Special VAT Rules for E-commerce in Estonia

WHO NEEDS IT?

A company registered as a VAT payer and owning an online store can facilitate cross-border sales to end consumers. In such cases, the company is considered both the buyer and reseller of the goods. In English, such online stores are known as "deemed suppliers."

Special regimes allow companies to declare and pay VAT for cross-border retail sales in their home country through a single declaration, avoiding the need to register as a VAT payer in each member state where the consumers are located.

Distance selling is divided into two transactions: the sale of goods from the actual seller to the online store owner (B2B), and the subsequent resale of the same goods by the online store owner to the end consumer (B2C).

The use of both OSS and IOSS special schemes is voluntary. To apply these schemes, a declaration must be submitted to the tax office.

Estonian legal entities (VAT payers) can submit the application in the e-services environment e-MTA, selecting "Registers and Queries."

If a seller does not wish to use the special scheme, they must register as a VAT payer in the member states where the end consumers are located (if not using OSS) and carry out standard customs procedures for imported goods (if not using IOSS).

OSS Scheme

The OSS scheme applies to the sale of goods located in Estonia to end consumers outside the EU by a company whose business location is outside the EU and does not have a permanent establishment in any EU member state. A business that opts for the OSS scheme must declare and pay VAT to the Estonian tax authority.

IOSS Scheme

The IOSS scheme is available to VAT payers who deal with distance sales of goods imported from non-EU countries to end consumers in the EU.

The scheme applies from the day the individual is given an IOSS registration number.

The country of registration shares the IOSS registration number with all EU tax authorities, and this number is valid throughout the EU.

When applying, taxpayers must consider that IOSS can only be used for distance sales of imported goods from non-EU countries valued at less than 150 euros and which are not excise goods.