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Transition to the general procedure of VAT accounting

We would like to point out that upon withdrawal from the special arrangement (special arrangements for cash accounting for value added tax), (transitioning to standard arrangement, i.e. accrual-based accounting for value added tax), the date when turnover was created and input VAT deduction date must be set based on the rule applied during the time when the goods were sold or services rendered or goods or services received for the purposes of own taxable turnover (Value Added Tax Act § 44 (10)).

For example you are withdrawing from the application of special arrangements effective 1 May. You dispatched the goods in April, received partial payment in June (no final payment occurred). Then you must report turnover on your tax return partially, in Form KMD for June by 20 July to the extent received and in Form KMD for July, due 20 August, to the extent unpaid (subject to Value Added Tax Act § 44 (5)).

If you paid in May for services received in April (invoice in April), then you are entitled to deduct input VAT on Form KMD for May due 20 June.
 

If you need any assistance


More information on VAT matters is provided by the ETCB via the following channels:

  • e-mail: ariklient@emta.ee
  • phone: (+372) 880 0812 (Mon–Thurs 8:30–16:30, Fri 8:30–15:30)
     
27.11.2018