If the taxable annual turnover of your company exceeds 40,000 euros, you are required to register the company with the Tax and Customs Board as a person liable to VAT. If the turnover is below that limit, registration is not required.

Since 2025, the following is included in 40 000 euro limit:

• taxable supply of goods and services, including 0 per cent taxable supply, except the transfer of fixed assets;
• supply of real estate transactions, except the transfer of fixed assets and occasional transactions;
• supply of insurance services and financial services, except occasional services.

The registration obligation does not arise in case all the taxable supply of the person is tax-free supply and the supply taxable at the 0 per cent value added tax rate, except intra-Community supply of goods.

To register as a person liable to VAT, submit a written application to the Tax and Customs Board either in e-MTA (the e-services environment of the Estonian Tax and Customs Board), a service bureau of the Estonian Tax and Customs Board, or the e-Business Register.

More information is available on the website of the Tax and Customs Board: Registration as a VAT payer.

There is no obligation to register as a person liable to VAT if the entire turnover of the person is taxed at a zero rate and the turnover does not include:

• intra-Community turnover from the goods nor
• services supplied to taxable persons in other Member States where the turnover is deemed to have been incurred in the Member State of the recipient.

An application for registering as a person liable to VAT that has already been submitted cannot be amended. If it is necessary to change the starting date of the registration obligation indicated in the application to an earlier date, a new application must be submitted.

The VAT number is unique and you cannot transfer your VAT liability and VAT number to another person (e.g. to a legal successor). However, if a VAT group is formed, all members of the group will use the VAT number of the representative of the group.

Verification of the EU VAT registration number

From 1 January 2025, a special scheme for small enterprises was introduced, allowing small enterprises from other Member States to use a 40, 000 euro VAT-free treshold in Estonia, if their total supply in the European Union does not exceed 100,000 euros. It also gives Estonian small enterprises the opportunity to use tax exemption until the threshold is reached in other countries where they operate.

More information is available on the website of the Estonian Tax and Customs Board: “Special scheme for small enterprises”. 

Companies that have an annual turnover of below 40,000 euros should still register as a VAT payer if they plan to buy costly fixed assets or raw materials for manufacturing products or providing services (computers, equipment, production lines etc). Registering as a VAT payer gives you the right to receive from the state refunds of input VAT paid on goods and services. The amount of input VAT depends on the amount in which you bought the goods and services and the nature of the purchases. In such a case, you would have to substantiate that you are engaged in business in Estonia or are going into business in Estonia.

As a person liable to VAT, you are required to:

• add VAT to the sales price when selling goods or providing a service;
• keep VAT accounts;
• calculate and pay the VAT amount;
• retain documents related to transactions and to present invoices that comply with the requirements.

You may deduct from taxable supply the VAT paid upon acquiring goods or services used for taxable supply (input VAT).

More information on the obligations of taxable persons can be found on the website of the Estonian Tax and Customs Board.

Since 01.07.2025, the standard rate of value added tax is 24%.

Some goods and services (e.g. books, medicines, medical devices for people with disabilities, paper and electronic press publications) have a 9% VAT rate. The exact list can be found in subsection 2 of § 15 of the Value Added Tax Act.

The VAT rate for accommodation services is 13% as of 1 January 2025.

The list of goods and services taxed at the 0% rate of VAT is set out in subsections 3 and 4 of § 15 of the Value Added Tax Act.

The list of goods and services exempt from tax is set out in § 16 of the Value Added Tax Act.

The taxation period for VAT is a calendar month. A VAT return and its annex must be submitted to the Estonian Tax and Customs Board and the tax must be paid by the 20th day of the month following the taxation period.

On the basis of a reasoned request by the taxable person, the Tax and Customs Board may also establish a tax period longer than a calendar month, starting on the first day of the calendar month or the first taxation period and ending on the last day of a subsequent calendar month. You can apply for a taxation period longer than a calendar month, regardless of the size of your turnover. In this case, the VAT return must also be submitted by the 20th day of the month following the taxation period.

You can submit the return electronically in the e-MTA e-services environment where data can be entered manually or uploaded from a file in XML or CSV format. VAT returns can also be submitted via data exchange layer X-tee.

If you have been a taxable person for at least 12 months, you must submit your VAT return electronically.

More information is available on the website of the Tax and Customs Board: Filing VAT returns.

VAT return forms on the website of the Tax and Customs Board

As a sole proprietor, you must pay VAT if you are registered as a person liable to VAT. Similarly to companies, you will be obliged to register when your turnover exceeds 40,000 euros a year.

The VAT rates are the same for sole proprietors as they are for companies.

If you use the cash method of accounting and your taxable turnover for the calendar year does not exceed 200,000 euros, you are entitled to use the cash method of accounting for VAT. The Tax and Customs Board must be informed thereof beforehand either when registering as a person liable to VAT or when switching from the accrual method of accounting to the cash method of accounting. Learn more: Special arrangements for cash accounting for VAT.

More information is available on the website of the Tax and Customs Board: Sole proprietor and value added tax.

If the VAT accounted for in the taxation period is below the amount of input VAT deductible by the taxable person in the same taxation period, the overpaid VAT is refunded to the taxable person in accordance with the procedure laid down in the Taxation Act.

More information is available on the website of the Tax and Customs Board: Refund of overpaid VAT to Estonian taxable persons.