One of the most common questions we get from e-residents who have just registered their Estonian OÜ is some version of this: “I have my company. Now what do I actually have to do every month?”
It is a fair question. Company formation is well-documented as there are guides, videos, and step-by-step walkthroughs everywhere. But the ongoing compliance obligations that kick in the moment your company is registered? Far less so.
This guide covers everything your Estonian OÜ is required to do on a monthly basis: which declarations must be filed, to whom, by when, and what happens if you miss them. Whether you handle your accounting yourself or use a service like Unicount, understanding these obligations is the foundation of running a compliant Estonian company.
The two declarations most Estonian companies file every month
1. TSD: Income and Social Tax Declaration
The TSD (tulu- ja sotsiaalmaksu deklaratsioon) is Estonia’s combined income and social tax declaration. It must be filed monthly by every Estonian company that has made any of the following payments during the month:
- Salary payments to employees or directors
- Director’s fees (juhatuse liikme tasu)
- Dividends distributed to shareholders
- Payments to contractors or service providers who are individuals
- Fringe benefits provided to employees or directors
Deadline: The 10th of the following month. If the 10th falls on a weekend or public holiday, the deadline moves to the next working day.
Filed via: The EMTA e-services portal at emta.ee.
What it covers: The TSD declaration reports all taxable payments made during the month and calculates the income tax, social tax, unemployment insurance contributions, and funded pension contributions owed on those payments. All amounts due must be paid to EMTA by the same 10th-of-month deadline.
Who must file: Any company that made a qualifying payment during the month. If your company made no salary payments, director’s fee payments, or dividend distributions in a given month, you generally do not need to file a TSD for that month.
Penalty for late filing: Late submission results in a fine of €10 per day up to €300 per declaration. Underpayment of tax results in interest at 0.06% per day on the outstanding amount.
2. KMD: VAT Declaration
The KMD (käibemaksudeklaratsioon) is Estonia’s monthly VAT return. It applies only to companies that are registered as VAT payers.
If your company is not VAT-registered — which is the case for most newly formed e-resident OÜs — you do not file a KMD. VAT registration becomes mandatory only once your taxable Estonian turnover reaches €40,000 in a calendar year. You can also register voluntarily before reaching this threshold.
Deadline: The 20th of the following month.
Filed via: The EMTA e-services portal at emta.ee.
What it covers: The KMD declares all taxable supplies made during the month (your sales), all taxable acquisitions on which you paid input VAT (your purchases), and the net VAT owed to EMTA — or the input VAT credit carried forward. For most small e-resident companies with primarily B2B EU clients, the reverse charge mechanism applies to most invoices, which simplifies the KMD significantly.
Filing even in zero-activity months: Once registered for VAT, you must file a KMD every month — even in months where you had no transactions. There is no option to skip a month.
Penalty for late filing: €10 per day up to €300 per declaration, plus 0.06% daily interest on any unpaid VAT.
The INF annex filed alongside the KMD
VAT-registered companies also file the KMD INF annex alongside their monthly KMD. This annex provides transaction-level detail for sales and purchases above certain thresholds with other Estonian VAT-registered parties.
For companies whose clients and suppliers are primarily outside Estonia, the INF annex is often minimal or empty. But it must still be submitted as part of the KMD filing process.
Monthly accounting: not a declaration, but a real obligation
Beyond the formal declarations filed with EMTA, every Estonian company is required to maintain proper accounting records on an ongoing basis. This is not a filing you submit each month — but it is a legal obligation that underpins all the filings you do make.
Under the Estonian Accounting Act, every company must:
- Record all economic transactions promptly and accurately
- Keep source documents (invoices, receipts, bank statements) for every transaction
- Maintain records that allow the preparation of a compliant annual report at year end
In practice, this means that every invoice you issue, every expense you pay, and every bank transaction that flows through the company must be recorded in your accounting system. For most e-resident OÜs, this is done either through an accounting service or through a bookkeeping platform.
Why this matters: The quality of your monthly bookkeeping directly determines how smoothly your annual report can be prepared. Companies that keep clean monthly records produce annual reports quickly and cheaply. Companies that try to reconstruct a year’s worth of transactions in June typically face higher accountant fees, delays, and errors.
What your monthly obligations look like in practice
To make this concrete, here is what the typical e-resident OÜ deals with each month depending on their situation:
Scenario A: Company with no employees, no director’s fee, not VAT-registered
This is the most common profile for a newly registered e-resident company that is invoicing B2B clients and keeping profits in the company.
Monthly obligations:
- No TSD required (no salary or director’s fee payments made)
- No KMD required (not VAT-registered)
- Bookkeeping: record all invoices issued and any business expenses paid
Filing calendar: Nothing formal to submit to EMTA each month. Annual report due by 30 June.
Scenario B: Company paying a director’s fee, not VAT-registered
Many e-resident founders choose to pay themselves a regular director’s fee from the company. This triggers TSD obligations.
Monthly obligations:
- TSD by the 10th — reporting the director’s fee and paying the associated income tax and social tax
- No KMD required (not VAT-registered)
- Bookkeeping: record all invoices, director’s fee payments, and expenses
Important note on social tax: When a director’s fee is paid, the company must pay social tax (sotsiaalmaks) at 33% on the gross payment, plus unemployment insurance contributions. These are significant costs that many founders overlook when deciding to pay themselves a monthly fee. Your accountant can help you model the most tax-efficient way to take money out of the company.
Scenario C: Company paying a director’s fee AND VAT-registered
Monthly obligations:
- TSD by the 10th
- KMD by the 20th (plus INF annex)
- Bookkeeping: record all invoices issued, input VAT on purchases, director’s fee, and all other expenses
This is the most administratively demanding scenario and the one where professional accounting support pays for itself most clearly. Two separate monthly deadlines, each with penalties for late filing, plus ongoing bookkeeping — this is a real monthly workload.
Scenario D: Company distributing dividends
If you decide to distribute profits as dividends during any given month, a TSD must be filed for that month reporting the dividend distribution and paying the 22% corporate income tax.
Important: Dividend distributions do not create social tax obligations — unlike director’s fee payments. This is why many e-resident founders prefer dividends over regular salary as their primary method of taking money from the company.
The annual report – the one yearly obligation everyone must meet
On top of the monthly obligations, every Estonian OÜ must file an annual report with the Estonian Business Register by 30 June each year. This applies to all companies — active and dormant, large and small.
The annual report is separate from the EMTA declarations and is filed through the e-Business Register portal, not EMTA. It covers the full previous financial year (typically 1 January to 31 December) and must be prepared according to Estonian accounting standards.
Missing the 30 June deadline means a formal warning on your company’s public record, personal fines of up to €3,200 per board member, and in serious cases, forced deletion from the register.
The most common mistakes e-resident founders make with monthly obligations
Assuming no activity means no obligations. If your company is VAT-registered, you must file a KMD every month — even in quiet months with no invoices. Many founders skip months assuming nothing happened, then receive a late filing penalty.
Forgetting that dividends trigger a TSD. Even if you have no employees and pay no salary, distributing a dividend requires a TSD filing by the 10th of the following month.
Leaving bookkeeping until the end of the year. Monthly bookkeeping is not just good practice — it is a legal requirement. Reconstructing a year of transactions in June is stressful, expensive, and prone to errors.
Missing source documents. Every expense claimed must be backed by a proper invoice or receipt. Estonian accountants regularly encounter situations where founders have paid for legitimate business expenses but cannot claim them because they have no documentation.
Not tracking the VAT threshold. If your taxable Estonian turnover is approaching €40,000, you need to act before you hit the threshold — not after. The 3-day registration window is real and the obligation is backdated if you miss it.
A monthly compliance calendar at a glance
| Deadline | What | Who |
|---|---|---|
| 10th of each month | TSD declaration + payment | Companies that paid salary, director’s fee, dividends, or contractor fees in the previous month |
| 20th of each month | KMD + INF annex + payment | VAT-registered companies only |
| Ongoing | Bookkeeping and document retention | All companies |
| 30 June annually | Annual report | All companies, every year |
Do you need an accountant for all of this?
For a simple e-resident OÜ that is not VAT-registered and does not pay a regular director’s fee, the monthly compliance burden is genuinely low — primarily just keeping clean bookkeeping records. Many founders in this situation manage their own bookkeeping using basic tools and prepare for the annual report once a year.
But the moment you add VAT registration, regular director’s fee payments, employees, or frequent dividend distributions, the complexity increases significantly. Two monthly EMTA deadlines, social tax calculations, VAT recovery on expenses, and correct categorisation of transactions — this is where errors become expensive and where professional accounting support saves both money and stress.
Unicount’s accounting service covers all of this: monthly bookkeeping, TSD and KMD filings, VAT registration and returns, and annual report preparation. Everything in one place, in English, managed by accountants who specialise in e-resident companies.
View Unicount accounting plans →
Frequently asked questions
My company had no activity this month. Do I need to file anything?
If you are not VAT-registered and made no payments to individuals (salary, director’s fee, dividends), you generally have no monthly filing obligations. However, keep your bookkeeping records updated even for months with no activity. If you are VAT-registered, you must still file a KMD even for zero-activity months.
How do I file TSD and KMD declarations?
Both are filed through the EMTA e-services portal at emta.ee. You log in with your e-residency card, navigate to the relevant declaration form, complete it, and submit. Payment is made through the portal or via bank transfer to EMTA’s account. If you use Unicount’s accounting service, we handle all of this on your behalf.
What is the difference between TSD and KMD?
TSD is the income and social tax declaration — it relates to payments you make to people (salary, director’s fee, dividends). KMD is the VAT return — it relates to sales and purchases involving VAT. They are separate declarations filed on different dates with different content.
Can I do my own accounting for an Estonian OÜ?
Yes, there is no legal requirement to use a professional accountant. However, Estonian accounting standards must be followed, declarations must be filed in Estonian through EMTA’s portal, and errors carry penalties. For companies with simple structures and low transaction volumes, self-accounting is feasible. For anything more complex, professional help is strongly recommended.
What happens if I miss the TSD deadline?
You will receive a penalty of €10 per day up to €300 per declaration, plus interest on any unpaid tax at 0.06% per day. EMTA will also send reminder notices. Repeated non-compliance can result in further enforcement action.
Further reading on Unicount:
