Tallinn Court Clarifies VAT Registration and Late Tax Interest Rules

• The Tallinn Circuit Court upheld the tax authority’s retroactive VAT registration of a Czech car sales company in Estonia because it made taxable supplies exceeding the €40,000 threshold.
• The court said having a permanent establishment in Estonia is not required for VAT registration as a taxable person.
• The reverse-charge transfer of the reporting obligation to the company’s customers did not remove the company’s own duty to register for VAT.
• Prior communications with the Tax and Customs Board, where the taxpayer submitted information and received guidance, did not amount to a formal audit binding the authority to all of the taxpayer’s positions.
• As a result, the taxpayer remained liable for interest on late-paid VAT on a land sale that had been wrongly treated as VAT-exempt.

Source: kpmg.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.

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