Value-Added Tax (VAT) in Estonia

Value-added tax (VAT) is a consumption tax applied to the sale of goods and services in business, the import of goods from non-EU countries, the acquisition of goods from EU countries, and services received from abroad. While businesses handle VAT collection and payment, the tax is ultimately paid by the final consumer.

VAT for companies

📌 VAT Registration Requirements

When must you register?

You must register as a VAT liable person if your taxable turnover in the last 12 months exceeds €40,000.

What is included in the €40,000 threshold?

• Taxable supply of goods and services (including at 0% rate), excluding transfer of fixed assets;
• Supply of real estate (excluding occasional and fixed asset transfers);
• Supply of insurance and financial services (excluding occasional services).

When registration is not required:

• If your turnover consists only of VAT-exempt supplies and 0% rated supplies, except intra-Community supply of goods;
• If you provide cross-border B2B services that are taxed in the recipient’s country.

How to register

You can apply through one of the following:

• e-MTA portal (Tax and Customs Board e-services);
• A service bureau of the Tax and Customs Board;
• e-Business Register.

📋 Obligations of a VAT-Registered Person

Once registered, you are required to:

• Charge VAT on all taxable sales of goods and services;
• Keep VAT records and accounts;
• Calculate and pay VAT monthly;
• Retain transaction documents and issue VAT-compliant invoices;
• Deduct input VAT paid on purchases used for taxable activities.

 

💶 VAT Rates in Estonia

VAT Rate	Description	Examples
24% (from 01.07.2025)	Standard rate	Most goods and services
22% (until 30.06.2025)	Previous standard rate	—
9%	Reduced rate	Books, medicines, press, disability aids
13% (from 01.01.2025)	Accommodation	Hotel and short-term stay services
0%	Zero-rated supplies	Export, international transport, intra-EU supply
Exempt	VAT-exempt	Financial services, insurance, education, healthcare

Refer to:

• §15 (2–4) of the VAT Act – for reduced and 0% rates
• §16 of the VAT Act – for exempt supplies

 

📆 Declaring and Paying VAT

Standard tax period

• Calendar month

VAT return and payment deadline

• By the 20th day of the month following the tax period

How to file:

• Electronically via e-MTA:
  • Manual entry
  • Upload XML or CSV
• Via X-tee data exchange layer (for integrated systems)

Longer tax period

Upon written request, a business can use a longer tax period (e.g. quarterly), regardless of turnover. Returns are still due by the 20th day of the month following the period.

📌 If you've been VAT-registered for at least 12 months, e-filing is mandatory.

More info: Filing VAT returns

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VAT for Sole Proprietors

Registration

Same threshold and rules as for companies: €40,000 turnover per year.

Tax rates

Sole proprietors use the same VAT rates as companies (24%, 13%, 9%, 0%, exempt).

Cash-based VAT accounting

If your annual turnover is under €200,000, you can apply cash-based VAT accounting — meaning VAT is declared and paid only when income is actually received.

To use this, you must:

• Notify the Tax and Customs Board when registering or when switching from accrual-based accounting.

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VAT Refunds

Input VAT refund (domestic)

If input VAT (paid) exceeds output VAT (charged) during a tax period, the difference is refunded according to the Taxation Act.

Refund of VAT paid in other EU countries

If your business paid VAT in another Member State:

• File the refund claim via e-MTA;
• MTA forwards the request to the relevant foreign tax authority;
• The decision and refund process are handled by the other country's tax authority.
  
  

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Special VAT Schemes for distance sales: OSS & IOSS

OSS – One Stop Shop

For:

• Cross-border distance sales (B2C) within the EU;
• Services provided to end consumers in other EU countries.

Benefits:

• You declare and pay VAT in one country (e.g. Estonia);
• No need to register for VAT in every EU country you sell to;
• OSS return is submitted quarterly.

IOSS – Import One Stop Shop

For:

• Distance sales of goods from outside the EU to EU consumers;
• Goods valued under €150, excluding excise goods.

Benefits:

• VAT is collected at the time of sale;
• The buyer avoids import VAT charges upon delivery;
• The seller declares VAT monthly via IOSS return.

More info: OSS and IOSS special schemes

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Special VAT Scheme for Small Businesses (from 2025)

From 1 January 2025, a new EU-wide scheme allows:

• Non-Estonian EU small businesses to apply the €40,000 exemption in Estonia, provided their total EU turnover is under €100,000;
• Estonian small businesses to apply a VAT exemption in other EU countries they operate in, until reaching the relevant threshold there.