VAT Estonia Guide

Read our guide and find out all you need to know about VAT in Estonia, from registration to filing, and more.

As with other countries, Estonia has its own set of VAT (Value Added Tax) regulations that are crucial for businesses operating within its borders. This guide provides an in-depth look at the Estonian VAT system, outlining VAT rates, registration necessities, and other key details.

What is the Estonia VAT rate?

In Estonia, VAT, or Käibemaks (KM) as it's locally known, is a fundamental component of the country's fiscal system. The standard Estonia VAT rate is 22%, with a reduced rate of 9% and a zero VAT rate for certain goods and services.

Type of VAT	VAT Rate	Applicable Goods/Services
Standard VAT	22%	All other taxable goods and services.
Reduced VAT rate (1)	9%	Includes certain pharmaceutical products, medical equipment for the disabled, hotel accommodation, books (except e-books), and newspapers and periodicals.
Zero rate VAT	0%	Intra-community and international passenger transport.

Registering for VAT in Estonia

Both local and foreign businesses engaged in taxable activities within Estonia are required to register for VAT. The registration threshold for local businesses is €40,000, whereas foreign businesses must register for Estonia VAT regardless of their turnover.

For EU-wide cross-border ecommerce, the distance-selling threshold is €10,000. If a business exceeds this amount in annual sales to Estonian customers, VAT registration becomes mandatory. Registration is also required for businesses storing goods in Estonia or using fulfillment services like Amazon's FBA (Fulfilled-by-Amazon).

Businesses should apply to the Estonian Tax and Customs Board to register for VAT and receive an Estonia VAT number. The registration process usually takes no more than a week to complete from the time of submitting your application.

Fiscal representation in Estonia

Estonia requires non-EU businesses to appoint a fiscal representative for VAT registration. This representative is responsible for ensuring VAT compliance on behalf of the non-resident company.

Estonia VAT Return filing and penalties

Estonia VAT returns must be filed monthly, regardless of the company's sales volume. Returns should be submitted electronically (recommended but not compulsory) via the Estonian Tax and Customs Board’s portal by the 20th of the month following the reporting period.

Penalties for late submission of an Estonian VAT return can reach up to €32,000. Late payment of VAT will incur daily interest of 0.06%.

Estonian Intrastat declarations

Businesses trading within the EU that exceed annual thresholds of €400,000 for arrivals and €270,000 for dispatches must submit Intrastat declarations. These are due by the 10th of the following month. Late filings or inaccuracies may result in fines of up to €2,000.

Reverse charge in Estonia

The reverse charge mechanism in Estonia is applied to specific transactions, including services from non-residents, intra-community acquisitions, and certain domestic supplies. This mechanism transfers the responsibility of VAT reporting and payment from the supplier to the recipient.