Estonia VAT returns

Non-resident traders with a VAT number are required to file regular Estonian VAT returns in order to report taxable transactions in Estonia and any VAT due/refund from the tax payer. If a trader has been liable to pay VAT in Estonia for more than 12 months the return must be submitted electronically using form KMD.

How often are Estonian VAT returns required

The default tax period for Estonian VAT returns is one month. The return must be submitted to the tax authority on the 20th day of the month following the tax period. Businesses are not required to submit annual VAT returns in Estonia.

What Estonian VAT can be deducted?

Companies registered in Estonia, and charging Estonian VAT, may offset the VAT output on sales with the VAT suffered on Estonian supplies (input VAT). This includes VAT charged on the import of goods. Examples of VAT deductions include:

  • Taxable supplies that are subject to the Estonian standard, reduced or zero rate
  • Foreign taxable supplies (that would qualify for VAT had they been purchased in Estonia)
  • Certain financial services
  • Certain insurance services

Examples of non-recoverable input VAT include

  • Accommodation for employees (with the exception of business trips)
  • Business entertainment
  • Works of art, collectibles and antiques
  • VAT exempt supplies

What are the deadlines for filing Estonian VAT returns?

Estonian VAT returns must be submitted to the tax authority by the 20th day of the month following the tax period.

Any Estonian VAT due must be paid before the above deadline.

Where are Estonian VAT returns filed?

When a company is first VAT registered, it is registered with the Estonian Tax and Customs Board in Tallinn.

Estonian VAT penalties

Penalties for late Estonian returns and VAT payments are as follows:

  • Failure to register for VAT (maximum penalty EUR3,200)
  • Failure/delay of VAT return submission/payments (maximum penalty EUR2,000)
  • Incorrect VAT return (maximum penalty EUR3,200)
  • Deliberate inaccuracies (maximum penalty EUR32,000)

Interest is charged on late payment of VAT due and is currently set at 0.06% per day.

How are Estonian VAT credits recovered?

If there is a surplus of VAT inputs over outputs (more VAT incurred than charged), then a Estonian VAT credit arises. Excess input VAT can be carried forward to the next tax period or may be refunded by the tax authority within thirty days of receipt of an application.

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