VAT basics in Estonia

Value added tax (VAT, in Estonian käibemaks) is a tax on the value added at each step when goods or services are sold. A registered business charges VAT on its sales and pays the amount that it has charged, less the VAT it paid on its own purchases. The difference is paid to the Tax and Customs Board.

Output VAT and input VAT

• Output VAT is the VAT on your sales invoices. You collect it from the customer.
• Input VAT is the VAT on your purchase invoices. You paid it to your supplier.

For each period, the amount you pay is the output VAT minus the input VAT that you are allowed to reclaim. If the input VAT is larger, the difference can come back to you.

Rates

Estonia has a standard rate and reduced rates for some goods and services. The standard rate was raised to 24% on 1 July 2025. The reduced rates apply to specific categories set out in the VAT Act, so the rate on each sale depends on what the sale is.

Who must register

A company must register for VAT once its taxable turnover since the start of the calendar year goes above the threshold. Lesson 5 explains the threshold. A company below the threshold can also register voluntarily, which changes how it charges VAT on its invoices.

How it appears in Sapita

Sapita stores a VAT class on each line of an invoice or a purchase. The class decides the rate and the box the amount goes to in the VAT return. You pick the class, and Sapita works out the amounts and the return.