Changes in Estonian Value Added Tax Act
On 20th of May 2014 the President of the Republic of Estonia Toomas Henrik Ilves proclaimed law (493 UA) for changing the current Value Added Tax Act with adding an annex to the VAT return declaration.
The purpose of the amendment is to decrease the possibilities to hide revenue, to improve the competition conditions and to increase tax receipt by decreasing the possibility of violation of Value added Tax Act.
The annex includes information of the legal person, self-employed person, state and local government institution to whom the invoice is issued, also from whom the afore mentioned persons have received invoices and registration codes of the cooperation partner in Estonia, in case of notaries and bailiff their personal identification code.
Invoices what are marked with 20 % VAT or 9 % VAT will be added to the VAT return declaration, if the total amount(s) of the invoice(s) without VAT are on the taxation period for one cooperation partner at least 1000 euro. The aforementioned limit will be calculated separately on purchase and sales invoices per cooperation partner.
Invoices that are presented to natural person (who is not self-employed person) will not be added to VAT return declaration. Therefore depersonalized invoices in retail industries will not be added as an annex to VAT return declaration e.g. if the buyer has not informed the seller to issue the invoice to the company’s name it will be considered as depersonalized sell and the information of the invoice will not be shown on the VAT return declaration annex.
The legislator has set transition period for the companies for making IT changes in the companies bookkeeping systems and the law will be effective starting from 1st of November 2014.
Kati Kruut, lawyer of the Gencs Valters Law Firm in Tallinn.
Practising in fields of Value Added Tax and Employment Law .
T: +372 61 91 000
F: +372 61 91 007