An Estonian entrepreneur (a company or sole proprietor registered in Estonia) is not automatically treated as a taxable person for VAT purposes. If an Estonian entrepreneur actually does not have any business in Estonia, it has in Estonia neither taxable supply nor other transactions which are taxable with VAT in Estonia (for example, intra-Community acquisition of goods where the goods are transported from the other EU Member State to Estonia) – in such case, as a rule, the entrepreneur shall not be registered in Estonia for VAT liability. If an undertaking is registered in the Estonian Commercial Register, but performs in the course of business activities only transactions, taxable with VAT in a foreign country – such undertaking must contact with the tax authority of correspondent foreign country and find out its VAT obligations in that foreign country.
The entrepreneur must register for VAT liability in Estonia if its taxable supply (the supply of the goods and services which shall be taxed in Estonia and which VAT rate is 20%, 9% or 0%) from the beginning of a calendar year exceeds the threshold established in the Estonian Value Added Tax Act; today this threshold is 40,000 euros. The transfer of fixed assets is not included in the aforementioned threshold. If the annual turnover of the entrepreneur is less than this threshold – than the entrepreneur has no obligation to register for VAT liability and has no obligation to pay VAT in Estonia if it sells goods which are taxable with VAT or provides services which are taxable with VAT.
If a company has registered in Estonia for VAT liability, it must submit the VAT returns and pay VAT to the Estonian Tax and Customs Board. The taxation period for VAT purposes is one calendar month and the VAT return must be submitted and the amount of VAT due must be paid to the Estonian Tax and Customs Board by the 20th day of the following month. The VAT return should be submitted even if there was neither taxable supply nor deductible input VAT for the particular period.
A company, registered in Estonia for VAT liability, is also required to submit a report on intra-Community supply by the 20th day of the month following the taxable period if it has effected intra-Community supply or has transferred goods as a reseller in a triangular transaction during the taxable period.
The sale of goods from Estonia to the VAT payers of the other EU Member State together with the transport of goods from Estonia to the other Member State, and the provision of such kind of services to a VAT payer of the other Member State where the Member State of the recipient of the service shall be treated as the place of supply, irrespective of the country where the services were actually provided (the provider of the service declares the services in its own Member State as the supply with 0% VAT) – these transactions are treated as intra-Community supply. Services which always shall be taxed with VAT and shall be declared in the country where the services were actually provided, irrespective of the recipient of the service (incl. the recipient is a VAT payer of the other EU Member State) – such services shall not be declared in the report on intra-Community supply. The seller, registered for VAT liability in Estonia, shall not add VAT to the sales price of the goods which are transported to the other Member State to a purchaser who is a VAT payer (or are transported to that Member State by the purchaser). However, the supply is effected in the country of dispatch of the goods (the goods are taxable with 0% VAT rate in that country), but the goods shall be taxed with VAT in the country of destination, according to the VAT rates established in the country of destination. Additionally to the transfer of goods, the transport of goods by a VAT payer to the other Member State, without transferring them, for them to be used for business purposes there is also treated as intra-Community supply.
The place of intra-Community supply of goods is not Estonia if the goods are located not in Estonia but in any other Member State at the moment of the sales transaction. In such case the seller must follow the tax legislation of the Member State where the goods are actually located, and the seller must know whether he is required to register for VAT liability in that other Member State where the goods are located at the moment of the sales transaction (excl. triangular transaction).
A person of another Member State engaged in business with no permanent establishment in Estonia may appoint upon registration as a VAT payer a tax representative specified in the Estonian Taxation Act, who has been approved by the Estonian Tax and Customs Board.
A person of a non-EU country engaged in business with no permanent establishment in Estonia shall appoint, upon registration as a VAT payer, a tax representativeYou can find more useful information: