This article explains when to register for VAT and how to complete the process

The company registration process includes important legal rules set by Estonian law. One key aspect is VAT registration, which is required in certain situations.

The process

First and foremost, companies are obliged to register for VAT if sales in Estonia exceed 40,000 EUR from the beginning of the calendar year. If sales in Estonia do not exceed 40,000 EUR, VAT payers can register voluntarily.

Please note that once you exceed the threshold of 40,000 EUR, you have three working days to register your company as taxable. Hence, the Estonian Tax and Customs Board will treat your company as taxable from the moment of reaching the threshold.

It is also possible to apply for VAT before the threshold value is reached. In that case, if you feel your company is likely to reach the 40,000 EUR threshold, it is wise to start the process beforehand.

When VAT is registered, as a VAT payer, you must pay it to the Estonian Tax and Customs Board and submit monthly VAT returns. It refers to the months during which there was nothing to declare.

As we mentioned earlier, you can voluntarily register your company for VAT if your annual sales don’t exceed 40,000 EUR. You need to prove to the Estonian Tax and Customs Board that you intend to start and run your business in Estonia. Usually, the authority asks for your business plan.

Authorities may also refuse VAT registration if your company has no visible activity located in Estonia. The consideration of your application usually takes up to 5 days. Once approved, you will receive your company’s VAT number. The Estonian VAT number starts with a prefix EE which is followed by nine digits: EE123456789.

Numbers

The general VAT rate is 24% in case your OÜ provides services to clients. It also could be reduced in some particular cases. For example, if your company provides accommodation services, sells books, or offers medical services/products. If you serve customers in third countries or another EU country, 0% VAT is applied.

Some legal nuances also depend on the type of service that is performed, which allocate where a specific service should be subject to VAT. You can find more detailed information on the Estonian Tax and Customs Board homepage.

All in all, the taxable period for VAT is one month, and you must declare and pay VAT to the Tax Authorities by the 20th day of the month following.

We can help you register VAT and arrange accountancy for your company with a VAT number or without exceeding the sales of 40,000 EUR (anno 2026).