- VAT Rate Increase Announcement: As of July 1, 2025, Estonia has officially raised its standard Value-Added Tax (VAT) rate from 22% to 24% to address budgetary challenges and align with EU norms, aiming for long-term financial stability without drastically cutting public services.
- Implications for Businesses: The VAT increase necessitates immediate action from businesses, including updating accounting systems, reviewing contracts, adjusting pricing and marketing materials, and training staff to ensure compliance with the new rate to avoid penalties from the Estonian Tax and Customs Board (EMTA).
- Impact on Cross-Border Transactions: International businesses and online platforms must accurately calculate and collect VAT at the new 24% rate for sales to Estonian customers, particularly those utilizing the One-Stop Shop (OSS) and Import One-Stop Shop (IOSS) schemes, while sector-specific considerations highlight the need for swift updates in retail, e-commerce, and digital services.
Source
Click on the logo to visit the website
Estonia Permanently Increases VAT Rate to 24% by July 2025, New Forms Released
- Estonia increased the standard VAT rate from 22% to 24% in July 2025, making it permanent.
- A new VAT return form was released on 1 July 2025, including boxes for 20%, 22%, and 24% transactions.
- The 20% rate, removed by January 2024, may still apply to certain transactions during a transitional phase.
- The VAT rate increase is part of measures to enhance Estonia’s defense capabilities.
- From January 2025, the VAT rate on accommodation services will rise from 9% to 13%.
- The VAT rate for press publications will increase from 5% to 9%, returning to the rate before August 2022.
- Special provisions allow businesses using the VAT cash accounting scheme to pay lower rates until December 31, 2026, under certain conditions.
Source: marosavat.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
