Country Guide: Estonia


Looking to expand your e-commerce business to Estonia, then look no further, here is AVASK's guide to VAT in Estonia:

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Country Profile: Estonia

Estonia E-commerce facts:

Population 1.33 million
(January 2020)
Currency: Euro (€)
Number of e-commerce users: 0.9 million
(January 2020)
Revenue in e-commerce market: £302 million
Estimated market growth: 7.6% to £405 million by 2024

Estonia thresholds and additional summary:

Distance Selling Threshold (DST) €35,000
Intrastat Thresholds:

Dispatches:
€130,000

Arrivals:
€200,000

VAT number format: EE 123456789
VAT return period:
Monthly
VAT return deadline 20th day of the month following period end
Annual VAT filing deadline: Not required
EC sales lists reporting Monthly

VAT in Estonia

Estonia is a member of the European Union (EU) and draws up its tax rules according to the laws or directives issued from Brussels by the EU. The current VAT directive applies to all 27 member states of the European Union, and it governs the rules on VAT compliance, and in some part, covers the setting of VAT rates.

As an EU member state, Estonia is obliged to implement the VAT directives, which provides guidance on VAT. Where there is a conflict, the European Union’s directive takes precedence. Estonia is a member of the European single market economy and uses the Euro (€) for its currency. In Estonia VAT is known as: Käibemaks, or Km.


VAT registration in Estonia

Both EU and non-EU businesses may trade in Estonia without establishing a local presence. This is known as non-resident VAT trading. There is no VAT threshold in Estonia for the registration of non-resident traders, but you will need one to record transactions and your Estonian customers will want proof that you have obtained one.

There are strict rules on the situations where VAT registration is permitted. Common scenarios that require Estonia VAT registration include:

  • Importing goods into Estonia;
  • Organising live events, conferences, etc. in Estonia;
  • Holding goods in a warehouse in Estonia as stock for resale;
  • Buying goods within Estonia that are subsequently re-sold in-country;
  • Selling goods from Estonia to other EU member states;
  • Distance-selling to private individuals in Estonia, e.g. internet retailing or trading through an e-commerce platform.

Registering for Estonian VAT generally takes around a week once all documentation has been submitted to the tax authority, but this varies from seller to seller and will depend on the specifics of an individual company.

Estonian VAT compliance

There are detailed rules controlling the recording and processing of Estonian transactions for VAT purposes. This includes guidelines on:

  • Estonia invoice requirements;
  • When to issue an Estonia tax invoice;
  • Foreign currency reporting;
  • Credit notes and corrections;
  • Correcting entries from prior returns;
  • Which accounting records must be maintained.

Estonia VAT rates

VAT Rate % Rate
Standard Rate 20%
Reduced Rate 9%
Zero Rate 0%

Read more about International VAT and Compliance:

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