Estonia Increases VAT Rates

Estonia adopted the Value Added Tax Amendment Act 147 SE, which increased the standard VAT rate and the reduced VAT rates for some goods and services.

Timeline

Effective from January 1, 2024, the standard VAT rate will increase from 20% to 22%.

As from January 1, 2025, the VAT rate for both printed and electronic press publications will increase from 5% to 9%, and the VAT rate for accommodation services will increase from 9% to 13%.

Impact

To mitigate the impact of this reform, the Act creates some transitional rules:

• Until December 31, 2025, VAT-registered businesses can apply the 20% VAT rate for the sale of goods or the provision of services if the relevant contract was concluded before May 1, 2023.
• Until December 31, 2025, VAT-registered businesses using cash-based VAT calculation can apply the 20% VAT rate for the sale of goods or the provision of services if the relevant invoice and the goods were sent or made available, or the service was provided, before January 1, 2024.
• Until December 31, 2026, VAT-registered businesses using cash-based VAT calculation can apply the 9% VAT rate for accommodation services if the recipient of the service was invoiced and the service was provided before January 1, 2025.
• Until December 31, 2026, VAT-registered businesses using cash-based VAT calculation can apply the 5% VAT rate for both printed and electronic press publications if the relevant invoice and the goods were sent or made available, or the service was provided, before January 1, 2025.

Businesses registered or planning to register in Estonia need to update the Estonian VAT rates in the systems they use to calculate tax and issue invoices.

How Fonoa Can Help

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Don't let the VAT rate changes hold you back, contact Fonoa today and elevate your business to a new level of efficiency and compliance!