Compliance Alert – Increase in the VAT rate to 22% and other VAT changes

The Estonian Tax and Customs Board has published changes in the VAT Act.

As of 1 January 2024, the standard VAT rate increases from 20% to 22% in Estonia.

Until 31 December 2025, the user of cash accounting of VAT may pay VAT at the rate of 20% on the supply of the goods or services generated after 31 December 2023. With the condition that the invoice was issued and the goods or service were supplied before 1 January 2024.

There are also some transitional provisions for users of cash accounting of VAT until 31 December 2026:

• As of 1 January 2025, the VAT rate for accommodation services increases from 9% to 13%. The user of cash accounting of VAT may pay VAT at the rate of 9% on the supply of accommodation services or accommodation services with breakfast generated after 31 December 2024 if an invoice was issued and the service was supplied before 1 January 2025;
• As of 1 January 2025, the VAT rate for press publications increases from 5% to 9%. The user of cash accounting of VAT may pay VAT at the rate of 5% on the supply of press publications generate after 31 December 2024 if an invoice was issued and the goods or services were provided before 1 January 2025.