What is a VAT Number in Estonia? When Should It Be Obtained?

The question “What is a VAT number in Estonia?” can be answered as: it is the official identification code issued to companies to conduct their commercial activities and declare taxes. This nine-digit number, prefixed with the country code “EE”, ensures the registration of commercial transactions valid across the European Union.

Companies whose Estonian-sourced annual turnover exceeds €40,000 from the beginning of the calendar year are required to obtain this number. Businesses can voluntarily join the tax system even if this turnover limit is not reached. Furthermore, an application must be filed within 3 business days after the relevant threshold is crossed, as the number is not automatically assigned during the company formation stage.

What is the Estonian VAT Number and What is Its Format?

The question “What is an Estonian VAT number?” can be answered as: it is the identification code issued to track companies’ tax liabilities and conduct intra-EU trade on a legal basis. Allocated by the Estonian Tax and Customs Board, this number allows businesses to issue invoices and reclaim the taxes they have paid.

The VAT number follows a standard structure, beginning with Estonia’s international country code, the letters “EE”. These letters are followed by a unique, nine-digit sequence of numbers generated exclusively for the business.

The final digit in the sequence functions as a check digit to verify the authenticity of the number. Thanks to this code, e-commerce sites and physical businesses in the country can be easily verified through the VIES system, the European Union’s common tax network.

Who is Required to Obtain a VAT Number in Estonia?

Every business in Estonia with an annual turnover exceeding the €40,000 threshold must register as a mandatory VAT taxpayer and obtain a VAT number. Additionally, companies that maintain a physical warehouse in the country and sell to consumers across the EU via e-commerce are obligated to obtain this number, regardless of their turnover.

What is the Turnover Threshold for Mandatory VAT Registration?

The legal turnover threshold for mandatory VAT registration in Estonia is set at €40,000. VAT registration becomes mandatory the moment a company’s annual taxable turnover exceeds this limit. Furthermore, businesses exceeding the limit are required to apply to the Estonian Tax and Customs Board within 3 business days.

VAT Exemption and Limits in Intra-EU Trade

VAT exemption applies to trade between companies (B2B) located in EU member states, provided that both parties hold a valid VAT number. Invoices are issued with 0% VAT thanks to the reverse charge mechanism, shifting the tax liability from the seller to the buyer.

For B2C (consumer) e-commerce and digital service sales, the total annual turnover limit across the EU is set at €10,000. If this threshold is exceeded, the local VAT rate of the country where the sale is made applies.

When Should an Estonian VAT Number Be Obtained?

An Estonian VAT number must be obtained as soon as a company’s annual taxable turnover from the start of the calendar year exceeds €40,000. Businesses exceeding the legal limit must submit an official application to the Estonian Tax and Customs Board within three business days of crossing this threshold. On the other hand, businesses that have not reached the turnover limit can choose to register for VAT voluntarily to benefit from tax refunds or to build corporate prestige.

How to Get a VAT Number in Estonia?

The question “How to get a VAT number in Estonia?” is answered as follows: this code is obtained electronically through the internet portal of the Tax and Customs Board. Company owners utilizing an e-Residency card log into the system and fill out the online application form. After the necessary commercial documents are uploaded to the system, the Board typically approves the application within 5 business days.

Application Steps with e-Residency

Entrepreneurs who establish a company in Estonia can manage their tax procedures completely remotely and online, thanks to the digital infrastructure. At this point, the e-Residency digital identity card allows you to carry out the entire process with official authorities without the need to travel to the country. The steps for those wishing to obtain a VAT number for their company are as follows:

• First, the company director must securely log into the Estonian Tax Board’s e-MTA portal using their e-Residency card.
• In the next stage, the VAT registration form is selected from the “applications” tab, and the company’s commercial activities and estimated turnover are entered.

Finally, partnership agreements or invoice samples are uploaded to the system. The application process is completed with a digital signature.

Advantages of Being a VAT Taxpayer in Estonia

Being a VAT taxpayer in Estonia is highly advantageous for digital businesses operating in the global market. Through this system, companies can both reduce operational costs and gain commercial credibility within the EU market. The prominent advantages of the process are:

• You can reclaim VAT amounts paid during your international commercial activities from the Estonian Tax Board.
• Having an official tax identity valid throughout the European Union enhances your company’s corporate image and reliability.
• You can benefit from the 0% VAT advantage in B2B trade transactions with other EU companies that possess a valid tax code.
• You can seamlessly complete your store-opening processes on marketplaces and integrate with global payment infrastructures such as Amazon, Stripe, and PayPal.

Even if your company has not yet reached the legal turnover threshold, you can apply voluntarily and start benefiting from these rights immediately.

Please contact Berfin.ee for further information.