What are the VAT rates?
The standard Estonian VAT rate in 2026 is 24%, in force since 1 July 2025. There are reduced rates of 13% and 9%, and a 0% rate for intra-Community supplies and exports. Intra-Community supplies are sales of goods to VAT-registered businesses in other EU countries.
- 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, if you hold the required evidence.
The VAT registration threshold: when registration becomes compulsory
The Estonia VAT registration threshold in 2026 is 40,000 EUR (€40,000) of taxable turnover in a calendar year. You must apply within three working days of crossing it. The obligation starts when you cross the threshold, not at the end of the year.
In some situations you must register whatever your turnover. Examples are certain purchases of goods from other member states, and services bought from abroad where the reverse charge applies (explained below).
You can also register voluntarily below the threshold, and this often makes sense. If your customers are businesses that can reclaim VAT, the VAT you charge costs them nothing. You can also recover input VAT, which is the VAT on your own purchases. If your customers are consumers, though, registering early makes you 24% more expensive overnight.
If you would rather we did it, our VAT registration and returns service starts from 90 EUR.
The filing cycle
The Estonian VAT return (KMD) is filed monthly and is due by the 20th day of the following month. In plain terms: every month you tell the tax office how much VAT you charged and how much you paid, and you settle the difference. The KMD INF annex and the tax payment are due on the same day.
The KMD INF is an annex that lists transactions above a threshold with other Estonian VAT-registered businesses. The Estonian Tax and Customs Board (the Tax Board) matches it against your counterparties' returns. If the figures do not match, expect a question from the Tax Board.
Intra-EU supplies and the VD report
Zero-rating means charging 0% VAT. To zero-rate a sale of goods to a VAT-registered business in another member state, you need two things. You need the customer's valid VAT number, checked at the time of the sale, and proof that the goods left Estonia. Sales of goods and services to these businesses also go on the VD report. This is a separate report that lists your sales to VAT-registered customers in other EU countries.
Reverse charge
Under the reverse charge, an Estonian company that buys services from a supplier in another country accounts for the VAT itself. It declares the VAT as output tax (VAT it owes) and, if it has full deduction rights, reclaims the same amount as input tax. For such a company the two amounts cancel out, but both still have to appear on the return.
The place of supply usually moves to Estonia. This item is easy to miss, so check every foreign invoice. Cloud software, advertising platforms, contractor invoices and marketplace fees usually fall under it.
The EU small business scheme
The EU small business scheme lets businesses with annual EU turnover under €100,000 use a member state's small business exemption across borders, instead of registering in each country. It has applied since 2025. Whether it helps you depends on who your customers are and where you sell.
Common VAT mistakes to avoid
The most common Estonian VAT mistakes are invalid input VAT claims, a missing reverse charge, and late registration after passing the 40,000 EUR threshold.
- Input VAT reclaimed on invoices that do not meet the formal requirements, for example with no VAT number, the wrong company name or no invoice date.
- Reverse charge on foreign services left out completely.
- Zero-rating an intra-Community supply without checking that the customer's VAT number was valid on the date of supply.
- VAT reclaimed on entertainment and other costs where deduction is restricted.
- Late registration after passing the threshold, which makes the company liable for the VAT it should have charged.
Looking ahead
Estonian VAT rules stay the same in 2026, but changes to the structure of the VAT return are expected in 2027. If you are choosing accounting software this year, check that the vendor is preparing for them.
Frequently asked questions
What is the Estonia VAT registration threshold in 2026?
40,000 EUR of taxable turnover in a calendar year. You must apply for registration within three working days of crossing it.
What happens if I cross the 40,000 EUR VAT threshold in Estonia?
You must apply for VAT registration within three working days of crossing the threshold. If you register late, the company becomes liable for the VAT it should have charged.
Can I register for VAT in Estonia before reaching the threshold?
Yes. You can register voluntarily below the threshold, and this often makes sense when your customers are businesses that can reclaim VAT. If your customers are consumers, registering early makes you 24% more expensive overnight.
Do I have to register for VAT in Estonia below the threshold?
Sometimes. You must register whatever your turnover for certain acquisitions of goods from other member states, and when you receive services from abroad that fall under the reverse charge.
What is the VAT rate in Estonia in 2026?
The standard rate is 24%, unchanged since 1 July 2025. The reduced rates are 13% for accommodation and 9% for books, periodicals and certain medicines.
When is the Estonian VAT return due?
By the 20th day of the month after the taxable period, together with the KMD INF annex.
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