Corruption as low as in the United States

E-Government services as good as in Switzerland

State finances as stable as in Germany

International trade as efficient as in Hongkong

Corporate income tax as low as in Panama

0% corporate income tax on retained and reinvested profits

VAT registration

An Estonian company is required to register with the Tax and Customs Board as a VAT payer if the annual taxable turnover exceeds 16 000 euros (40 000 euros starting from 1st January 2018).  The tax authority shall register a company as a taxable person as at the date the registration obligation arose, within three working days as of the receipt of the application. However, if there are no business transactions related to the Estonian VAT number during 2 – 3 months, then, as a rule, the tax authorities will inspect if it is justified to keep the VAT ID effective.

In Spring 2016, the Estonian government decided to raise the turnover threshold for VAT registration to 40 000 euros to simplify doing business in Estonia. The new threshold will be applied starting January 1st 2018.

Voluntary VAT registration

If the turnover is less than 16 000 euros (40 000 euros starting from 1st January 2018)  per calendar year, registration is not obligatory, but one may submit an application for registration voluntarily. In order to be registered, the company must maintain proof of the fact that it is engaged in business in Estonia or is about to commence business in Estonia (business plan, business partners, agreements, etc.). To justify it you must demonstrate that your Estonian company is in some way contributing into Estonia either by buying something from Estonia, selling something in Estonia or paying a salary which is taxed in Estonia. The success of the VAT registration mostly depends on the particulars of the client itself and its business.

VAT rates and VAT-related obligations

The general VAT rate is 20%. The reduced rate is 9% and 0% in some cases. The taxable period is one calendar month and as a VAT payer, you need to calculate and pay the VAT amount to the tax authority by the 20th day of the month following the taxable period.

As a VAT payer, you are required to add VAT to the sales price when providing service or selling goods; keep accounting for VAT and retain related documents.

VAT registration service

We have broad knowledge and lots of experience with VAT registration. Our fee for VAT registration service includes:

  • provision of the VAT application form and assistance with its completion
  • support and advice during the VAT registration process.

Please be reminded that the Tax and Customs Board has the right to reject any application if the process is not satisfactory, hence we require the payment of the fee in advance, and the fee is not refundable under this circumstance.

Please note that by requesting VAT registration service, the arrangement with our firm for accounting services is mandatory. See more: Accounting and tax compliance services.

For more information about or VAT registration service, please email us at info@incorporate.ee or contact us here.

VAT_registration.jpg