WHAT IS A VAT NUMBER?

The VAT (value-added tax) is a type of tax applied to the consumption and/or the sale of goods and services. In Estonia, VAT is 20%. The intra-community VAT number is a unique code that identifies a taxable company.

Many companies face strict VAT compliance requirements when they start operating abroad. Whether they provide goods and services across international borders, ship products abroad to an offshore warehouse or fulfillment center, or provide digital services to other businesses and consumers, they are likely to have a VAT number.

 

WHAT IS IT FOR?

The VAT number helps track the amount of tax your business pays and collects (input and output VAT) through purchases and sales (expenses and income). It also is necessary for the following:

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• Helps identify customers' tax status and tax place

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• For B2B purchase/sale (Reverse Charge or Reversible Change mechanism),

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• To complete the VAT return form (Make sure to include your VAT number on all your tax receipts and invoices).

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DOES MY COMPANY NEED TO HAVE A

VAT NUMBER?

If your company meets the following prerequisites, then yes:

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• You buy goods or services from other companies in the E.U. (such as Facebook advertising, Google Ads, or other digital services

 

• You sell physical products to customers (B2B and/or B2C) within the E.U.

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• At least part of the production, transit, storage, or distribution of your goods or services is managed from Estonia

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• You sell services such as development, design, consulting, marketing, etc., to other companies (B2B) in the E.U. and earn more than €40,000 a year

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• You sell digital services (SaaS/SaaP) to European customers (B2B and/or B2C)