Tax rate by region Estonia

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

VAT on SaaS in Estonia: A Guide to Compliance

Estonia’s modern and transparent tax administration reflects the EU’s VAT system implementation in 2000. As a consequence, businesses selling SaaS in Estonia must adhere to the standard 20% VAT rate. While some categories, like educational services, qualify for exemption, it’s crucial to correctly determine the applicable VAT rate and comply with the regulations.

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Estonia

Estonia adopted the EU VAT system in 2000, focusing on modernizing its tax administration and improving compliance.

Official government link: Estonian Tax and Customs Board

24.00%

E-products and services VAT/Sales tax rate

9.00%

Reduced tax rate

Reduced tax rate product categories

E-books have reduced tax

Exempted product categories

Some educational services may be exempt

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

Non-resident companies have to register as soon as goods are being delivered or services are being provided

Online registration possible

Yes

Local representative needed

Yes

Registration procedure

Individuals seeking to apply for a special regime must submit a registration application to the Department of Taxes and Customs.

Taxable persons in Estonia should use the e-MTA portal, navigating to “Registers and inquiries” – “Registration” – “Registering as a user of special schemes for e-commerce and services (union-OSS)”.

List of digital and electronic services liable for tax

A digital product refers to any item that is stored, delivered, and utilized in an electronic format. These products or services can be received via email, downloaded from the Internet, or accessed directly on a website. Examples include, but are not limited to:

Audio, visual, or audiovisual content
Downloadable and streaming music, such as MP3 purchases or music apps
Cloud-based software and services, including SaaS, PaaS, and IaaS
Websites, web hosting services, and internet service providers
Non-fungible tokens (NFTs)

Penalties

The taxpayer must calculate and pay the tax within the designated timeframe. If they fail to do so, starting from the day after the deadline, the tax authority will impose interest at a rate of 0.06% per day.

Registration threshold

No threshold, non-resident companies must register for VAT

Filing interval

Monthly

Filing deadline

By the 20th day of the month following the reporting period

E-invoicing requirements

Yes

Record keeping

Relevant records must be kept for at least 10 years

How-To Guides: Estonia SaaS VAT

Step: 1 Threshold

Effective May 1, 2004, Estonia requires non-EU vendors (including online platforms) of digital services to consumers (B2C) in Estonia to register for and collect VAT, regardless of the sales amount. The obligation was expanded to EU-established digital services providers effective January 1, 2015.

 

Effective January 1, 2019, Estonia applies a VAT registration threshold of EUR 10,000 for EU-established digital services providers. The threshold does not apply to non-EU businesses.

EU Businesses: Registration is mandatory if taxable turnover exceeds this threshold in a calendar year. Non-EU businesses with no permanent establishment must register from the first taxable supply unless the Reverse Charge applies.

Step: 2 Business Registration

Managed by the Estonian Tax and Customs Board (MTA). Non-residents can register via the e-MTA portal using e-Residency or through a designated tax representative.

Step: 3 TIN/VAT Number

Issued as a VAT Identification Number (KMKR number) by the MTA. Format: EE followed by 9 digits (e.g., EE123456789).

Step: 1 Standard VAT Rate

The standard VAT rate in Estonia is 24% (Standard VAT rate for Digital Services/SaaS as of 2025/2026).

Step: 2 Determine if you need to register.

To calculate your tax amounts, use the following formula: 

 

Tax Amount = Net Price x 24%

Step: 3 Reverse Charge (B2B):

It applies to cross-border B2B sales. If the Estonian buyer is VAT-registered, the seller charges 0% VAT and the buyer accounts for the tax in Estonia. The invoice must include the buyer’s VAT ID and a reference to “Reverse Charge.

  • Product category eligible for reduced/exempt tax: Yes. – 9% on electronic books / study literature.

Step: 1 Selling B2C

You must charge the Estonian VAT rate (24%) to private consumers. For non-resident EU sellers, this is managed via the One-Stop Shop (OSS) if total EU cross-border sales exceed €10,000.

Step: 2 Selling B2B

Tax is not charged (0% VAT) if the buyer provides a valid VAT ID. Use the VIES system to verify numbers.

Step: 3 Determine if you need to register.

Invoices must contain: 

  • Unique sequential invoice number
  • Date of issue and date of supply
  • Supplier & Buyer full name and address
  • Supplier VAT ID
  • Buyer VAT ID (for B2B/Reverse Charge)
  • Description of services (SaaS subscription)
  • Taxable amount, VAT rate (24% or 0%), and total VAT amount
  • “Reverse Charge” note for B2B.

Step: 1 Filing Interval

Taxes must be filed monthly (standard). Quarterly filing may be requested if turnover is below €200,000.

Step: 2 Filing Deadline

Taxes must be filed by the 20th day of the month following the taxable period.

Step: 3 Submission

Filed electronically via the e-MTA portal. Payment is made to the MTA bank account using a specific reference number. For B2C via OSS, filing is quarterly via the portal of your member state of registration.

Step: 4 Record Keeping

Tax records must be kept a minimum 7 years for accounting documents. For OSS/IOSS e-services, records must be kept for 10 years.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Estonia’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

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