VAT compliance and reporting rules in Estonia 2024
Below is summary of the major rules provided under Estonian VAT rules (VAT Act of 2003 (Käibemaksuseadus) and VAT regulations (käibemaksuseaduse rakendusaktid)). Plus adoption of the EU VAT Directive. Check our country VAT guides for other jurisdictions.
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Estonia VAT country guide
| Highlights | Local term | Käibemaks (KM) |
| VAT Rates - standard | 22% | |
| Rates news | 2% VAT rise Jan 2024 | |
| VAT Rates - reduced | 13%; 0% | |
| VAT number format | EE 123456789 | |
| Registration threshold | €40,000. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions Nil | |
| VAT Group | Permitted | |
| VAT recovery foreign businesses | Permitted. Reciprocity agreement is required for non-EU businesses | |
| Fiscal Representative | Required of non-EU businesses | |
| Currency | Euro €, January 2011 | |
| Administration | Introduction | Estonia introduced VAT in January 1991. It joined the European Union in 2004. |
| VAT laws | VAT Act of 2003 (Käibemaksuseadus) and VAT regulations (käibemaksuseaduse rakendusaktid). Also EU VAT Directive which takes supremacy as part of EU membership | |
| Tax Authorities | Tax and Customs Board (Maksu- ja Tolliamet), part of the Ministry of Finance. The Tallinn office manages foreign, non-resident businesses | |
| VAT Rates | Standard rate | 20% |
| Rates news | Newspaper and diesel cuts | |
| Reduced rates | 9%: medical products; books and journals - including electronic versions; accommodation | |
| Zero-rated | Intra-community passenger travel by air and sea; Exports and intra-community supplies of goods; gold to central banks; services related to vessels and aircraft | |
| Exempt | Education; financial services; health, hospital, and social welfare; public postal; letting immovable property; betting and gambling; welfare services; international passenger transport; certain copyrights | |
| Scope of VAT | Scope of VAT | Provision of domestic taxable goods and services; EU imports; intra-community acquisitions; Distance selling of goods B2C (OSS or IOSS); receipt of services or goods via the reverse charge |
| Time of supply | Goods & Services (general rule) | Goods at time of delivery (or start of transport); services at time of provision. Prepayment, if sooner, triggers VAT tax point. |
| Reverse Charge | Earlier of time of supply or payment of consideration | |
| Continuous Services | At time of completion of service generally if covers multiple VAT return periods. If longer than twelve months without invoice or payment, than at calendar year end | |
| Imports | At the time the goods clear Estonian customs or exit a bonded warehouse | |
| Goods on approval and return | General rule applies | |
| Registration | VAT registration threshold | €40,000. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions Nil |
| Voluntary VAT registration | Permitted | |
| VAT number format | EE 123456789 | |
| VAT Group | Permitted when two or more taxpayers are connected (shared ownership of 50% or more). Non-resident without establishment are excluded. Transactions between group members are zero-rated with no requirement for an invoice. Consolidated VAT return under a single VAT number (for transactions outside the group) and EC Sales Listing (see separate) must be submitted. All members share VAT liabilities. Holding companies without a taxable supply are excluded. | |
| Non-residents | Permitted, but non-EU businesses must appoint a Fiscal Representative (see separate) | |
| Fiscal Representative | Required for non-EU businesses looking to VAT register. EU-resident business must register in person or appoint a proxy to register. | |
| Digital Services | Estonia participates in the EU single One Stop Shop (OSS) VAT return for digital, telecoms and broadcast services. This was formerly the MOSS regime until 30 June 2021 | |
| Pre VAT registration costs | Permitted where directly relate to the provision of the taxable supply | |
| VAT Invoices | Issuance | Within seven days of the supply of goods or services. This is extended to 15 days for intra-community supplies. Not required for retail transactions unless requested. |
| Content | Date; unique sequential invoice number; name and address of supplier and customer; Customer VAT number for intra-community supplies or reverse charge; date of supply or advance payment if different from invoice date; Description, quantity or units etc of supply of goods or services; price per unit; taxable amount; VAT charged; rate (broken out if supplies at different rates); total; explanation if zero-rated supply. | |
| E-invoices | 2025 e-invoicing proposals | |
| Simplified invoices | Permitted for amounts not exceeding €160 for passenger transports and some vending machines. | |
| Self-billing | Permitted with a written agreement between the supplier and their customer. The agreement must include details of how the supplier will accept the invoices. | |
| Retention of invoices | Seven years. Permission from the tax office is required to hold the invoices outside of Estonia. And immediate access should be assured. Invoices may be digitised | |
| FX rules | Invoices may be issued in foreign currencies, but the VAT payable should be shown in €. The exchange rate at the time of supply should be based on the ECB published rate. | |
| Invoice corrections | Credit or debit notes may be used, with a clear reference to the original invoice number and reason for adjustment. Simplified invoice format may be used. | |
| Compliance | Right to deduct | Excluded: business entertainment; business gifts above €10; accommodation and food for staff (except business trips) 50% of purchase or lease price of cars and running expenses if not used only for business |
| Call-off stock | Following the EU's 2020 Quick Fix harmonisation reforms, stock may be transferred from an EU state to an customer location/warehouse in Estonia without triggering a VAT registration and supply for a non-Estonian supplier. Title has not passed until the customer takes the goods for production and sale. At which time a zero-rated transaction may be effected. This must happen within 12 months of the original movement | |
| Reverse Charge - B2B | In addition to the regular use of the reverse charge on cross-border B2B services, it is also applied for non-residents without an Estonian VAT number for the supply of goods or services to a VAT registered customer. Applied for non-residents supplying a domestic distributor of natural gas and electricity. Estonia applies the domestic reverse charge for: scrap metals; certain metal products. | |
| Cash discounts | An adjusting credit note should be issued when a customer takes up a cash discount offer after the sales invoice has been issued | |
| Bad debt relief | Not provided for | |
| Import VAT deferment | Postponed VAT accounting for deferring import VAT to the VAT return is permitted for both residents and non-residents. An application for a licence is required, and will be granted if good compliance history and have more than 50% of sales as zero-rated supplies. Exemption is allowed in the case of an import and immediate (30 days) intra-community supply. | |
| VAT warehouse | Estonia permits approved VAT-exempt warehouse locations for goods (bulk crops, chemicals etc) set in Annex V of the VAT Directive. Bonded warehouses for the pre-clearance trade of goods under duty and import suspension is also provided for. Estonia also operated 'free zones' | |
| Supply & install | Non-resident providers of goods with an instal service may elect to use the reverse charge if the service element exceeds 5% of the value of the contract. This means their business customer should account for the VAT through their VAT return and no VAT payment is made. If the value is less than 5%, then the sale of goods as a zero-rated acquisition would usually apply. | |
| Use and enjoyment services | Estonia has only introduced the use & enjoyment rules for: telecoms; broadcast; and electronic services | |
| Capital goods adjustment period | Movable property: five years. Immovable property: ten years | |
| Non-residents VAT recovery | EU businesses may apply for Estonian VAT reclaims through the electronic portal of the tax authorities of their company of residency (8th Directive). Quarterly claims above €400 permitted, with final claim above €50 by 30 Sept of following year. For non-EU businesses, Estonia does require a reciprocal agreement with the country of residence of the claimant. Currently this is: Norway; Switzerland; Iceland, Israel; and the UK. Non-EU businesses must submit a paper-reclaim with supporting invoices via the Estonian authorities directly (13th Directive). Non-EU businesses do not have to appoint an Estonian resident Fiscal Representative for the reclaim process. | |
| VAT on Digital Services | Estonia follows the EU VAT on digital services regime, introduced in 2015. This includes participation in the One-Stop-Shop (OSS) single EU VAT return (formerly MOSS until 30 June 2021) | |
| Live events | ||
| Distance selling threshold for goods | Nil. Following the EU ecommerce VAT package reforms from 1 July 2021, local Estonian VAT must be charged on all sales by non-Estonian EU e-commerce sellers shipping from within the EU. Imported distance sales not exceeding €150 liable to Estonian sales VAT with IOSS return option | |
| Cash accounting scheme | Permitted for resident is sales do not exceed €200k per annum | |
| VAT registered cash tills | N/a | |
| Statute of limitations | Three years | |
| Other | N/a | |
| VAT Returns | Frequency | Monthly. |
| Filing method | Electronic - E-Tax Board - but not compulsory | |
| Deadlines (inc payments) | 20th of the month following the reporting period. | |
| VAT credits | Must apply for a refund. Otherwise any surplus input VAT will be rolled over to next return(s) | |
| Corrections | Corrective return for newly registered taxpayers with less than five invoices per return. Otherwise, separate application. | |
| Non-residents | Permitted. Same rules as residents. No VAT registration threshold. Fiscal Representative for non-EU businesses | |
| Other filings | Monthly European Sales Listing for goods and services supplies 20th of month following, and there is no reporting threshold. Intrastat monthly by the 10th of the following month for supply of goods above threshold: dispatches: €350k; arrivals: €700k. Domestic sales and purchases monthly recapitulative statement (Appendix KMD INF) required with each VAT return for VAT transactions above €1,430. Annual VAT return required for financial services, material adjustments to VAT liabilities. | |
| SAF-T | N/a | |
| Penalties & interest | Missed filings penalty up to €32,000. Daily interest charge of 0.06% for unpaid declared VAT. | |
| B2C Distance Selling returns | Estonia participates in the One-Stop-Shop OSS pan-EU VAT return for distance selling, introduced in July 2021. |
