KMD and KMD INF explained

A VAT-registered company in Estonia files a VAT return each period, and the most common return is the monthly KMD. The KMD comes with an annex, the KMD INF, which lists your sales and purchases partner by partner. Together they tell EMTA what you sold, what you bought and how much VAT is due. This guide explains each part, the deadline, how Sapita prepares the files and the steps you take in e-MTA.

What the KMD shows

The KMD is the VAT return. It adds up the VAT for the period in numbered rows. Each row answers one question, and the same row always means the same thing, so the return can be compared from one month to the next.

The main rows are these. Row 1 holds the taxable sales at the 24% rate. Row 2 holds the taxable sales at the 9% rate, and row 2.2 holds the sales at the 13% rate for accommodation. A row for zero-rated supplies covers exports and some supplies to other EU businesses. Row 4 holds the total VAT for the period, which is the output VAT on your sales. The input VAT on your purchases is deducted there. The amount to pay, or the amount to reclaim, is the result.

The rows are taken from the books. Each sale is recorded with a VAT class, and the class sends the amount to its row. A wrong class puts the amount in the wrong row, even when the total looks right, so the class is checked before the return is locked.

What the KMD INF shows

The KMD INF is the annex that goes with the KMD. It has two parts. Part A lists the sales you made to each partner, which means each customer, in the period. Part B lists the purchases you received from each partner, which means each supplier.

The annex does not list every small transaction. Only partner-level lines above a threshold are included, and the threshold is €1,000 net for each partner in the period. Partners below the threshold are not listed one by one. The threshold is set in EMTA's rules and the exact rule should be checked on EMTA's KMD INF page before each filing.

The annex exists so that EMTA can match your sales with the purchases of your partners. When the figures for a partner do not match on both sides, EMTA can ask questions. Clean invoices and correct partner details, including the VAT number, prevent most of those questions.

When it is due

The KMD and the KMD INF for a month are due on the 20th of the following month. The VAT for March is therefore due on 20 April. If the 20th falls on a weekend or a public holiday, the deadline moves to the next working day. Sapita shows the reason next to the date, so you can see why a date moved.

A worked example with round numbers. For March, your sales carry €1,800 of output VAT and your purchases carry €600 of input VAT. The return shows €1,200 to pay, due on 20 April. If the purchases had carried more input VAT than the sales, the return would show an amount to reclaim instead.

If the company also has reportable intra-EU supplies, a separate VD report is due on the same schedule. The VD is shown on the calendar only when such supplies exist.

How Sapita prepares the files

Sapita collects the lines from your sales and purchases for the period. It groups them into the rows of the KMD and into the partner lines of the KMD INF. It shows each row with the amounts behind it, so you can follow a figure back to the invoice that produced it.

Before you file, you review the figures, lock the period and export the files for upload. A locked period cannot change quietly. If a figure is wrong after the lock, the correction is made in the next period, through a reversal or a new entry, and the filed return stays as it was.

Sapita prepares the files, but it does not file them for you. The submission is yours.

The e-MTA steps

The return is filed in e-MTA, the online service of the Tax and Customs Board. The steps in order are these:

1. Review the KMD rows and the KMD INF partner lines for the month, and check any partner whose figures look unusual.
2. Lock the period in Sapita, so that the figures you file are the figures in the books.
3. Export the files and upload them in e-MTA, following the format that EMTA accepts at the time of filing.
4. Check the figures shown by e-MTA against your own. A mismatch means one side has a different amount, and you should find out why before you submit.
5. Submit the return, and keep the confirmation with the period's documents.
6. Pay the VAT due by the deadline, using the reference that e-MTA shows for the return.

Keep the confirmation and the uploaded files with the period. They are the proof of what you filed.

Common mistakes

Four mistakes cause most of the trouble. The first is a wrong VAT class on a purchase, which puts input VAT in the wrong row. The second is a missing or wrong VAT number for a partner, which breaks the match in the KMD INF. The third is a payment or invoice recorded in the wrong month, which moves VAT from one return to the next. The fourth is filing before the period is final, which means a later correction has to be made in the next return.

Check each of these before you lock the period. A few minutes of review each month is far cheaper than a correction after EMTA has questioned a return.

Key terms in this guide

• KMD: the monthly VAT return.
• KMD INF: the annex with partner lines.
• VAT: the tax the return reports.
• Output VAT and input VAT: the two sides of the return.
• VAT class: the code that sends an amount to its row.
• VAT number: the partner identifier used in the KMD INF.
• VD: the report of intra-EU supplies.
• Reverse charge: the rule that moves the VAT to the buyer.
• Period lock: the step that fixes a filed period.
• Reversal: the entry that corrects a posted entry.
• E-MTA: the online service where the return is filed.

Sources

• EMTA, value added tax and the VAT return: emta.ee
• EMTA, the KMD INF partner annex and the due dates: emta.ee
• Value Added Tax Act (käibemaksuseadus), Riigi Teataja: riigiteataja.ee