From 01.01.2024, the standard VAT rate in Estonia is 22%
instead of the previous 20%.
In connection with this amendment, there are two transitional provisions in the Act.
- If the goods or services to be transferred are taxed at a standard rate, the user of cash-based VAT accounting may still pay VAT on the turnover of the goods or services after December 31, 2023 at a rate of 20% until December 31, 2025, if an invoice was issued to the buyer and the goods were sent or made became available or the service was provided before January 1, 2024.
- The second transitional provision concerns transactions related to long-term contracts, which are primarily transactions related to real estate. Until December 31, 2025, the taxable person still has the right, on the basis of a written agreement concluded before May 1, 2023, to apply the 20% VAT rate applicable until December 31, 2023 to the transfer of taxable goods or the provision of services, if the relevant agreement provides that the goods or the price of the service includes VAT or a 20% VAT rate is added to the price, and the contract does not provide for a price change resulting from a possible change in the VAT rate.
Source: emta.ee
