VAT in Estonia
VAT in EstoniaUpdated on Monday 04th May 2020
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In Estonia, the VAT tax is applied to supplies of goods and services to both individual persons and companies running a business. Estonia has signed tax treaties with over 50 countries in order to avoid double taxation.
VAT rates in Estonia
The Estonian VAT standard rate is 20%, but there is also a reduced 9% rate that applies to certain goods and services that includes books and learning materials, medicines and medical equipment, accommodation services,sanitary and toiletry products.
The zero VAT rate applies to exports, intra-community supply of goods, international passenger services, goods and services supplied on board of ships and airplane, delivery of goods, services for diplomatic and consular missions, international organizations, institutions of the European Union and NATO, goods located in free zones, services supplied to other countries, cross-border services.
There are also goods and services exempted from VAT payment like transactions of securities and financial services, insurances, postal, health and social services, but also child protection services. Property rentals, lottery, betting, gambling, education and transportation of sick people are also exempted from VAT payment in Estonia.
VAT Registration in Estonia
Any person or company with taxable supply of goods or services and exceeding 16, 000 euros per year is due for registration for VAT in Estonia. Non-Estonian entities have to submit to the same registration process as Estonians and must register for VAT once the taxable supply occurs.
Foreigners have to register for VAT if they have no permanent offices in Estonia but make taxable supply on its territory, if they are liable for VAT in another EU member state and make distance sale to an Estonian that is not registered for VAT and the taxable supply exceeds 35 000 euros. Non-EU entities that do not have a permanent office in Estonia must appoint a tax representative.
VAT Recovery in Estonia
VAT can be recovered in Estonia if the company is entitled to recover VAT on goods and services. VAT is refunded to a foreign taxable person or company after an electronic application form has been filled. The minimum VAT amount that is to be refunded in a year cannot be less than 50 euros, and the minimum VAT refund for less than a year but after at least 3 months must be 400 euros.