Estonia introduced Value Added Tax in 1992. The rules on Estonian VAT registrations, returns and compliance are based on European Union EU VAT Directives which Estonian transposed into its VAT Act after its accession to the EU in 2004. The tax is administered by Estonian Tax and Customs Board.
Foreign companies, or ‘non-resident’ traders, providing goods or services in Estonia to local businesses or consumers may have to register their business for Estonian VAT. They will then have to follow the Estonian VAT compliance rules, including invoicing and VAT rates, as well as pay over any Estonian VAT due.
Should you register for Estonian VAT
There are a number of trading situations which typically require a foreign trader to register with the Estonian tax authorities. These follow the broad EU VAT rules, and include:
- Importing goods into Estonia from another country, either from within the EU or from outside the EU
- Moving goods between Estonia and other EU member states (intra-community supplies), either as sales (dispatches) or purchases (arrivals)
- Buying and selling goods in Estonia
- Selling goods over the internet to Estonian consumers, subject to the Estonian distance selling VAT regisration threshold
- Goods held in consignment stock
- Holding live exhibitions, events or training in Estonia
- If a company is otherwise a non-VAT trader, but is receiving services in Estonia under the reverse charge rule
- The self-supply of goods
Few companies need to VAT register if they are providing services to local Estonian companies, and instead can use the Reverse Charge process. This is based on the 2010 VAT Package changes.
Note that providers of electronic, broadcast or telecoms services to consumers in Estonia only have to VAT register in one EU country under the MOSS scheme to file a single return covering all 27 member states.
If you do need to VAT register, read our Estonian VAT registration briefing to understand the requirements, including the VAT registration thresholds. You can also read about Estonian VAT returns.
Need help with your Estonian VAT compliance?
Researching Estonian VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.
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