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Enty Shorts: 5 Easy Rules for VAT Invoicing in Estonia

July 14, 2022 · 1 min read

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Yo! This is our short about VAT requirements to invoice in Estonia. Just open this memo next time you are stuck on the ‘VAT row’ in the invoice.

Rule 0.

If your company doesn't have VAT yet, don't worry about the VAT row in invoices. Always put ‘None’.

Estonian company is not required to have a VAT number. Check whether your company needs a VAT here. By the way, obtaining VAT usually indicates your business is growing. Next, we examine the rules for companies with a VAT number.

Rule 1.

If your client is from Estonia, the standard VAT rate for common goods and services will be 22%. Lower VAT long-list. Automated check.

Rule 2.

If your client is not from Estonia, the VAT rate depends on the type of products that you provide. There are detailed tables both for goods and services, but there’s also a big risk to be buried in all their rules.

That’s probably a good idea to consult once with a professional accountant and clearly determine your type of goods or services.

Rule 3.

If for any reason a VAT rate is NOT 22%, then it is required to explain why it is not 22% in the invoice. That is you should refer to a clause. As a rule, you refer to one of the two:

  1. If you sell something to a company from the EU and it has a VAT number, the VAT rate will be 0% due to the ‘reverse charge’ clause;
  2. If you sell something outside the EU, the VAT rate will be 0% for the reason (clause) - Article 146 of the EU VAT Directive.

Rule 4.

If you create VAT invoices, i.e. your company is registered for VAT, then you should file declarations every month. The deadline is the 20th day of the following month. You also have to pay taxes every month.

Rule 5.

If you have a complex scheme for using VAT, for example, when 2+ countries are involved, then look at OSS and IOSS schemes. By all means, it fits perfectly for e-commerce companies.
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