Change in VAT rate in Estonia from January 1, 2024

Change in VAT rate in Estonia from January 1, 2024

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Starting from January 1, 2024, the standard VAT rate in Estonia will be 22%, replacing the previous 20%

The government has established transitional provisions for transactions made before 01.01.2024 and provides exceptions regarding long-term contracts. If the sale of goods or services was completed before the beginning of 2024, but the payment is received in 2024, the taxation will be based on the time of the income receipt, then still 20% VAT rate applies.

For long-term contracts, especially lease agreements and real estate contracts, until December 31, 2025, parties have the right to apply a 20% VAT rate on taxable goods/services sold under a written contract concluded before May 1, 2023. The contract must specify that the price of the goods/services includes VAT or that 20% VAT will be added to the price, and the contract does not provide for a price change resulting from a possible change in the VAT rate.

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