The €40,000 VAT threshold

In Estonia a business must register for VAT when its taxable turnover since the start of the calendar year goes above €40,000. Only turnover whose place of supply is Estonia counts. Below that figure a company does not have to register, and its invoices do not show VAT.

What counts toward the threshold

The turnover counts the value of the supplies you make that are taxable in Estonia, measured without VAT. Some supplies are not counted, and some are counted at a different time. The exact rules are in the VAT Act and in the guidance of the Tax and Customs Board, and the calculation is yours to check.

How Sapita helps you watch it

Sapita adds up the taxable sales since 1 January of the current year, which is how the Tax and Customs Board counts them. When they come near the threshold, a to-do item on the home screen links to this lesson. The figure is a guide to help you see the trend. It is not a ruling, and the calculation is yours to check.

What happens when you pass it

Once turnover goes over the threshold, you must register. The deadline to register is set by the VAT rules, and it is short. Plan for it before you reach the threshold, because your invoices need VAT from the day you are registered.

Voluntary registration

You may register before you reach the threshold. Some companies do this because their customers are VAT registered and they want to reclaim the VAT on their purchases. Registering has effects on prices and on the returns you file, so think it through before you register.