Estonia VAT Registration and Filing Guide

Estonia’s VAT registration process involves applying for a VAT number to collect and remit VAT on taxable goods and services. Here’s a step-by-step guide to help you understand the process, requirements, and timelines for VAT registration in Estonia. 

When is VAT Registration Required?

  • Mandatory Registration: You are required to register for VAT in Estonia if your taxable turnover exceeds €40,000 within the past 12 months. This is the threshold for VAT registration.
  • Voluntary Registration: If your turnover is below the threshold, you can still choose to voluntarily register for VAT if you wish to reclaim VAT on your business expenses or engage in business with other VAT-registered companies.

Documents and Requirements for VAT Registration:

When applying for VAT registration, you will typically need the following documents:

  • Completed VAT registration application.
  • Proof of business activity
  • Identification documents: Passport or ID card for individuals.
  • For foreign businesses: If you’re a non-resident, you may need a Power of Attorney if appointing a local representative.
  • For companies: Proof of the company’s incorporation and registered address.

VAT Registration Timeline:

  • For Estonian Residents:
    • The process generally takes 5-7 business days. However, this can vary depending on the completeness of your application.
  • For Non-Residents:
    • If you are a foreign business, the process can take a bit longer, usually between 2 to 3 weeks. This is because additional documentation and verification may be required.

VAT Number and Obligations:

After your application is processed and approved, you will receive a VAT number. This number must be included on all invoices and other business documentation related to taxable transactions. Additionally:

  • You must submit regular VAT returns (monthly or quarterly, depending on the size of your business).
  • You are required to keep accurate records of your sales, purchases, and VAT transactions.
  • Ensure timely payment of VAT to the Estonian Tax and Customs Board.

Exemptions and Special Cases:

  • Some businesses may be eligible for VAT exemptions or special VAT schemes (e.g., small business exemptions or simplified VAT regimes for certain sectors). It is important to verify if your business qualifies for any of these exemptions.

Tax Representation (for Non-Residents):

If you are a non-resident business and do not have a registered address in Estonia, you may be required to appoint a tax representative in Estonia to handle VAT matters on your behalf. The representative will manage VAT filings and communication with the Estonian Tax and Customs Board.

VAT Rates in Estonia:

  • The standard VAT rate in Estonia is 20%.
  • A reduced VAT rate of 9% applies to certain goods and services, including books, medicines, and certain cultural events.
  • Some goods and services are exempt from VAT, such as health services and educational services.

VAT Returns:

Once registered, you will need to file regular VAT returns, either monthly or quarterly, depending on your turnover.

When is VAT Deregistration Required?

Estonia VAT Deregistration refers to the process of removing your business from the VAT register once you no longer meet the requirements for VAT registration or no longer wish to remain VAT-registered. Deregistration is typically necessary if your taxable turnover falls below the required threshold or if you cease business operations.