Registration as a VAT liable person in Estonia

This article contains information on the procedure for registering as a person liable for value added tax (VAT) in Estonia. The document is intended for legal entities and individual entrepreneurs who plan to carry out economic activities in the territory of the state.

General Provisions

The turnover tax is an indirect tax levied on the sale of goods and services in Estonia. All legal entities and sole proprietors operating in Estonia are required to register as VAT payers if their annual turnover exceeds the threshold established by law.

Important! Late registration entails fines and penalties, the amount of which depends on the amount of arrears and the period of delay.

The current registration threshold is 40,000 euros per calendar year. If a company’s turnover exceeds this figure, it must apply for registration within 20 days of reaching the specified threshold. If the annual income exceeds 10 thousand euros, but does not reach 40,000 euros, then the company must be registered as a limited liability company for turnover tax.

Registration procedure

The application for registration is submitted electronically via the e-MTA (electronic management of tax administration) portal. An electronic signature is required to submit the application.

The following documents are attached to the application:

· constituent documents of a legal entity;

· certificate of state registration of individual entrepreneur;

· documents confirming ownership of property;

· copies of passports of the company’s founders and managers.

The application is reviewed within 10 working days, and after this period the tax authority makes a decision on registration or refusal of registration. In case of refusal of registration the reasons for such decision are indicated.

Reporting and tax payment

The reporting periods are quarter, half-year and year. The specific reporting period is set by the tax authority depending on the company’s turnover. The declaration is filled out electronically via the e-MTA portal. It specifies all transactions subject to taxation, as well as the amount of tax accrued and paid.

To sum up

Registration as a person liable for VAT is a mandatory procedure for all legal entities and sole proprietors conducting business activities in Estonia. The registration procedure includes filing an application, providing the necessary documents and receiving a decision from the tax authority.