These rate changes will impact most of our e-resident clients with a limited company in Estonia. Both businesses and consumers are better off being informed well before these changes are in effect. Here’s an overview of the changes.
Changes from 1 January 2025
Some changes took effect from 1 January 2025. The VAT rate for accommodation services, including those with breakfast, increased from 9% to 13%. VAT on press publications is 9%.
Changes from 1 July 2025
Standard VAT rate is 24%.
What it Means for Estonian Company Owners
These changes in VAT rates have at least three implications:
1. Pricing Adjustments: You may need to adjust your prices to accommodate the new VAT rates.
2. Accounting and Invoicing: Accounting systems must be updated to reflect these changes. Special attention should be given to long-term contracts and transactions around the transition periods.
3. Budgeting: You may need to consider changing your budgets and financial plans.
Conclusion
The upcoming changes in Estonia’s VAT rates are significant and require attention from trading companies. Staying informed and seeking professional advice helps to adopt VAT rate changes effectively. As always, it’s good to communicate with your accountant to avoid any financial losses due to invoices issued with the wrong VAT rate.
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