Sales tax in Tallinn
By Mart Nõmm
Sunny Business Services
Concise memo of sales tax
1. Sales tax in Tallinn shall take force from June 1, 2010.
2. Goods sold and services provided in the field of retail business, catering or service to a natural person in or through the place of business located on the territory of the City of Tallinn by a taxable person shall be taxed with sales tax. Sales tax shall not be imposed to goods and services sold to legal persons.
3. Taxable person is a trader meeting all following conditions:
• The trader has been registered in the register of economic activities;
• The trader is operating in the field of retail business, catering or service;
• Place of business (not place of registration) of the trader is located on the territory of the City of Tallinn.
4. The rate of sales tax is 1% of the taxable value of goods and services.
5. Tax liability shall be created on the day when one of the following operations is performed first:
• Dispatch of goods or making it available to the purchaser or provision of service;
• Receipt of partial or full payment for goods or service.
In case of long-term contracts the tax liability shall be created in the period:
• When the period of time expires, for which services the invoice is submitted, or
• When the payment has been agreed.
On the basis of long-term contracts concluded before June 1, 2010 the sales tax shall be paid from:
• Goods dispatched or made available from June 1, 2010;
• Services provided from June 1, 2010.
6. The taxable value is sales price of goods or service and anything other considered a charge (without VAT) paid by the puchaser of goods or receiver of service to the trader. For example, if the price of goods or service is 100 EEK and thus VAT is 20%, the sales tax shall be paid in the amount of 1% from the sum 100 EEK, which makes 1 EEK. However, if it is decided that the relevant sales tax shall be paid by the purchaser of goods or service and the sales tax is added to the sales price, VAT shall be 20% of 101 EEK. Also legal persons not liable to value added tax shall pay sales tax from the sales.
7. In case of transactions performed in foreign currency, the official exchange rate of the Bank of Estonia valid on the day of creation of tax liability shall apply.
8. Exemption from sales tax shall apply to goods and services sold on the territory of Tallinn within the framework of e-trade.
9. Taxation period is calendar quarter. Thus the first taxation period shall be from June 1, 2010 to June 30, 2010.
Declaration shall be submitted (preferably through e-tax board) and sales tax shall be paid by 20th date of the month following the quarter. Thus the first term of submission of declaration and payment of sales tax is July 20, 2010.
Sales tax shall be paid to the bank account of TCB. Upon payment of sales tax the same reference number shall be used as for the payment of state taxes.
10. Counseling in the issues of sales tax of the City of Tallinn:
Tallinn City Enterprise Board
11. In order to check, if the company has been entered into the register of economic activities, go to the link http://mtr.mkm.ee/, searches, entrepreneur search. Entries into the register of economic activities are made by the local district government on the basis of the place of business of the company.
12. Contact data of local district governments are available at the link
13. It is also recommended to visit the homepage of Tallinn, http://www.tallinn.ee, sales tax, where also several frequently asked questions can be found.
14. Companies operating in the area of activity subject to special requirements must register themselves in the register of economic activities. Special requirements to the areas of activity are established by the law. There are many areas of activity requiring registration.
Should you need any assistance with Tallinn Sales Tax issues in your business, or with any other accounting services, please feel free to contact us at +372 684 1404, firstname.lastname@example.org