for VAT for less than 12 months or the annex contains less than 5 invoices. The Tax Board may also allow filing the returns on paper upon request.

Both electronic and paper submission is available in terms of the intra-Community supply report.

As for the Intrastat declarations, these can be filed via eSTAT to Statistics Estonia manually or with the help of uploader files.

Recent VAT Updates in Estonia

January 2022: Global VAT Guide – Decreased VAT obligation for the seller if the purchaser is declared insolvent.

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Estonia VAT Guide