The rates
- Standard rate: 24%, in force since 1 July 2025 and unchanged for 2026.
- 13%: accommodation services.
- 9%: books, periodicals and certain medicines.
- 0%: intra-Community supplies of goods and exports, subject to holding the required evidence.
When registration becomes compulsory
Registration is required once taxable turnover exceeds €40,000 in a calendar year. The obligation arises when the threshold is crossed, not at the end of the year, and the application must be made within three working days of that point.
There are also situations where registration is required regardless of turnover - for instance certain acquisitions of goods from other member states, and receiving services from abroad where the reverse charge applies.
Voluntary registration below the threshold is possible and often sensible: if your customers are businesses that can reclaim VAT, charging it costs them nothing while letting you recover input VAT on your own purchases. If your customers are consumers, registering early makes you 24% more expensive overnight.
The filing cycle
The taxable period is the calendar month. The VAT return (KMD) and its annex (KMD INF) are both due by the 20th day of the following month, and the tax is payable by the same date. The KMD INF lists transactions with other Estonian VAT-registered parties above a threshold and is cross-matched by the Tax Board against your counterparties' returns - a mismatch generates a query.
Intra-EU supplies and the VD report
Supplies of goods and services to VAT-registered businesses in other member states are additionally reported on the VD report. Zero-rating an intra-Community supply requires the customer's valid VAT number, verified at the time of supply, and evidence that the goods actually left Estonia.
Reverse charge
When your Estonian company buys services from a supplier in another country, the place of supply usually shifts to Estonia and you account for the VAT yourself - declaring it as output tax and, where you have full deduction rights, reclaiming the same amount as input tax. This is the single most commonly missed item in the returns we take over. Cloud software, advertising platforms, contractor invoices and marketplace fees all typically fall into it.
The EU small business scheme
Since 2025 an EU-wide scheme allows small enterprises with annual EU turnover under €100,000 to apply a member state's small business exemption across borders, rather than registering in each country. Whether it helps depends on your customer mix and where you sell.
Common mistakes we correct
- Input VAT reclaimed on invoices that do not meet the formal requirements - missing VAT number, wrong company name, no invoice date.
- Reverse charge on foreign services omitted entirely.
- Zero-rating an intra-Community supply without checking the customer's VAT number was valid on the date of supply.
- VAT reclaimed on entertainment and other costs where deduction is restricted.
- Registration delayed past the threshold, which makes the company liable for the VAT it should have charged.
Looking ahead
Changes to the structure of the VAT return are expected in 2027. Nothing changes for 2026, but if you are choosing accounting software this year it is worth checking that the vendor is preparing for it.
Frequently asked questions
What is the VAT rate in Estonia in 2026?
24% standard, unchanged since 1 July 2025. Reduced rates of 13% apply to accommodation and 9% to books, periodicals and certain medicines.
What is the VAT registration threshold?
€40,000 of taxable turnover in a calendar year. Registration must be applied for within three working days of crossing it.
When is the Estonian VAT return due?
By the 20th day of the month following the taxable period, together with the KMD INF annex.
General information, not tax advice
This article reflects Estonian law as it stands on the date shown. Rules change and individual circumstances differ - confirm your own position with us before acting.