VAT Information Notice
VAT rates and thresholds shown are based on EU regulations and may change. Rates are subject to change by member states. This is general information only - consult a VAT specialist or your accountant for compliance advice. Information current as of January 2025.
VAT Registration Quick Guide
Do you need to register?
Often Don't Need VAT
- ✓ B2B services to EU businesses (reverse charge)
- ✓ Services to non-EU clients
- ✓ Below €40,000 Estonian revenue
- ✓ Using merchant of record (Paddle, etc.)
Usually Need VAT
- ⚠ B2C digital services to EU consumers
- ⚠ E-commerce shipping to EU consumers
- ⚠ Over €40,000 Estonian taxable revenue
- ⚠ Want to reclaim VAT on expenses
When VAT Registration is Mandatory
€40,000 Threshold
You must register for VAT when your taxable supplies in Estonia exceed €40,000 in a calendar year (or will exceed within 12 months).
What counts toward threshold:
- Sales to Estonian customers (B2B and B2C)
- Some intra-EU supplies depending on structure
What doesn't count:
- B2B exports to other EU countries (reverse charge)
- Sales to non-EU countries
Intra-EU Goods Acquisition
If you acquire goods from other EU countries worth more than €10,000 annually, you must register to handle acquisition VAT.
Receiving Services from Abroad
If you receive B2B services from other countries (software subscriptions, marketing services, etc.), you may need to register to reverse charge the VAT — though in practice this is often handled differently for non-VAT-registered entities.
When to Register Voluntarily
Even if you're below thresholds, VAT registration can be beneficial:
Reclaim VAT on Expenses
If you have significant business expenses with VAT (software, equipment, services), registration lets you reclaim that VAT. 22% back on qualifying expenses.
B2B Credibility
Some larger clients expect their suppliers to be VAT registered. It can signal a more established business.
Simpler Cross-Border B2B
With a VAT number, intra-EU B2B transactions become cleaner. Clients can verify your number in VIES and confidently use reverse charge.
Registration Process
VAT registration in Estonia is handled through the Tax Authority (EMTA). With Xolo, they manage the process:
Submit Application
Application submitted to EMTA with company details, business description, and expected turnover.
Review Period
EMTA reviews application, may ask questions about business activities. Typically takes 1-2 weeks.
VAT Number Issued
You receive your Estonian VAT number (format: EE + 9 digits). Appears in VIES database.
Start Filing Returns
Monthly VAT returns due by 20th of following month. Xolo handles filing as part of accounting service.
Ongoing VAT Obligations
Monthly Returns
VAT returns filed monthly, due by 20th of following month.
- • Report output VAT (charged to customers)
- • Report input VAT (paid on expenses)
- • Pay net VAT or receive refund
Record Keeping
Keep proper records for all VAT-related transactions.
- • Sales invoices with correct VAT
- • Purchase invoices for input VAT claims
- • Records of EU customer VAT numbers
Intra-EU Reporting
Additional reporting for EU cross-border transactions.
- • EC Sales List for B2B EU sales
- • Intrastat for goods movements
Correct Invoicing
Invoices must show correct VAT treatment.
- • Your VAT number on all invoices
- • Customer VAT number for B2B EU
- • Reverse charge notation when applicable
VAT Rates in Estonia
Most goods and services
Books, periodicals, accommodation
Exports, intra-EU B2B goods
Frequently Asked Questions
Everything you need to know before getting started
All information verified as of December 2025. Prices and features subject to change. Always verify current pricing with providers.
