Estonian VAT rates and VAT compliance
Estonian VAT Compliance
Once registered for Estonian VAT, you will have to start following the local rules in a number of aspects. This includes:
- Issuing invoices with the disclosure details outlined in the Estonian VAT Act.
- Electronic invoices with proper signature, authenticity and agreement by the recipient.
- Maintenance of accounts and records, which must be held for at least 7 years.
- Processing of credit notes and other corrections
- Use of approved foreign currency rates.
- Correct invoicing of customers for goods or services in accordance with the Estonian time of supply VAT rules.
Estonian VAT rates
Whilst Estonia follows the EU rules on VAT compliance, it is still free to set its own standard (upper) VAT rate. The only proviso is that it is above 15%. Suppliers of goods or services VAT registered in Estonia must charge the appropriate VAT rate, and collect the tax for onward payment to the Estonian tax authorities through a VAT filling: see Estonian VAT returns briefing.
The current rates are:
|Rate||Type||Which goods or services|
|20%||Standard||All other taxable goods and services|
|9%||Reduced||Certain pharmaceutical products; medical equipment for disabled persons; books (excluding e-books); newspapers and periodicals; hotel accommodation|
|0%||Zero||Intra-community and international transport|
What is the tax point for Estonian VAT?
The tax point (time of supply) rules in Estonia determine when the VAT is due. For imports, it is the time of importation. Where a VAT invoice has been issued (most B2B transactions), the tax point for supplies of goods in Estonia is the invoice date. This date is used for the tax point regardless of when the actual supply took place. The tax point for Estonian services, where a VAT issue is supplied, is also the invoice date regardless of when the service was performed or delivered. The tax point for intra-Community supplies is the 15th day of the month following the month in which the supplies were dispatched or made available to the customer. If the invoice date is earlier than this, then that date will be the tax point.
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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