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Estonia VAT guide

VAT compliance and reporting rules in Estonia

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 20%
VAT Rates - reduced 9%; 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%
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 Permitted with agreement of customer.  In accordance with EU e-invoice Directive EU Directive 2010/ 45/EU
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: €130k; arrivals: €230k. 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.

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