In short: a company must register for VAT if its taxable turnover arising in Estonia exceeds, from the start of the calendar year, €40,000. The application must be submitted to the Tax and Customs Board within three working days of exceeding the threshold. In 2026 the standard VAT rate is 24%.
Last updated: 16 October 2026. Tax rates may change; before making a bigger decision, check the latest information from the Tax and Customs Board or ask us.
When does the obligation to register arise?
The obligation arises on the day when turnover counted towards the threshold exceeds €40,000 from the start of the calendar year. The count starts again on 1 January every year.
The following generally count towards the threshold:
- taxable turnover arising in Estonia
- zero-rated turnover arising in Estonia
- certain real estate, financial and insurance transactions, if they are not occasional
As a rule, the following don't count: sales of fixed assets, occasional real estate and financial transactions, transactions whose place of supply is not Estonia, and dividends.
Example: before 12 June, turnover counted towards the threshold is €38,000. On 12 June another €4,000 of Estonian turnover arises. The threshold is exceeded on 12 June, and the application must be submitted within three working days.
Limited VAT liability
Even if turnover stays below €40,000, registration may be required. If you buy goods from another EU country worth more than €10,000 in a calendar year, the company is registered as a person with limited VAT liability.
For foreign services (Google and Meta advertising, cloud software, web hosting, foreign consulting), the obligation of a person with limited VAT liability may arise already from the very first service. Estonian VAT then has to be calculated on these purchases, but as a rule it cannot be deducted.
What changes after registration?
| Before | After |
|---|---|
| There's no VAT on sales invoices | VAT is added to taxable sales (generally 24%) |
| VAT on purchases is a cost | Input VAT on business-related purchases can be deducted |
| No VAT return (KMD) is submitted | The VAT return (KMD) is submitted by the 20th of each month, even for months with no turnover |
| Invoicing is simpler | Invoices must meet the requirements for VAT invoices |
If a return deadline falls on a weekend or public holiday, it moves to the next working day. The payroll tax return TSD is still submitted by the 10th of each month.
What to do before you reach €40,000?
- From €30,000, track turnover counted towards the threshold at least once a month.
- Check the impact of a larger transaction before issuing the invoice.
- Decide whether your prices to clients exclude or include VAT.
- Agree with your accountant on the registration date and the first returns.
Registering late doesn't make the tax go away. The Tax and Customs Board may register you retroactively and demand VAT on the turnover in between, plus interest. If you can no longer charge the client the extra VAT, you'll pay it out of your margin.
How do you deregister?
You can apply for deregistration if turnover counted towards the threshold hasn't exceeded €40,000 in the current or previous calendar year and isn't expected to exceed it in the next 12 months either. Before deregistering, review your stock, fixed assets and previously deducted input VAT.
Frequently asked questions
What is the VAT registration threshold in 2026?
€40,000 of taxable turnover arising in Estonia from the start of the calendar year.
Within how many days do you have to register?
Within three working days of the day the threshold was exceeded.
Can I register with a smaller turnover?
Yes, voluntarily, if you can prove that you are running a business or starting one. Read more: should an OÜ register for VAT voluntarily.
What is the standard VAT rate?
Since 1 July 2025 the standard rate is 24%. If the final price includes 24% VAT, VAT makes up 19.35% of the final price.
Approaching the €40,000 threshold?
We'll help you register on time, set up your invoices and submit your VAT return every month. For a VAT-registered company, our Growth package from €159 per month.
Sources: Tax and Customs Board, Value Added Tax Act (Riigi Teataja).