Estonian VAT was raised in January 2024 from 20 % to 22 % — the largest hike in history. In this guide we look at all practical aspects: the three rates (22/9/0 %), the €40,000 registration threshold, monthly KMD filing, what counts as VAT-exempt (education, healthcare, financial services).
In January 2024 the Riigikogu raised VAT from 20 % to 22 %. Reason: covering the budget deficit (post-war cash needs, defense investments). Transition rules: invoice date determines the rate. For services provided up to 31.05.2024 under contracts signed before 31.12.2023, 20 % could still apply (transition period). After that 22 % is mandatory. For advances: the advance share = old rate (if advance date before 01.01.2024), the rest = new rate.
Reduced rate 9 % applies to specific categories: books (paper and e-books), magazines and newspapers (including online subscriptions), accommodation services (hotels, hostels, Airbnb), accessories for the disabled (wheelchairs, hearing aids), prescription medicines. NB: groceries (except baby food) are 22 %, restaurants 22 %, building materials 22 %. The reduced rate is narrowly scoped — many other EU countries use it more broadly.
VAT registration is mandatory if annual turnover exceeds €40,000 (since 2018 — previously €16,000). Voluntary registration is allowed below the threshold and is useful for companies buying lots of input VAT (recoverable). Registration in the EMTA portal takes 5 minutes (online with e-resident ID). KMD obligation starts the registration month. VAT-payer number format: EE100123456 (EE + 9 digits).
The KMD form is filed every month by the 20th in the EMTA portal (until 2025 it could be quarterly, from 2026 only monthly). The form auto-fills incoming invoices (input VAT) and outgoing invoices (output VAT). Exempt activities: medical services (doctors, dentists, clinics), education services (schools, universities, training), financial services (banks, insurers), real estate rental to individuals (not commercial premises). Exempt turnover doesn't need to be declared in KMD, but the "Exempt turnover" info field must show the total.
Talk to us about how the 4b2b ecosystem fits into your existing EMTA flow. We have implementations from 10-employee firms to Nasdaq Tallinn companies.
