Taxes

  • What is VAT and VAT number?

Glad you asked! VAT (Value Added Tax) is a specific kind of consumption tax, applied to the sale of goods and services.

Now, VAT Number is the unique number that identifies a taxable person (business) or non-taxable legal entity that is registered for VAT.

Many companies face stringent VAT compliance requirements as they commence cross-border trading. Whether providing goods and services across international borders, or shipping products abroad to an overseas warehouse or fulfillment center, providing digital services to other businesses and consumers, they likely have a VAT number. But is not neccesarely Estonian VAT number.

You need one? Go to our E-Store and fill the VAT application form.

We are happy to provide more detailed and personalized information when you’re already running your business with us. To register as a Sunny Business costumer, please contact our agents at (corporate@sunnybusiness.ee).

  • What is VAT with limited liability?

A company liable to VAT with limited liability shall pay VAT only on goods and/or services acquired from an entrepreneur of a foreign country which are subject to reverse charge in Estonia, and goods imported to Estonia. A person taxable with limited liability is not entitled to the right to deduct input value added tax.

  • When is a company subject to registration for VAT with limited liability?

A company is subject to registration as a liable to VAT with limited liability (hereinafter: a VAT payer with limited liability), if a company is not registered as a VAT payer but purchases goods from another VAT payer of the other EU Member State the taxable value of which exceeds 10,000 euros as calculated from the beginning of a calendar year or receives certain services from a foreign person engaged in business who is not registered as a VAT payer in Estonia.

The difference between a VAT payer and a VAT payer with limited liability lies in the fact that a VAT payer with limited liability pays value added tax only on the intra-EU acquisition of goods and on receiving the services from a foreign person engaged in business.

A VAT payer with limited liability does not charge VAT from goods sold or services provided, and it does not have the right to deduct input value added tax either.

The obligation to register as a VAT payer with limited liability shall be effective as of the date of receiving following services:

  1. grant of the use of intellectual property or transfer of the right to use intellectual property;
  2. advertising services;
  3. services of consultants, accountants, lawyers, auditors and engineers, translation services, as well as data processing or the supplying of information;
  4. financial services, except for leasing safes, or insurance services, including reinsurance and insurance intermediation services;
  5. allowing use of manpower;
  6. the hiring or leasing of or establishment of a usufruct on movables, except means of transport;
  7. electronic communications services, including assignment of rights to use transmission lines;
  8. electronically supplied services;

... and some other services listed in subsection 10 (5) of the Value-Added Tax Act.

A company is required to submit an application for registration oneself as a VAT payer with limited liability to the Tax and Customs Board within three working days as of the date on which the obligation arises.

We are happy to provide more detailed and personalized information when you’re already running your business with us. To register as a Sunny Business costumer, please contact our agents at (corporate@sunnybusiness.ee).

 

  • Do I need an Estonian VAT Number?

If you are looking for global expansion and have discovered the benefits and opportunities of new markets with your e-residency company, then yes!

But firstly we suggest you to please take into consideration the following:

Your company Estonian taxable annual sales reaches +40,000€

If most part of the company’s activities or products are being delivered, stored and/or sold in Estonia. If no, it’s most likely you will not become a VAT number liable in Estonia.

Your goods are sold to other businesses in EU and you pay VAT to EU suppliers.

You need to apply for VAT number in the countries where you have warehouses, fulfilment services (countries where the products are physically stored and the turnover is created) or suppliers.

E.g.: If you are using U.K. and French warehouses, you need to obtain VAT number in U.K. and France.

Before you reach distance selling threshold, you need to obtain the VAT number of the country where the threshold is exceeded. If you haven't obtained VAT number by right time, you will be obliged to pay away the VAT amount on your sales turnover, despite that you probably did not charge VAT from your customers.

You need one? Go to our E-Store and fill the VAT application form.

We are happy to provide more detailed and personalized information when you’re already running your business with us. To register as a Sunny Business costumer, please contact our agents at (corporate@sunnybusiness.ee).

  • Who issues a VAT number?

Only tax administrations offices have the right to issue a VAT number, but since the process may be complicated and time consuming we are happy to assist you in reviewing trading details and file the on-line application, for you to get VAT number within 5-10 days.

You need one? Go to our E-Store and fill the VAT application form.

We are happy to provide more detailed and personalized information when you’re already running your business with us. To register as a Sunny Business costumer, please contact our agents at (corporate@sunnybusiness.ee).

  • Does the same VAT number apply for E.U. all countries?

No, every country issues its own VAT number and every VAT identification number must begin with the two-letter country code followed by 2 to 13 other characters.

E.g. – EE for Estonia, ES for Spain or IN for India). VAT number country list format.

More about VAT in general

More about VAT on digital services

More about VAT on selling outside of EU

More about VAT on selling within EU

Info about corporate taxes