This guide provides an overview of VAT in Estonia, including applicable rates, registration requirements, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Estonia.
Estonia was an early mover in taxing the digital economy, applying VAT to e-services from abroad.
Foreign businesses incurring expenses in Estonia? You might be eligible for a VAT refund.
Doing business in Estonia? You’ll need to play by the VAT Act rules.
Registration is required only once your business exceeds the threshold in Estonia.
Estonia applies VAT on digital services based on the consumer’s location, generally utilizing the OSS system for EU cross-border services.
The VAT Act governs how VAT is applied in Estonia, including rules on taxable transactions, invoicing, exemptions, and compliance. While most foreign businesses claiming a VAT refund are not required to undergo VAT registration in Estonia or submit VAT returns in Estonia, those that carry out taxable activities above the threshold may be obligated to register and obtain an Estonia VAT number.
Only businesses with Estonia VAT registration and an Estonia VAT number can file VAT returns electronically via the e-MTA portal. Foreign businesses claiming VAT refunds under the 8th or 13th Directive do not file VAT returns in Estonia unless required to register due to local taxable activities. Refund claims are submitted separately but must follow the Estonian VAT rules.
Businesses registered for Estonian VAT can reclaim input VAT related to taxable or zero-rated supplies.
Foreign businesses can reclaim Estonian VAT through:
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