Sole proprietor and value added tax
From 1 January 2011, all taxable persons for value added tax (VAT) purposes, including sole proprietors, shall be subject to VAT accounting on a common basis.
The following shall be subject to VAT:
- supply (except supply exempt from tax) created in Estonia;
- import of goods into Estonia (except imports exempt from tax);
- provision of service the place of supply of which is not Estonia (except supply exempt from tax);
- supply exempt from tax which is taxed according to the possibility provided by law;
- acquisition of goods within the European Union (except intra-Community acquisition of goods exempt from tax).
Sole proprietors pay VAT if they are registered as persons liable to VAT in the Tax and Customs Board (hold a VAT identification number). The obligation to pay VAT may also arise for a sole proprietor who is not registered as a person liable to VAT but who acquires a new transport vehicle or excise goods from another Member State of the European Union (except in the case where excise goods are acquired for personal use). VAT must also be declared and paid by sole proprietors who are not registered VAT payers but who add VAT to invoices issued by them. However, it should be taken into account that a person who is not registered for VAT purposes is not entitled to deduct input VAT.
- The tax rates for taxable supply are 0%, 5%, 9% and 20%.
- The taxable period for VAT is a calendar month.
- The value added tax return (Form KMD) is to be submitted to the Tax and Customs Board by the 20th day of the month following a period of taxation. By the same date, VAT is to be paid into the bank account of the Tax and Customs Board.
Last updated: 19.09.2022
Last updated: 10.12.2021