Estonia VAT guide
Value Added Tax (VAT) was first introduced on 1 January 1991.
The Estonian Tax and Customs Board under the supervision of the Ministry of Finance is the responsible authority managing tax matters.
Recent Updates:
- EC Sales List & VAT Return: Will be combined from 2027.
- Intrastat Arrivals: No longer required from 1 Jan 2025.
- Vehicle expenses: 50% deduction on mixed-use passenger car expenses extended until 31 Dec 2027 (Council Implementing Decision (EU) 2025/539).
- eInvoicing: Voluntary B2B eInvoicing may be requested by buyers from 1 Jul 2025 (Amendments to the Accounting Act).
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What is the VAT rate in Estonia?
24%
Standard rate: 24%
Reduced rate: 9% and 13%
Zero rate: 0%
Applies to exports and intracommunity supplies.
Exempt categories: Activities in public interest, such as heath, education and other listed activities such as finance and insurance.
VAT registration in Estonia
Any person whose turnover exceeds €40,000 from the start of a calendar year is required to register for VAT.
Non-established businesses in Estonia:
EU businesses:
- Must register in Estonia if thresholds are exceeded and notification formalities completed:
- EU-wide threshold: €100,000
- Denmark threshold: €40,000
- Distance sales: Registration not required if total sales are below €10,000.
Non-EU businesses:
- Must register for VAT regardless of turnover.
- May use the One Stop Shop (OSS) scheme if applicable to their supply chain.
Certain types of supplies in Estonia follow special VAT reporting rules, including:
- Travel agency services
- Works of art and second-hand goods
- Scrap and investment gold
- Additionally, eligible businesses may opt for the cash accounting scheme.
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eInvoicing requirements
On 18 September 2024, the Estonian Parliament amended the Accounting Act (Bill 428 SE) to align with the EU eInvoicing Directive (2014/55/EU).
Key Points:
- B2B eInvoicing: Buyers registered in the official eInvoice register can request suppliers to issue eInvoices. Suppliers must then notify the Estonian Commercial Register that they are issuing eInvoices or acting as an eInvoice handler.
- Accepted Standard: EN 16931 (EU Directive). Parties may agree on another compatible standard.
- Effective Date: Voluntary from 1 July 2025.
Background:
- Public sector entities in Estonia have been required to issue eInvoices since 2019.
- The amendment encourages private sector adoption, supporting a unified European eInvoicing standard.
Future measures:
- As announced by the Ministry of Finance on 4 December 2024, further steps aim to enhance VAT collection, including a draft amendment to mandate eInvoicing for all VAT-subjected B2B transactions from 2027.
VAT return filing and deadlines
The VAT filing frequency in Estonia is monthly.
The VAT return (Form KMD), including the KMD-INF addendum where applicable (listing invoices), must be submitted to the Estonian Tax and Customs Board by the 20th of the month following the reporting period.
VAT penalties
For late payment of VAT, 0.06% interest on the amount due per day is applicable. The tax authority may apply a fixed penalty for late submission at its discretion.
VIES declarations
VIES (VAT Information Exchange System) filing frequency is monthly and VIES must be submitted by the 20th calendar day after the end of the respective month.
Fiscal representatives
Non-EU businesses generally must appoint a fiscal representative to comply with VAT obligations, except for businesses established in Norway.
Intrastat
Registration and submission
Businesses must submit Intrastat reports when movements of goods within the EU exceed specified thresholds.
Intrastat Thresholds:
Intrastat Dispatches
- Simplified Reporting: €350,000
- Detailed Reporting: €350,000
Deadlines and frequency
Intrastat respondents have to submit their declarations monthly. The legal deadline is the 14th calendar day after the end of the reporting month.
IOSS (Import One Stop Shop)
The Import One Stop Shop was introduced as of 1 July 2021 to tackle VAT fraud and improve the competition conditions for EU businesses. Under the new scheme, the threshold value no longer applies, instead the scope of the IOSS covers goods imported from a third country with the value of up to €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.
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