Value Added Tax (VAT) is a consumption tax imposed by the state,
paid by persons registered as VAT liable, either due to meeting the
liability threshold or voluntarily registering. In Estonia, an
economic operator is required to register for VAT purposes when
their taxable supply exceeds €40,000, calculated from the
beginning of the year.
VAT-liable persons in Estonia must pay VAT on various
transactions, including:
- Sales supplies,
- Goods and services purchased from foreign entrepreneurs under
the reverse charge mechanism,
- Goods imported into Estonia, and
- Goods purchased from other taxable persons within Estonia that
are subject to internal reverse charge.
Additionally, VAT-registered persons are entitled to deduct
input VAT on their business expenses.
