This Article Covers VAT Registration in Estonia
This article is intended for legal entities and sole proprietors planning to conduct business activities within Estonia VAT.
Value-Added Tax (VAT): General Provisions
VAT is an indirect tax applied to the sale of goods and services within Estonia.
All companies operating in Estonia must register as VAT payers if their annual turnover exceeds the threshold established by law.
Important! Timely VAT registration in Estonia is crucial for tax declaration. Failure to comply may result in fines and penalties, which depend on the amount of unpaid tax and the duration of the delay.
VAT Registration and Mandatory Conditions
You qualify for VAT registration under any of the following scenarios:
- Annual turnover in Estonia exceeds €40,000.
- Importing goods into Estonia from outside the EU. A VAT number is mandatory for customs clearance.
- Annual sales turnover within the EU exceeds €10,000.
- Triangular transactions: These involve three parties:
- Your business client with a VAT number is in Germany.
- The supplier with a VAT number is in Poland.
- The goods are shipped directly from Poland to Germany without entering Estonia.
Such transactions must be declared in the VD declaration.
In these cases, the Estonian Tax Department is obligated to issue a VAT number. If supporting documents are not provided, the application may be denied.
VAT Registration Procedure in Estonia
VAT registration applications are submitted electronically through the e-MTA portal (the electronic system of the Estonian Tax and Customs Board). An electronic signature is required to file the application.
Documents required for submission:
- Purchase invoices and contracts with suppliers;
- Sales invoices and contracts with customers;
- Bank statement;
- A clear and concise description of the business model.
The application is reviewed within 1-5 business days, after which the tax authority decides whether to approve or reject the registration. In case of rejection, the reasons for the decision are provided.
VAT Reporting and Payment in Estonia
VAT declarations are completed electronically via the e-MTA portal. The deadline for submitting declarations for the previous month is the 20th of the following month.
Declarations must include all taxable transactions as well as the amount of VAT charged and paid.
For turnovers exceeding €1,000 in Estonia, detailed reporting is required, including specifying each counterparty in sections A and B of the VAT declaration.
VAT Rates and Declarations in Estonia
VAT registration in Estonia requires the submission of monthly declarations, which include:
- Information on VAT-related transactions within Estonia for all purchases and sales.
- VAT rate: 22% in 2024, increasing to 24% in July 2025.
- Information on exports outside the EU.
- Information on intra-EU sales (declared separately in the VD declaration).
- Information on VAT payable for imports.
- Information on the purchase of fixed assets.
- Information on transportation expenses.
- Information on intra-EU purchases with 0% VAT.
- Details of tax-free transactions.
To ensure proper filing and confidence in your business operations, working with a professional accounting firm is essential.
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Summary
VAT registration as a taxpayer is a mandatory procedure for all legal entities and sole proprietors conducting business in Estonia.
The VAT registration process in Estonia involves submitting an application, providing the necessary documents, and receiving a decision from the tax authority within 1 to 5 days.
For seamless Estonia VAT registration and reporting, partnering with experienced accounting professionals ensures compliance and peace of mind.