How to Create Compliant Invoices: Essential Requirements for Estonian Company
This guide explores everything you need to know about creating compliant invoices in Estonia. We'll cover timing requirements, responsible parties, mandatory content, special invoice types, and electronic record keeping rules that keep your business operations legal and efficient. Let's ensure your invoicing practices meet all Estonian standards!
Mandatory Information Every Invoice Must Include
Estonian tax authorities require precise documentation for every business transaction. Compliance with Estonia's invoice content requirements ensures your documents are legally valid and acceptable for tax purposes.
Supplier and buyer details
Every Estonia-compliant invoice must clearly identify both parties involved in the transaction. For the supplier, the document must include:
Full name and complete address
Registration number as a taxable person
VAT identification number (if registered for VAT)
Similarly, for the buyer, you must include:
Complete name and address
Registration number as a taxable person when the buyer is a Legal entity
Valid European VAT number of the buyer, if you want to issue an invoice with 0% reverse charge VAT Rate. You can check the validity here
For intra-Community supplies, including the buyer's valid VAT registration number is essential since this qualification enables zero-rate taxation. Without this information, the transaction must be treated as domestic supply with standard VAT rates.
Invoice number and date
Proper identification and chronology of invoices form a critical component of Estonia's documentation requirements. Each invoice must contain:
First, a unique serial number that follows a logical sequence. Simple sequential numbering (1, 2, 3) can become confusing as your business grows. Hence, many companies adopt systematic numbering that might reference the year, client code, or project identifier followed by a sequential number.
Second, the date of issue must be clearly marked. This date starts the seven-day countdown for storage and reporting requirements.
Additionally, if the date of goods dispatch or service provision differs from the invoice issuance date, you must indicate this separate transaction date on the document. This distinction helps establish clear timelines for tax purposes and payment terms.
Description of goods or services
The Estonian VAT Act mandates detailed descriptions of the transaction's subject matter. Your invoice must specify:
Clear name or description of the goods or services provided
Precise quantity of goods or extent of services delivered
Unit price exclusive of VAT
Any discounts applied (if not already included in the unit price)
This information creates transparency regarding what exactly was purchased and at what cost, establishing a clear audit trail for both business partners and tax authorities.
VAT breakdown and total amount
The final critical component involves proper tax calculation and presentation. Estonia-compliant invoices must contain:
Taxable amount broken down by different VAT rates
Applicable VAT rates clearly indicated
Total VAT amount payable (expressed in euros)
Gross total amount of the invoice
For exempt supplies, the invoice must indicate the amount of supply exempt from tax. When different items on the same invoice qualify for different VAT treatments (standard rate, reduced rate, zero-rate, or exempt), each category must be clearly itemized with corresponding amounts.
Even if your Estonian company isn't VAT-registered, this section remains relevant—you should never add VAT to invoices, not even at 0% rate. Conversely, VAT-registered companies must always include VAT information, even when the applicable rate is 0%, along with a "tax clause" explaining the exemption basis.
Ultimately, these strict content requirements ensure Estonian invoices provide complete transaction records that support the country's taxation system while facilitating clear business communication between trading partners.
Who Must Issue the Invoice and When
Understanding who bears the legal responsibility for invoice issuance stands as a critical component of Estonia's strict financial documentation framework. The Estonian Value Added Tax Act clearly defines which parties must issue invoices and under what circumstances, establishing a structured system that supports the country's taxation processes.
Seller's responsibility
First and foremost, the Estonian VAT Act places the primary duty of invoice issuance on the seller. Any taxable person must issue an invoice for the transfer of goods or provision of services within the standard seven-day timeframe discussed previously. This obligation remains with the seller regardless of who physically generates the documentation.
The seller's responsibility extends to ensuring invoice compliance with all Estonian requirements, including proper VAT registration numbers, complete transaction details, and accurate tax calculations. Despite delegation possibilities, the legal accountability for timely and accurate invoicing never shifts from the seller.
In fact, for businesses engaged in regular transactions with the same client, the seller must maintain consistent invoicing practices that align with agreed-upon terms while still meeting all statutory requirements. This remains true even when dealing with foreign entities or complex transaction structures.
Third-party and self-billing options
Although the seller bears ultimate responsibility, Estonian regulations permit flexibility in who physically creates the invoice document. A taxable person may authorize another party to issue invoices on their behalf, functioning as an agent in the invoicing process. Nevertheless, the original seller maintains legal responsibility for ensuring these invoices meet all requirements and timing constraints.
Self-billing represents another permitted alternative, wherein the buyer of goods or recipient of services issues the invoice instead of the seller. However, this arrangement demands a formal foundation – both parties must establish a prior written agreement specifying how the seller will accept invoices generated by the purchaser.
When utilizing self-billing, the document must explicitly include the phrase "self-billing" to distinguish it from standard invoices. Above all, both parties must recognize that self-billing arrangements don't diminish the seller's legal obligations regarding invoice issuance and record-keeping.
Special Invoice Types and Exceptions
Estonia provides flexibility in its invoicing system through several special invoice types and exceptions that accommodate different business scenarios. Understanding these variations helps businesses maintain compliance without unnecessary administrative burden.
Invoices for tax-exempt supplies
Under Estonian regulations, businesses need not issue invoices for tax-exempt supplies specified in the Value-Added Tax Act. This exemption typically applies to certain goods and services of social nature that fall outside the VAT system.
Estonia currently maintains four different VAT rates: 22%, 13%, 9%, and 0%. For transactions qualifying for exemption, no invoice is necessary unless specifically requested by the customer. This primarily applies when transferring goods or providing services to individuals for personal use.
Notably, taxable persons retain the option to voluntarily add VAT to otherwise tax-exempt goods and services. Whenever exercising this option, businesses must notify the Estonian Tax and Customs Board in writing before proceeding with the supply.
Intra-community supply invoices
For businesses engaged in cross-border EU trade, special invoicing requirements apply to intra-Community supplies. Such transactions can only qualify for zero-rate taxation when:
The seller verifies the buyer is registered as a taxable person in another EU member state
Both seller and buyer VAT numbers appear on the invoice
Goods physically move from Estonia to another EU member state
The invoice references Article 138 of Council Directive 2006/112/EU or the corresponding Estonian VAT Act provision
Beyond standard invoice requirements, intra-Community supply invoices must clearly indicate the transaction's cross-border nature. This reference can be explicit or replaced with "another clear and unambiguous notation" such as "triangular transaction" or "sale of a new means of transport".
Additionally, proper documentation proving goods transportation to another member state remains essential for verifying the legitimacy of intra-Community supplies.
Recordkeeping Rules
Estonia's digital innovation extends into its approach to electronic invoicing, creating a framework that balances flexibility with progressive adoption requirements. As businesses navigate these rules, understanding current obligations and upcoming changes proves essential for compliance.
When e-invoicing is allowed or required
Currently, electronic invoicing operates under a dual system in Estonia. For Business-to-Government (B2G) transactions, e-invoicing has been mandatory since 2019 following amendments to the Accounting Act. Meanwhile, Business-to-Business (B2B) electronic invoicing remains voluntary but increasingly encouraged.
This landscape will shift significantly starting July 1, 2025, when all businesses registered as e-invoice receivers in the Commercial Register will gain the right to request e-invoices from their suppliers. This change represents a unique approach where buyers, rather than sellers, drive e-invoice adoption.
Looking further ahead, Estonia plans to introduce fully mandatory B2B e-invoicing, potentially beginning in 2027. This gradual transition provides businesses time to adapt their systems accordingly.
Storage duration and access requirements
Estonian regulations mandate that all invoices, including electronic ones, must be stored for seven years from January of the year following issuance. This requirement applies regardless of format or storage location.
Importantly, while archiving invoices outside Estonia is permitted, businesses must ensure they can provide "fastest possible submission" of these documents when requested by tax authorities. Electronic invoices remain subject to the same retention requirements as paper documents, with tax authorities maintaining the right to access electronically stored invoices upon request.
Acceptable formats and buyer consent
Estonia currently recognizes two primary electronic invoice formats: the Estonian e-invoice standard (national XML-format) and the European e-invoice standard (EN 16931). From July 2025, if no specific format is agreed upon between parties, the European standard will become the default format.
For B2B transactions, the buyer's explicit consent remains mandatory for e-invoice receipt. Nonetheless, no electronic signature is required for e-invoices in Estonia, simplifying the technical implementation.
The Estonian government supports a decentralized approach to e-invoicing, permitting multiple private service providers to facilitate these transactions rather than mandating a single central platform. This approach offers businesses flexibility in choosing solutions that best fit their operational needs.
