Käibemaksuseadus (KMS)

§ 1. Object of taxation

(1) The following is the object of value added tax:

1) supply created in Estonia, except supply which is exempt from tax;

2) import of goods into Estonia (§ 6), except imports which is exempt from tax (§ 17);

3) provision of service where the place of supply is not Estonia (subsections 4 and 5 of § 10 and subsection 6 of § 10¹), except exempt supply;

4) supply of goods or services specified in subsection 3 of § 16 of this Act where the person liable to value added tax (hereinafter taxable person) has added value added tax to the taxable value of such goods or services;

5) intra-Community acquisition of goods (§ 8), except exempt intra-Community acquisition of goods (§ 18).

(2) Value added tax is applied as tax on added value, except for special cases arising from this Act.

§ 2. Definitions

(1) In this Act, terms related to countries and territories are used as follows:

1) “Estonia” means the territory under the jurisdiction of the Republic of Estonia;

2) „Community” means the territory of the Member States specified in clause 3 of this subsection;

3) “Member State” means the territory of a Member State of the European Union (hereinafter the Union) in accordance with point 2 of Article 5 and Article 7 of Council Directive 2006/112/EC on the common system of value added tax (OJ L 347, 11.12.2006, pp 1-118);

4) “foreign state” means a state or a territory under the jurisdiction thereof, with the exception of Estonia;

5) “third country” means a state or a territory under the jurisdiction thereof which is not considered a Member State for the purposes of clause 3 of this subsection.

(2) For the purposes of this Act, “business” means the independent economic activity of a person (§ 3), in the course of which goods are transferred or services provided, regardless of the purpose or results of that activity. The professional activities of a notary and an enforcement agent are also deemed to be business. Provision of services between a company and its permanent business establishment is not deemed to be business. The activities of a state, municipal and city agency and a legal person in public law are deemed to be business only where such an authority or person engages in economic activities listed in Annex I to Council Directive 2006/112/EC, or where their activities involve such transactions and acts listed in subsection 1 of § 1 of this Act which may also be performed by other taxable persons and where non-taxation would lead to significant distortions of competition.

(3) In this Act, the terms “goods” and “services” are used in the following meaning:

1) goods are things, animals, gas and electricity, heat and cooling energy. Immovable property is considered to be immovable property for the purposes of the General Part of the Civil Code Act, the right of superficies and utility network or facility for the purposes of the Property Law Act, a building as a movable property for the purposes of the Law of Property Act Implementation Act and the apartment ownership and apartment building right for the purposes of the Apartment Ownership and Apartment Associations Act. Construction land is considered to be such immovable property for the purposes of the General Part of the Civil Code Act, on which there is no building, except for utility network or facility, and which is planned for construction in accordance with the design requirements, detailed spatial plan or special spatial plan of the state or local authority or for which a building notice has been submitted or the intended purpose of the cadastral unit of which is over 50 per cent residential land or commercial land or both jointly. Data media with standard software or standard information that are freely available to all purchasers and are intended to perform the same functions are also deemed to be goods;

2) “goods to be installed or assembled” are goods which are transferred and installed or assembled by or on behalf of the transferor in another Member State and in the case of which the cost of installation or assembly exceeds 5 per cent of the taxable value of the transaction;

3) “services” means the provision, in the course of business activities, of benefits or the transfer of a right, including a security, which is not goods according to clause 1 of this subsection, and obligation to refrain from economic activity, to waive the exercise of a right or to tolerate a situation for a charge. Software and information transmitted by electronic means, and data media carrying software or information that are especially compiled or adjusted according to the purchaser’s specifications are also services.

(3¹) For the purposes of this Act, call-off stock is goods transported to another Member State, taking account of all of the following requirements:

1) the goods are transported by the taxable person to another Member State for the purpose of transferring the goods there within twelve months as of their arrival to a person who is registered in that other Member State in accordance with an agreement entered into between taxable persons;

2) the person to whom the goods are transported for transfer is registered as a taxable person in the Member State where the goods are transported and that person and the number of registration as a taxable person issued thereto in that Member State are known to the taxable person transporting the goods;

3) the taxable person who is transporting the goods to another Member State does not have a registered office or permanent business establishment in the other Member State to which the goods are supplied;

4) the taxable person keeps records of goods transported to another Member State in accordance with the procedure established based on subsection 5 of § 36 of this Act;

5) the taxable person presents the details of the acquirer of goods transported to another Member State in the report on intra-Community supply.

(4) For the purposes of this Act, the following are “electronically supplied services”:

1) transfer of the online environment;

2) web administration;

3) remote maintenance of the program and device;

4) transfer and renewal of electronically transmitted software;

5) electronically transmitted images, text and information and enabling the use of an electronic database;

6) electronically transmitted music, films and games, including gambling;

7) electronically transmitted political, cultural, sporting, scientific and entertainment broadcasts;

8) electronic distance learning and other services similar to the services specified above.

Where the provider of a service and the recipient of the service communicate electronically, this does not itself mean that the service is deemed to be an electronically services provided.

(5) “Transfer” means the transfer of the possession of goods together with the risk of accidental loss of the goods and the right to dispose of the goods and enjoy the economic benefits related to the goods as an owner, regardless of the status of the goods relating to property law. For the purposes of this Act, “transfer” also means the transfer of goods based on a commission contract and the handing over of goods based on such a transaction in which the transfer of the ownership of goods to the contractual user of the goods is provided upon expiry of the contract.

(6) “Self-supply” means the transfer without charge by a taxable person of goods forming part of the business assets of their company and provision of a service without charge, as well as the use, without charge, of goods forming part of the business assets by the taxable person themselves, their employee, servant or member of the management or control body for personal purposes or for purposes other than business. Use of an automobile for purposes other than business is not deemed self-supply, except in the cases specified in clauses 3 and 4 of subsection 4 of § 30 of this Act. The transfer or use of goods in the abovementioned cases is deemed to be self-supply where the taxable person has deducted input value added tax on the goods or a part of the goods from its calculated value added tax in full or in part.

(7) For the purposes of this Act, “new means of transport” means:

1) a vessel exceeding 7.5 metres in length which is transferred within three months as of the date of first entry into service or which has sailed for less than 100 hours, except a sea-going vessel specified in clause 3 of subsection 3 of § 15 of this Act;

2) aircraft with a take-off weight exceeding 1,550 kilograms which is transferred within three months as of the date of first entry into service or which has flown for less than 40 hours, except an aircraft specified in clause 4 of subsection 3 of § 15 of this Act;

3) a motorised land vehicle with the engine capacity exceeding 48 cubic centimetres or with the engine power exceeding 7.2 kilowatts, which is transferred within six months as of the date of first entry into service or having run less than 6,000 kilometres.

(8) “Triangular transaction” means a transaction for the transfer of goods between taxable persons in three different Member States where all the following requirements are met:

1) a taxable person in the first Member State (hereinafter the transferor in the triangular transaction) transfers goods to a taxable person in the second Member State (hereinafter the reseller in the triangular transaction), who then transfers the goods to a taxable person in the third Member State (hereinafter the acquirer in the triangular transaction);

2) the goods are transported from the first Member State to the third Member State to the acquirer in the triangular transaction;

3) the reseller in the triangular transaction is not registered in the third Member State as a taxable person or a taxable person with limited liability;

4) the acquirer in the triangular transaction pays value added tax on the acquisition of goods in the triangular transaction.

(9) ”Intra-Community distance selling” means the transfer and delivery of goods, other than a new means of transport or goods to be installed or assembled, by or on behalf of a transferor to another Member State to a person who is not registered in that Member State as a taxable person or a taxable person with limited liability. Intra-Community distance selling also takes place where the transferor of the goods indirectly intervenes in the transport of goods specified in this subsection to another Member State to a person who is not registered there as a taxable person or a taxable person with limited liability.

(9¹) “The distance selling of goods imported from a third country” is the transfer and delivery of goods, other than a new means of transport or goods to be installed or assembled, by or on behalf of the transferor from a third country to a person established in the Community, who is not registered as a taxable person or a taxable person with limited liability. The distance selling of goods imported from a third country also takes place where the transferor of the goods indirectly intervenes in the delivery of the goods specified in this subsection from a third country to a person established in the Community who is not registered as a taxable person or a taxable person with limited liability.

(10) For the purposes of this Act, “investment gold” means a gold bar or a gold plate of a weight approved on the bullion markets, with the pure gold content of at least 995 thousandths by weight, and a gold coin minted after 1800 and is or has been in circulation as an official means of payment, with the pure gold content of at least 900 thousandths by weight and a sales price not exceeding the price of gold contained in the coin by more than 80 per cent on the over-the counter market.

(11) “Intermediation” is the activity of a taxable person on behalf of and on account of another person. In order to act on behalf of and on account of another person, at least the following requirements must be met:

1) the intermediary and the transferor or acquirer of the goods or the provider or recipient of the service have entered into a contract for the intermediation of the goods or service;

2) the transferor of the goods or provider of the service is liable for the transfer of goods or provision of service;

3) the goods are transferred or the service is provided at a price established or approved by the transferor of goods or the service provider under the terms and conditions established for the recipient of their goods or service;

4) only the commission fee is reflected in the accounts of the intermediary as supply of the intermediary;

5) where the invoice is issued to the recipient of the goods or services, it is issued by the transferor of goods or service providers or by another person, including an intermediary, on behalf of the transferor of the goods or service providers..

(12) For the purposes of this Act an “automobile” means a vehicle of category M1 with a gross weight not exceeding 3,500 kilograms and with no more than eight registered offices in addition to the driver’s registered office.

(13) For the purposes of this Act, a “voucher” is an instrument where the transferor of goods or service provider is required to accept it as consideration or part of consideration for the supply of goods or services and where the goods to be transferred and services to be provided or the identities of the transferor of the goods or the service provider are indicated on the voucher itself or in the related documentation, including the terms of and conditions for use of such voucher. An instrument that gives the right to receive a discount upon the acquisition of goods or receipt of services, but which does not give the right to acquire goods or receive services, is not considered a voucher. A voucher is deemed to be single purpose where the place of supply of the goods or services related to the voucher (§§ 9, 10 and 10¹) and the amount of the value added tax due on the goods or services are known at the time of issue of the voucher. A voucher is deemed to be multipurpose where, at the time of issue, the place of supply of the goods transferred or provision of service or the collectable value added tax is not known.

§ 3. Taxable person and tax liability

(1) A taxable person is a person, including a legal person in public law or a state, rural municipality or city agency (hereinafter person), who is engaged in business and is registered or required to register as a taxable person (§ 19). The person is a natural person or a legal person, including a legal person in public law or a state, rural municipality or city agency. A taxable person of a foreign state or another Member State is a person, including a pool of assets or association of persons without the status of a legal person, who is treated as a person liable to value added tax according to the legislation of the state concerned.

(2) A person liable to value added tax with limited liability (hereinafter taxable person with limited liability) is a person, except a natural person not engaged in business, who is registered or required to register as a taxable person with limited liability (§ 21). A taxable person with limited liability of another Member State is a person, including a pool of assets or association of persons without the status of a legal person, who is registered for taxation with value added tax in that Member State and whose tax liabilities correspond to the tax liabilities of a taxable person with limited liability.

(3) A taxable person or taxable person with limited liability must pay value added tax as of the date of registration as a taxable person or taxable person with limited liability.

(3¹) A foreign taxable person is not deemed to be an Estonian taxable person due to their permanent business establishment located in Estonia and engaged in business where the foreign person does not participate in a transaction or act subject to taxation through their permanent business establishment located in Estonia.

(4) A taxable person must calculate value added tax on the transactions and acts specified in subsection 1 of § 1 of this Act and, in the case of supply specified in clause 1 of subsection 1 of § 1 of this Act, the taxable person must pay value added tax on the following:

1) supply subject to taxation (hereinafter taxable supply);

2) services received from a foreign person engaged in business who is not registered as a taxable person in Estonia and who has no permanent business establishment in Estonia through which the person engages in business in Estonia;

;

3) acquisition of goods to be installed or assembled in Estonia from a person of another Member State engaged in business who is not registered as a taxable person in Estonia and who has no permanent business establishment in Estonia through which the person engages in business in Estonia;

4) acquisition of goods as the acquirer in a triangular transaction;

5) the acquisition of goods not listed in clauses 3 and 4 of this subsection from a foreign person engaged in business who is not registered as a taxable person in Estonia and who has no permanent business establishment in Estonia through which the person engages in business in Estonia;

6) from another taxable person on the acquisition of goods listed in subsection 2 of § 41¹ of this Act.

(5) A taxable person with limited liability must pay value added tax on acts specified in clauses 2 and 5 of subsection 1 of § 1 of this Act and acts listed in clauses 2–5 of subsection 4 of this section.

(6) The following must also pay value added tax:

1) a debtor for the purposes of Regulation (EU) No 952/2013 of the European Parliament and of the Council laying down the Union Customs Code (OJ L 269, 10.10.2013, pp 1–101) (hereinafter Customs Code);

2) a person not registered as a taxable person, on transactions concerning which the person has issued an invoice or other sales document in which the amount of value added tax is indicated;

3) a person who is not registered as a taxable person or taxable person with limited liability, except the person specified in subsections 1 and 2 of § 39 of this Act who acquires a new means of transport from another Member State;

4) a person who is not registered as a taxable person or taxable person with limited liability who acquires alcohol, tobacco product or fuel, except for the purposes of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (hereinafter excise goods) from another Member State, except a natural person who acquires excise goods for personal use.

5) the owner of the goods upon the termination thereby of the tax warehousing (§ 44¹) of the goods without transfer of the goods. This provision does not apply in cases where a person was the owner of the goods already at the time of placing the goods in the tax warehouse, except where the goods were stored at a tax warehouse following the domestic supply, import or intra-Community acquisition of the goods, and the goods were not transferred during the storing at the tax warehouse.

6) the owner of excise goods under excise suspension arrangement upon taking thereby the excise goods out of the excise warehouse without the transfer of excise goods, except upon transporting the excise goods from one excise warehouse to another. This provision is not applied where a person was the owner of the excise goods already at the time of placing the excise goods into the excise warehouse, and the excise goods have not been transferred in the excise warehouse. Where the excise goods under excise suspension arrangement being taken out of the excise warehouse have also been placed in a tax warehouse, clause 5 of this subsection is applied.

(7) A taxable person and a taxable person with limited liability do not have to pay the value added tax based on subsections 4 and 5 of this section on goods acquired or services received from a person of another Member State engaged in business, where the person of that other Member State applies tax exemption based on the arrangement provided in subsection 1¹ of § 19 of this Act and their registration number contains suffix "EX".

§ 4. Supply

(1) The following is supply:

1) the transfer of goods and provision of service in the course of business activities;

2) the self-supply of goods or services;

3) the transport of goods to another Member State without transfer for the purposes of their business there (clause 3 of subsection 1 of § 7).

4) the expropriation of goods for a charge.

(1¹) The transfer of a single-purpose voucher by a person acting on their own behalf is treated as the transfer of goods or provision of service related to the voucher. When a single-purpose voucher is transferred by a person acting on behalf of another person, the transfer of such voucher is treated as the transfer of the goods or provision of services related to voucher by another person on whose behalf the person who has transferred the voucher is acting.

(1²) If a person enables, within the meaning of the Consumer Protection Act, the distance selling of goods imported from a third country through an online marketplace in consignments with an actual value not exceeding EUR 150, the person holding the online marketplace shall be deemed to have acquired and transferred these goods by itself. For the purposes of this Act the actual value is understood within the meaning defined in Commission Delegated Regulation (EU) 2015/2446 supplementing Regulation (EU) No 952/2013 of the European Parliament and of the Council as regards detailed rules specifying certain provisions of the Union Customs Code (OJ L 343, 29.12.2015, p. 1-557).

(1³) Where a person enables, through an online marketplace, the goods in the Community of a taxable person whose company has a registered office in a third country and who does not have a permanent business establishment in the Community, to be transferred to a person who is not registered as a taxable person or a taxable person with limited liability, the person holding the online marketplace is deemed to have acquired and transferred those goods by themselves.

(2) The following is not deemed to be supply:

1) the transfer of an enterprise or part thereof for the purposes of the Law of Obligations Act.

2) where the owner takes goods out of Estonia without the transfer thereof, except in the case provided in clause 3 of subsection 1 of this section;

3) granting the use of state assets without charge for the purposes of the State Assets Act and privatisation of state, rural municipality or city assets;

4) handing over the assets to another company, non-profit association or foundation in the course of the merger, division or transformation of companies, non-profit associations or foundations n;

6) handing over, in business interests, goods without charge as product samples not for sale or handing over goods the taxable value of which does not exceed 10 euros for advertising purposes;

8) granting the use of a passenger car used for business purposes for a charge to an employee, servant or member of the management or controlling body of a taxable person, except in the cases specified in clauses 3 and 4 of subsection 4 of § 30 of this Act.

§ 5. Export of goods

(1) The export of goods means the following:

1) the transfer of Union goods by the transferor of the goods or foreign acquirer of the goods with the transport of the goods to a destination outside the customs territory of the Union;

2) the re-export of non-Union goods placed under the temporary importation customs procedure with partial relief from import duties from the Union customs territory;

3) the re-export of non-Union goods placed under the inward processing customs procedure from the Union customs territory, or the delivery as take-away supplies, spare parts, accessories or consumption supplies on board a vessel or aircraft bound for a third country;

4) the transfer of goods exported from the Union customs territory under the outward processing procedure and the discharge of the procedure for the goods;

5) the transfer of goods with its transport by the transferor of the goods or foreign acquirer of the goods to a third country which is part of the customs territory of the Union.

(2) The transfer of goods to a third country natural person for transportation to the third country in the baggage with which the person is travelling may also be treated as the export of goods, where all of the following criteria are met:

1) the natural person is resident in the third country;

2) the sales price of the goods transferred to a person by the same taxable person at the same point of sale on the same date, together with value added tax, exceeds 38 euros;

3) the purchaser takes the goods in unopened packaging out of the Community not later than by the end of the third month following the month of transfer of the goods;

4) the taxable person has a document with the confirmation of the customs or the Police and Border Guard Board certifying that the purchaser has taken the goods out of the Community.

(3) The procedure for treating the goods transferred to a third country natural person as exports is established by a regulation of the minister in charge of the policy sector.

(4) The transfer of goods to a passenger bound for a third country only at sales facilities located in the passenger zone of an airport open for international passenger traffic is also treated as the export of goods.

(5) The export of goods is certified by the documents in proof of taking the goods out of the Community and transfer of the goods. The tax authority has the right to request additional documents in proof of the export of goods.

(6) The procedure for treating the goods transferred at sales facilities located in the passenger zone of an international airport as exports is established by a regulation of the minister in charge of the policy sector.

§ 6. Import of goods

(1) The import of goods means the following:

1) the placing of non-Union goods under the customs procedure of release for free circulation or the temporary importation customs procedure with partial relief from import customs duties;

2) the placing of goods covered by the outward processing procedure under the customs procedure of release for free circulation;

3) other cases which result in a customs debt for the purposes of the Customs Code.

(2) The placing of non-Union goods under the customs procedure of release for free circulation is not deemed to be import where it:

1) was preceded by the placing of the goods under the temporary importation procedure with partial relief from import customs duties;

2) is directly followed by the transport of the goods to a third country which is a part of the customs territory of the Union, and the goods are to remain under customs supervision until they are carried out of Estonia.

(3) The import of goods takes place in Estonia where the goods are placed under the customs procedures specified in subsection 1 of this section in Estonia or where otherwise a customs debt is incurred and the goods have been transported to Estonia.

(4) The transport of goods with Union customs status from a third country which is part of the Union customs territory is also deemed to be import of goods in Estonia.

§ 7. Intra-Community supply of goods

(1) Intra-Community supply of goods means the following:

1) the transfer of goods to a taxable person or taxable person with limited liability of another Member State together with the transport of the goods from Estonia to another Member State, except in the cases specified in subsection 2 of this section;

2) the transfer of excise goods or a new means of transport to a person of another Member State together with the transport of the goods or means of transport from Estonia to another Member State;

3) the transport of goods from Estonia to another Member State for their business activities there, including the transfer of goods between a company and its permanent business establishment located in another Member State, except in the cases specified in subsection 2 of this section;

4) transfer of goods transported from Estonia to another Member State as call-off stock.

(2) The following are not deemed to be intra-Community supply of goods:

1) temporary transport of goods from Estonia to another Member State for the provision of services there, including the transport of a movable to another Member State for hiring or leasing of the movable or establishment of a usufruct on the movable;

2) temporary transport of goods from Estonia to another Member State for up to twenty-four months for purposes which comply with the purposes of implementing the temporary importation procedure with total relief from import duties;

3) the transport of a movable from Estonia to another Member State for work with the movable, including for repair, evaluation, processing or assembly (hereinafter work with movable) where, after the provision of the service, the movable is returned to the taxable person in Estonia who transported the movable to the other Member State;

4) the transfer of goods to be installed or assembled in another Member State;

5) intra-Community distance selling of goods from Estonia to another Member State;

6) delivery of goods, including goods for consumption and sale on board, to a vessel or aircraft specified in clauses 3 or 4 of subsection 3 of § 15 of this Act;

7) the transport of goods from Estonia to another Member State for the purpose of taking them out of the Community where the goods are placed under the customs procedure of export in Estonia and the goods are taken out of the Community within two months as of the delivery of the goods to another Member State;

8) the transfer of goods to the acquirer in a triangular transaction;

9) the transport of natural gas or electricity, heating or cooling energy transmitted through network from Estonia to another Member State;

10) the transport of goods from Estonia to another Member State where the goods are transported to Estonia temporarily for up to twenty-four months for a purpose which complies with the purposes of implementing the temporary importation procedure with total relief from import duties;

11) the transport of a movable from Estonia to another Member State where the movable had been transported to Estonia temporarily for the purpose of work with the movable;

12) the transport of call-off stock from Estonia to another Member State;

13) the transport of the call-off stock from Estonia to another Member State, where it has not been disposed of within twelve months as of the arrival of the call-off stock in another Member State, and where it has been returned to Estonia within the specified period;

14) the transport of the call-off stock from Estonia to another Member State where its acquirer is replaced by another taxable person within twelve months as of the arrival of the call-off stock in another Member State.

(3) Where the grounds for a transaction or act specified in subsection 2 of this section cease to exist, the transaction is deemed to constitute an intra-Community supply of goods in accordance with subsection 1 of this section and the intra-Community supply of goods is deemed to have been created on the date on which the grounds cease to exist.

(3¹) Where the call-off stock transported from Estonia to another Member State is not disposed of within twelve months as of the arrival of the call-off stock in the other Member State, the intra-Community supply of goods is deemed to have been created on the next day following the expiry of twelve months in accordance with clause 3 of subsection 1 of this section, except in the cases specified in clause 13 of subsection 2 and subsection 3 of the same section

(4) Intra-Community supply of goods is certified by documents certifying the transfer of the goods and the transport of the goods to another Member State.

§ 8. Intra-Community acquisition of goods

(1) Intra-Community acquisition of goods is the acquisition of goods from a taxable person of another Member State together with the transport of these goods from another Member State to Estonia and the acquisition of a new means of transport from a taxable person of another Member State together with the transport of that means of transport from another Member State to Estonia, except in the cases specified in subsection 3 of this section.

(2) Intra-Community acquisition of goods also includes the transport of goods used for business purposes from another Member State to Estonia for the business activities in Estonia, except in the cases specified in subsection 3 of this section.

(3) The following are not deemed to be intra-Community acquisition of goods:

1) temporary transport of goods to Estonia for the provision of services, including the transport of a movable to Estonia for it to be hired or leased;

2) temporary transport of goods to Estonia for up to twenty-four months for purposes which comply with the purposes of implementing the temporary importation procedure with total relief from import duties;

3) temporary transport of a movable to Estonia for the purpose of work with the movable except where the movable is transported to Estonia for the purpose of taking the movable out of the Community;

4) the acquisition of goods to be installed or assembled in Estonia from a taxable person of another Member State;

5) intra-Community distance selling of goods to Estonia from another Member State;

6) the acquisition of goods, except a new means of transport, by a natural person for personal use;

7) the acquisition of goods by a person not registered as a taxable person for a total amount not exceeding the threshold specified in subsection 2 of § 21 of this Act;

8) the acquisition of second-hand goods, original works of art, collectors' items or antiques from a taxable person of another Member State, who applies the procedure for the calculation of taxable value provided in § 41 of this Act when calculating their tax liabilities in another Member State;

9) the acquisition of goods by the acquirer in a triangular transaction.

10) the transport of natural gas or electricity, heating or cooling energy transmitted through a network from another Member State to Estonia;

11) the transport of goods from another Member State to Estonia for the purpose of taking them out of the Community, where the goods are placed under the customs procedure of export in the other Member State and the goods are taken out of the Community within two months as of the transport of goods to Estonia;

12) the transport of goods to Estonia where the goods are transported to another Member State temporarily for up to twenty-four months for a purpose which complies with the purposes of implementing the temporary importation procedure with total relief from import duties;

13) the transport of a movable from another Member State to Estonia where the movable had been transported from Estonia to another Member State temporarily for the purposes of work with the movable property;

14) the transport of call-off stock to Estonia.

(4) Where the grounds for an act specified in subsection 3 of this section cease to exist, the act is deemed to constitute intra-Community acquisition of goods in accordance with subsection 1 of this section and the intra-Community acquisition of goods is deemed to have been effected on the date on which those grounds cease to exist.

(5) Intra-Community acquisition of goods also includes the acquisition of goods from a taxable person of another Member State where the taxable person uses their number of registration as a taxable person in Estonia when acquiring the goods and where the goods are transported from the Member State of the transferor to another Member State, except where the taxable person proves that:

1) value added tax on the intra-Community acquisition of goods is paid in the Member State to which the goods were transported, or

2) the taxable person was the reseller in a triangular transaction.

(6) Intra-Community acquisition of goods also includes the acquisition of goods transported to Estonia as call-off stock.

(7) Where the call-off stock transported to Estonia is not disposed of within twelve months as of the arrival of the goods in Estonia, such goods are deemed to have been acquired within the Community on the next day following the expiry of twelve months in accordance with subsection 2 of this section, except where the goods have been returned within that period to the Member State from which they were dispatched.

§ 9. Place of supply of goods

(1) The place of supply of goods is Estonia where:

1) the goods are transferred or made available to the recipient in Estonia in another manner, are exported from Estonia, intra-Community supply of goods is effected or goods are imported to a recipient located in Estonia on condition that the goods are taxed under special arrangements for imposing value added tax on distance selling of goods imported from a third country, except in the case specified in subsection 2 of this section;

3) a person of another Member State engaged in business transfers goods to be installed or assembled, and installs or assembles them in Estonia or such goods are installed or assembled in Estonia on behalf of the person;

4) the goods, including goods consumed or sold on board, are transferred on board a vessel or aircraft departing on an international route from Estonia.

5) natural gas or electricity, heating or cooling energy is transferred through a network to a reseller who is an Estonian taxable person located in Estonia;

6) natural gas or electricity, heating and cooling energy transmitted through a network is transferred to the acquirer of the goods who uses the goods in Estonia. Where the acquirer of the goods does not use all or part of the goods, the unused goods are still deemed to be goods used in Estonia where the acquirer of the goods has a registered office or permanent business establishment in Estonia for which the goods were transferred. This provision does not apply in the case provided in clause 5 of this subsection.

7) goods taxed under special arrangements for imposing value added tax on the resale of second-hand goods, original works of art and collectors’ items and antiques or on the sale of second-hand goods, original works of art, collectors' items and antiques at a public auction are transferred from Estonia to another Member State by intra-Community distance selling.

(2) The place of supply of goods is not Estonia where the taxable person:

2) transfers goods and installs or assembles the goods in another Member State.

3) transfers natural gas or electricity, heating or cooling energy transmitted through: a network to a reseller or another person of another Member State who does not use the goods in Estonia.

4) transfers the goods taxed under special arrangements for imposing value added tax on the resale of second-hand goods, original works of art and collectors’ items and antiques or under special arrangements for imposing value added tax on the sale of second-hand goods, original works of art, collectors' items and antiques at a public auction by intra-Community distance selling from another Member State to Estonia.

(3) For the purposes of clause 5 of subsection 1 and clause 3 of subsection 2 of this section, "reseller" means a person engaged in business who mainly transfers the natural gas or electricity, heating and cooling energy acquired thereby and who uses such goods for own purposes only to an insignificant extent.

(4) Where the same goods are transferred for several consecutive times and such goods are transported by the taxable reseller or a taxable reseller of another Member State from one Member State to another from the first transferor of goods directly to the last acquirer in the chain of transactions, only the transfer of goods to such reseller is treated as intra-Community supply of goods. Intra-Community acquisition of goods is created for the specified reseller in the Member State to which the goods are transported. The provision does not apply in the cases provided in subsection 5 of this section and subsections 1² and 1³ of § 4 of this Act.

(RT I, 23.02.2021, 1 – entry into force 01.07.2021]

(5) Where the reseller participating in the chain of transactions, who delivers the goods from one Member State to another directly from the first transferor in the chain of transactions to the last acquirer in the chain of transactions, has notified the transferor of the goods of their number of registration as a taxable person in the Member State from where the goods were dispatched, only the transfer of goods by such reseller is deemed to be the intra-Community supply of goods in the chain of transactions. The intra-Community acquisition of goods is created for the acquirer of goods from the specified reseller in the Member States to which the goods are transported. The provision is not applied in the cases specified in subsections 1² and 1³ of § 4 of this Act.

(RT I, 23.02.2021, 1 – entry into force 01.07.2021]

§ 10. Place of supply of services

(1) The place of supply of services is Estonia where the services are provided to a taxable person or taxable person with limited liability registered in Estonia or where the services are provided through a registered office or permanent business establishment located in Estonia to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business, except in the cases specified in subsections 2, 4 and 5 of this section.

(2) The place of supply of services is Estonia where:

1) the services are related to immovable property located in Estonia, including construction, valuation and maintenance, and services for the transfer of immovable property, for preparing and co-ordinating construction works and accommodation services are provided;

2) a cultural, artistic, sports, educational, scientific or entertainment services or services related to a trade fair or exhibition is provided in Estonia to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third-country person engaged in business except where the service is provided by streaming or otherwise virtually. The service also includes the organisation of the relevant event and provision of ancillary services;

2¹) an entrance service to a cultural, artistic, sports, educational, scientific or entertainment event or a trade fair or exhibition or an ancillary service related to the entrance service is provided in Estonia to a taxable person or taxable person with limited liability of another Member State or to a third-country person engaged in business except where the participation in the specified events is virtual;

3) passenger transport services, including the transport of personal luggage and personal means of transport of the passengers, is provided in Estonia;

4) restaurant and catering services are provided in Estonia, except in the cases provided in clause 5 of this subsection and clause 5 of subsection 4 of this section;

5) restaurant or catering services are provided during the passenger transport services taking place within the Community territory on board of such a vessel or aircraft that departs on an international route from Estonia.

6) the means of transport is hired or leased or a usufruct is established thereon in Estonia on a short-term basis;

6¹) the means of transport is hired or leased or a usufruct is established thereon to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business and whose registered office or place of residence is in Estonia, except in the cases provided in clauses 6 and 6² of this subsection and clause 4¹ of subsection 4 of this section;

6²) pleasure or recreational craft is hired or leased or a usufruct is established thereon in Estonia to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business and the service provider’s registered office or permanent business establishment is in Estonia, except in the cases provided in clause 6 of this subsection;

7) work is performed with an item of movable property located in Estonia or the item of movable property located in Estonia is valued and the services specified in this clause are provided to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business;

8) services for the transport of goods are provided in Estonia, including the transport of the means of transport related to the transport of goods, or such transport of goods is organised to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business. This provision does not apply in the cases provided in clause 9 of this subsection and clause 6 of subsection 4 of this section.

9) services for the transport of goods are provided from Estonia to another Member State, including the transport of the means of transport related to the transport of goods or such transport of goods is organised to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business;

10) ancillary services related to the transport of goods are provided in Estonia to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business;

11) a transaction or other act where the place of supply is Estonia is mediated and the intermediation service is provided to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business.

(4) The place of supply of services is not Estonia where:

1) services related to immovable property located in a foreign state, including construction, valuation and maintenance, and services for the transfer of immovable property, for preparing or coordinating construction works, and accommodation services are provided;

2) a cultural, artistic, sports, educational, scientific or entertainment service or a service related to a trade fair or exhibition is provided in a foreign state to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third-country person engaged in business, except where the service is provided by streaming or otherwise virtually. The services also include the organisation of the relevant event and the provision of ancillary services.

2¹) an entrance service to a cultural, artistic, sports, educational, scientific or entertainment event or a trade fair or exhibitions or an ancillary service related to the entrance service is provided in a foreign state to a taxable person or taxable person with limited liability of another Member State or to a third-country person engaged in business, except where the participation in the specified events is virtual;

3) work is performed with movable property located in a foreign state or movable property located in a foreign state is valued and the services specified in this clause are provided to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business;

4) passenger transport services related to the transport of passengers, including the transport of their personal luggage and personal means of transport, is provided outside Estonia;

4¹) the means of transport is hired or leased or a usufruct is established thereon in a foreign state on a short-term basis;

4²) the means of transport is hired or leased or a usufruct is established thereon to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business and whose registered office or place of residence is in a foreign state, except in the cases provided in clauses 4¹ and 4³ of this subsection and clause 6 of subsection 2 of this section;

4³) pleasure or recreational craft is hired or leased or a usufruct is established thereon in a foreign country to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business and the service provider’s registered office or permanent business establishment is in a foreign state, except in the cases provided in clause 4¹ of this subsection;

RT I, 27.03.2012, 7 – entry into force 01.01.2013]

5) restaurant or catering services are provided during the passenger transport taking place in the Community territory on board of such a vessel or aircraft or in a train that is departing on an international route from another Member State;

5¹) restaurant or catering services are provided in a foreign state, except in the cases provided in clause 5 of this subsection and clause 5 of subsection 2 of this section.

6) services are provided for the transport of goods from another Member State to Estonia or outside Estonia, including the transport of the means of transport related to the transport of goods, or such transport of goods is organised to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business;

7) ancillary services related to the transport of goods are provided outside Estonia to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business;

8) a transaction or act where the place of supply is not Estonia is mediated and the intermediation service is provided to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States or who is not a third country person engaged in business;

9) services are provided in the cases not specified in clauses 1–8 of this subsection and subsection 2 of this section through registered office or permanent business establishment in Estonia to a taxable person or taxable person with limited liability registered in another Member State or to a third country person engaged in business.

(5) The place of supply is not Estonia where a taxable person provides to a third country person not engaged in business the following services:

1) grant of use of intellectual property or transfer of the right to use intellectual property;

2) advertising services;

3) c onsulting, accounting, legal, auditing, engineering, translation, data processing or information services;

4) financial services, except for leasing safes, or insurance services, including reinsurance and insurance intermediation services;

5) giving labour to use;

6) the hiring or leasing of or establishment of a usufruct on movable property, except the means of transport;

7) electronic communications service for the purposes of the Electronic Communications Act (hereinafter electronic communications service), including assignment of the right to use transmission lines;

8) electronically provided services;

9) enabling access to natural gas or electricity, heating and cooling energy network connections, and transmission of natural gas or electricity, heating or cooling energy through networks and services directly related thereto;

10) transfer of greenhouse gas emission allowance regulated by the Atmospheric Air Protection Act;

11) refraining from the services specified in clauses 1–10 of this subsection, waiving the exercise of a right or tolerating a situation for a charge.

(6) For the purposes of this section, “means of transport” means a vehicle, aircraft, vessel or other means of transport with a code in the Combined Nomenclature (hereinafter CN-code) established by Council Regulation No 2658/87/EEC on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 256, 7.09.1987, pp 1-675) whose first two digits are 86, 87, 88 or 89.

(7) For the purposes of this section, a means of transport, except a vessel, is deemed to have been hired or leased, or a usufruct is deemed to have been established thereon on a short-term basis where the service is provided within a period not longer than thirty calendar days. A vessel is deemed to have been hired or leased, or a usufruct is deemed to have been established thereon on a short-term basis where the service is provided within a period not longer than ninety calendar days.

(8) Ancillary services related to the transport of goods are the loading, unloading, handling and warehousing of goods within the framework of transport, as well as insurance, preparation and obtaining of documents relating to goods and the completion of customs formalities.

§ 10¹. Place of supply of intra-Community distance selling and of electronic communications service and electronically provided services to person who is not registered as taxable person or taxable person with limited liability in any Member State

(1) The place of supply of intra-Community distance selling is Estonia where the goods are transferred and transported from another Member State by or on behalf of the transferor to Estonia to a person who is not registered as a taxable person or a taxable person with limited liability.

(2) The place of supply of services is Estonia where the electronic communications service or the services provided electronically are provided to a person, established or residing in Estonia, who is not registered as a taxable person or a taxable person with limited liability in any of the Member States.

(3) The place of supply specified in subsections 1 and 2 of this section is not Estonia where the following requirements are complied with:

1) the goods are transferred or the service is provided by a foreign person who has a registered office or permanent business establishment in only one Member State, except in Estonia;

2) the goods are transferred and transported to a Member State other than the Member State of the registered office or permanent business establishment of the transferor of the goods or the service is provided to a person who is not a taxable person or a taxable person with limited liability in any of the Member States, who has a registered office or residence in a Member State other than the Member State of the registered office or permanent business establishment of the service provider;

3) the supply of the goods and services in compliance with the requirements specified in this subsection did not exceed 10,000 euros in total in the previous calendar year and does not exceed that amount in the current calendar year;

4) the person specified in clause 1 of this subsection has not defined the Member State of the registered office or residence of the recipient of the service or where the goods are transported as the place of supply specified in clause 3.

(4) Where the total supply of goods and services specified in subsection 3 of this section of a person of another Member State exceeds 10,000 euros in a calendar year, subsection 1 or 2 is applied as of the date of supply created in the amount specified.

(5) The place of supply of intra-Community distance selling is not Estonia where the goods are transferred and transported from Estonia by or on behalf of the transferor to another Member State to a person who is not registered as a taxable person or a taxable person with limited liability.

(6) The place of supply of services is not Estonia where the electronic communications service or the electronically provided services is provided to a person holding a registered office or residence in another Member State, who is not registered as a taxable person or a taxable person with limited liability in any of the Member States.

(7) The place of supply specified in subsections 5 and 6 of this section is Estonia where the following requirements are met:

1) the transferor of goods or service provider does not have a registered office or permanent business establishment in a Member State other than Estonia;

2) the goods are transferred and transported to another Member State or service is provided to a person holding a registered office or residence in another Member State, who is not registered as a taxable person or as a taxable person with limited liability in any of the Member States;

3) the supply of the goods and services complying with the requirements specified in this subsection did not exceed 10,000 euros in total in the previous calendar year and does not exceed 10,000 euros in the current calendar year.

(8) Upon compliance with the requirements specified in subsection 7 of this section, the transferor of goods or service provider may determine the place of supply of goods or services based on subsections 5 and 6 for at least two calendar years.

(9) Where the total supply of goods and services specified in subsection 7 of this section of a person exceeds 10,000 euros in the current calendar year, subsections 5 and 6 are applied as of the date of supply in the amount specified.

(10) This section is not be applied to the intra-Community distance selling of the goods taxed under special arrangements for imposing value added tax on the resale of second-hand goods, original works of art and collectors’ items and antiques or of the goods taxed under special arrangements for imposing value added tax on the sale of second-hand goods, original works of art and collectors’ items and antiques at a public auction.

§ 11. Time of supply, import of goods, receipt of services, intra-Community acquisition of goods and acquisition of goods by person holding online marketplace

(1) The time of supply or the time of receipt of services is deemed to be the date on which one of the following acts is performed first:

1) the goods are dispatched or made available to the purchaser, or the services are provided;

2) receipt of partial or full payment for the goods or services, receipt of partial of full payment upon receiving the service;

3) in the case of self-supply, the transfer of goods or provision of services or putting the goods of an enterprise into service by a taxable person themselves or an employee, servant or a member of the management or controlling body of the person or for other purposes not related to business.

(2) The intra-Community supply of goods is deemed to have occurred or the goods are deemed to have been acquired within the Community on the fifteenth date of the month following the month in which the goods were dispatched or made available to the purchaser or on the date on which an invoice is issued for the goods where the invoice is issued prior to the fifteenth day of the month following the month in which the goods were dispatched or made available to the purchaser, except in the cases provided in subsections 3 and 3¹ of § 7 and subsections 4 and 7 of § 8 of this Act.

(2¹) The supply of single-purpose voucher-related goods or services is created upon the date of transfer of the voucher to the extent of the value of the voucher or before transfer of the voucher upon receipt of the partial or full payment for the voucher to the extent of the portion paid. Upon the transfer of a single-purpose voucher on behalf of another person, the supply is created for the person on whose behalf the voucher is transferred to the extent of the portion paid on the day when the voucher-related goods are transferred or the service is provided or upon the receipt of partial of full payment for the voucher where it occurs prior to the transfer of the voucher-related goods or provision of service.

(3) Where, according to subsection 1 of this section, the time of supply is the time at which partial of full payment is received or made for the goods or services, the supply is deemed to have been effected in the amount of the portion paid. Receipt of a targeted support for the transfer of goods or services for a price lower than their usual value is not considered as receipt of payment for the goods or services.

(4) A service whose provision continues for longer than the tax period is deemed to have been provided and received during the tax period in which the provision of the service terminates. In the case of the provision of services or regular transfers of goods to the same purchaser, the time of dispatch or making the goods available to the purchaser or the time of provision or receipt of the service is deemed to be the tax period in which the period for which the invoice is submitted or during which payment for the goods or services received has been agreed ends, but not later than after the expiry of 12 calendar months. Where the services are provided over a period longer than one year, and in such a case a tax liability arises for the recipient of the services, the supply is deemed to have been created or the service received on 31 of December each calendar year as of the commencement of the provision of the services where the payment has not been made for the services and the provision of the services has not been terminated within the period.

(5) Where some of the acts specified in subsection 1 of this section are performed before the obligations of a taxable person (§ 24) arise, the taxable person is required to calculate value added tax on the taxable value of the transaction only where the goods are dispatched or made available to the purchaser or the services are provided during the period of validity of the obligations specified above.

(6) Upon the import of goods, in the cases specified in clauses 1 and 2 of subsection 1 of § 6 of this Act, the time of supply is the date of release of the goods for the purposes of the Customs Code or, in the cases specified in clause 3 of subsection 1 of § 6 of this Act, the date on which the customs debt is incurred and, in the case specified in subsection 4 of § 6 of this Act, the date on which the goods are transported to Estonia.

(7) The supply of such reusable packaging on which a deposit has been established in accordance with the Packaging Act, and which is not included in the taxable value of the goods, and which is not returned to the taxable person within a calendar year is deemed to be created on 31 December. The supply is equal to the total amount of the deposits for reusable packaging not returned during a calendar year.

(8) In the cases specified in subsections 1² and 1³ of § 4 of this Act, goods are deemed to have been acquired and supply created by a person who holds an online marketplace upon payment for the goods or receipt of a confirmation of payment obligation or payment authorization notice.

§ 12. Taxable value of supply, intra-Community acquisition of goods and services received

(1) The taxable value of supply and the taxable value of the intra-Community acquisition of goods and services received consists of the sales price of the goods or services and everything else which is deemed to be a fee that the transferor of the goods or the provider of the services has received or receives from the purchaser of the goods, recipient of the services or a third party for the goods or services. This provision does not apply to cases specified in subsections 3, 6, 7¹, 10, 13 and 14 of this section.

(1¹) The taxable value of the goods or service which are paid for by a multipurpose voucher is the consideration paid for the voucher or, in the absence of any information thereof, the monetary value indicated on the voucher or related documents and everything else treated as a fee, which the transferor of the goods or service provider has received or receives for the goods or services from the purchaser of the goods or recipient of services or the third party.

(2) Grants allocated to a taxable person for the transfer of goods or services for a price lower than their usual value is included in the taxable value. The procedure for including grants in taxable value and for the taxation thereof is established by a regulation of the minister in charge of the policy sector.

(3) In the case of the transfer of goods without charge and intra-Community acquisition of goods without charge as well as the transport of goods to another Member State which is deemed to be intra-Community supply (clause 3 of subsection 1 of § 7), the taxable value is the value determined based on the acquisition cost of goods or other similar goods, or in the absence thereof, based on the cost price, the value determined during the performance of the abovementioned acts.

(6) In the case of self-supply, the taxable value is the acquisition cost or, in the absence thereof, the cost price of the goods or services, except in the case provided in subsection 7¹ of this section.

(6¹) Taxable value also includes other amounts, including accessory expenses, fees and taxes, except value added tax payable in Estonia or a foreign state that the transferor of the goods or the service provider requires from the acquirer of the goods or the recipient of the services in relation to the transaction.

(7¹) Where self-supply consists of the granting of use of a lorry of the employer with a gross weight not exceeding 3,500 kilograms for the purposes of the Traffic Act or, in the cases specified in clauses 3 and 4 of subsection 4 of § 30 of this Act, granting of the automobile of the employer for use for activities unrelated to work, professional or service duties or the business of the employer, the taxable value of the specified supply, including the value added tax, is the price of a fringe benefit calculated based on the Income Tax Act.

(8) Taxable value does not include price discounts allowed to the purchaser where such discounts are applied for commercial purposes at the time of selling the goods or providing the services. Interest payable upon the transfer of the goods is also not included in the taxable value of the supply of the goods.

(9) Taxable value does not include the amounts received from the purchaser of goods or the recipient of services as repayment for expenses incurred on behalf of and on the account of them, which are reflected in the interim account in accounting. Proof of the actual amount of the expenditure must be furnished. A taxable person may not deduct input value added tax included in the expenses paid out in the name of and on the account of the purchaser of goods or the recipient of services.

(10) The taxable value of a factoring service is the contract fee and the fee for handling the accounts.

(11) The value of reusable packaging specified in subsection 7 of § 11 of this Act is not included in the taxable value of goods where the taxable person does not transfer the reusable packaging.

(12) Deposits assigned to packaging in accordance with the Packaging Act are not included in the taxable value of goods.

(13) Upon termination of the tax warehousing of goods or the transport of excise goods under excise suspension arrangement out of the excise warehouse without transfer of the goods (clauses 5 and 6 of subsection 6 of § 3), the taxable value of supply is the purchase price or the cost price of the goods, or the usual value of the goods where this is lower than the purchase price or cost price. Only in justified cases may the taxable value of goods be lower than the value of the goods entered in the warehouse stock at the time of placing such goods in the tax warehouse or excise warehouse.

(14) Where goods are transferred or services provided to a related person for the purposes of the Income Tax Act, the taxable value is the market value where the fee payable for the transfer of the goods or provision of the services is:

1) lower than the market value and the acquirer of the goods or the recipient of the services has no right for deduction of input value added tax in full;

2) lower than the market value and the transferor of the goods or the provider of the services has no right for deduction of input value added tax in full and the transfer of the goods or the provision of the service is exempt supply;

3) higher than the market value and the transferor of the goods or the provider of the services has no right for deduction of input value added tax in full.

(15) Subsection 14 of this section is applied to prevent tax evasion or tax avoidance. The specified subsection is also applied in the case of intra-Community acquisition of goods.

(16) For the purposes of this Act, “market value” means the total amount that the acquirer of the goods or the recipient of the services should pay under the terms of free competition for the acquisition of the goods and the receipt of the services at the same marketing stage, where the goods are transferred or the services provided, to an independent transferor of the goods or service provider in a Member State where the transfer of the goods or the provision of the services is taxed.

(17) Where no comparable transfer of goods or provision of services is found, the market value is:

1) in the case of goods an amount that is not lower than the acquisition cost of the goods or similar goods or, in the absence thereof, the cost price thereof, which is determined during the transfer of the goods or the provision of the services;

2) in the case of services an amount that is not lower than the total cost of the taxable person in the provision of the services.

§ 13. Taxable value of imported goods

(1) The taxable value of imported goods, except in the cases specified in subsections 3–6 of this section, is comprised of the customs value of the goods according to the Customs Code and all duties payable upon import (hereinafter import duties), as well as the costs of the service for the transport of goods, service for the organisation of the transport of goods and ancillary services related to the transport of goods, not included in the customs value, up to the first destination in the territory of Estonia and costs related to the delivery of the goods to another destination in the Community, where this place is known at the time of import.

(2) The first place of destination in the territory of Estonia is the place indicated on the accompanying documents or other documents based on which the goods are imported. Where this is not indicated, the first loading place in the territory of Estonia is deemed to be the first place of destination.

(3) Where a passenger imports goods in excess of the duty-free cost limit, the taxable value of the imported goods is comprised of the purchase price of the goods and all import duties. The purchase price is proven by the passenger based on the payment documents.

(3¹) The taxable amount of an imported consignment with an actual value not exceeding 150 euros, which is sent directly from a third country to a consignee in the Community, is the actual value of the goods contained in the consignment, transport, insurance and other expenses related to import of goods where they are not included in the actual value of the goods and are indicated separately on the sales document of the goods or other document relating to the import of goods, and all the import charges. The taxable value of the consignment is certified based on payment documents.

(3²) Where the payment documents specified in subsections 3 and 3¹ of this section are missing and no other documents certifying the taxable value of the goods are submitted to the customs authorities or the customs authorities have reasonable doubts that the declared taxable value does not include the amount actually paid for the goods, the customs value is determined using methods specified in Article 74 of the Customs Code. Where the customs value determined in accordance with Article 74 of the Customs Code exceeds 150 euros, the provisions of subsection 1 of this section are applied upon determining the taxable value of the consignment.

(4) Where the goods transported into the customs territory are imported after being placed under special arrangements, the taxable value of the imported goods is not, in general, less than the taxable value of the imported goods would have been upon the import directly after having been conveyed into the customs territory. Where a lower taxable value is declared upon import of goods which have been placed under special arrangements, the customs authorities act according to the provisions of Article 140 of Commission Implementing Regulation (EU) 2015/2447 laying down detailed rules for implementing certain provisions of Regulation (EU) No 952/2013 of the European Parliament and of the Council laying down the Union Customs Code (OJ L 343, 29.12.2015, pp 558–893). When the requirements laid down in Articles 69-76 of the Customs Code and Articles 127-146 of Commission Implementing Regulation (EU) 2015/2447 are fulfilled and the justification of the decrease in value satisfies the customs authorities, the customs authorities accept the declared taxable value. Where the justification of the decrease in taxable value does not satisfy the customs authorities, the customs authorities determine the customs value in accordance with Article 74 of the Customs Code.

(5) In the case of the import of goods covered by the outward processing procedure into the Union by the person who exported the goods from the Union, the taxable value is comprised of the value added during such processing and the loading, packing, transportation and insurance costs added to the value of the goods, including all import duties. Under the standard exchange system, the taxable value of the replacement product is determined in accordance with the provisions of subsection 1 of this section and it may not be less than the taxable value of the exported goods.

(6) Upon delivery of the goods into Estonia from a third country which is part of the Union customs territory (subsection 4 of § 6), the taxable value of the goods is determined in accordance with the provisions of § 12 of this Act.

(7) The tax established by this Act is not included in the taxable value of imported goods

§ 14. Taxable value of exported goods

(1) In the case of export, the taxable value of the goods is determined in accordance with the provisions of § 12 of this Act but, in the case of the transfer of goods for a price higher than their usual value, the usual value of the goods is deemed to be the taxable value of the goods.

(2) Upon the re-export of goods brought to Estonia under the inward processing customs procedure or upon prior export of products produced from equivalent goods under the authorisation for inward processing, the value of goods imported for processing, or the value of equivalent goods is not included in the taxable value.

§ 15. Value added tax rates

(1) The rate of value added tax is 24 per cent of the taxable value, except in the cases provided in subsections 1¹–4 of this section.

(1¹) The rate of value added tax is 13 per cent of the taxable value of accommodation or accommodation with breakfast, except for goods or service accompanying this service.

(2) The rate of value added tax on the following goods and services is 9 per cent of the taxable value:

1) books and educational literature, both on a physical medium and electronically, excluding learning materials specified in clause 6 of subsection 1 of § 16 of this Act;

2) medicinal products, contraceptive preparations, sanitary and toiletry products and medical devices intended for the personal use of disabled persons for the purposes of the Medical Devices Act and technical aid for the purposes of the Social Welfare Act which are specified in the list established by a regulation of the minister in charge of the policy sector and the grant of use of such medical devices to disabled persons;

5) a press publication, both on a physical medium and electronic, except a publication that mainly publishes advertising or private advertisements or that mainly has erotic or pornographic content or video or music content.

(3) The rate of value added tax is zero per cent of the taxable value of the following goods:

1) exported goods, excluding the cases where the supply of such goods is exempt from tax in accordance with § 16 of this Act;

2) goods where their transfer and transport to another Member State or transport to another Member State without transfer is deemed to be intra-Community supply of goods;

3) sea-going vessels navigating in international waters, except pleasure craft used for purposes other than business, and equipment, spare parts, fuel and other supplies used on such sea-going vessels and goods to be transferred to passengers for consumption on board, except goods to be taken away, sold on board of sea-going vessels during passenger transport in Union waters;

4) aircraft used by an air carrier operating mostly on international routes and equipment, spare parts, fuel and other supplies used on such aircraft and goods to be transferred to passengers for consumption on board, except goods to be taken away, sold on board of such aircraft during intra-Community passenger transport;

5) goods transferred and transported to another Member State to a diplomatic representative, a consular agent (except an honorary consul), a representative or representation of a special mission or an international organisation recognised by the Ministry of Foreign Affairs, headquarters of an international organisation, a diplomatic representation, a consular post, a special mission or a Union institution or an agency or body established under the Union law;

5¹) goods transferred to a Union institution located in Estonia or an agency or body established under the Union law on condition that the total value of the goods without value added tax makes up at least 53 euros in accordance with the invoice, except in the case of public utility services and fuel for the purposes of the Liquid Fuel Act;

5²) goods transferred to the European Commission or to an agency or body established under the Union law in the performance of the tasks under the Union law in response to a COVID-19 pandemic, except where those goods are acquired for resale for consideration;

6) goods transferred and transported to another Member State intended for the performance of the duties of the armed forces of any other Member State or the civilian staff accompanying them where the specified armed forces take part in the defence activities, implementing the Union measures within the framework of the Common Security and Defence Policy, or to another Member State which is a Member State of the North Atlantic Treaty Organisation (hereinafter NATO) and intended for the performance of the duties of the armed forces of any other NATO Member State or the civilian staff accompanying them where these armed forces take part in the common defence activities, or to the International Military Headquarters.

6¹) goods transferred to international military headquarters located in Estonia, where the tax incentives are laid down in an international agreement ratified by the Riigikogu, or for the performance of the duties to the armed forces of a NATO Member State participating in the common defence activities, or to the armed forces of a Member State participating in the defence activities for implementation of the Union measures within the framework of the Common Security and Defence Policy, except Estonia, and the civilian staff accompanying them;

7) ]

8) non-Union goods placed under the customs procedure of customs warehousing, free zone, inward processing, transit or temporary importation with total relief from import duties or non-Union goods in temporary storage on the condition that the goods have not been unlawfully removed from customs supervision and have not been consumed or used in the cases other than those prescribed in the customs legislation for the purposes of the Customs Code;

9) Union goods transferred and transported to a free zone for export purposes and Union goods placed in a free zone, which are exported directly from the free zone within two months as of the transportation to the free zone;

10) gold transferred to Eesti Pank;

11) the goods specified in Annex V to Council Directive 2006/112/EC where the goods are immediately placed in a tax warehouse or have been placed in a tax warehouse (§ 44¹) and the transaction does not involve termination of tax warehousing. The provision does not apply to fuel released for consumption for the purposes of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act where the fuel has been placed in the excise warehouse.

12) excise goods under excise suspension arrangement placed in an excise warehouse where the transaction does not involve taking the goods out of the excise warehouse, except transporting the excise goods from one excise warehouse to another.

13) goods that are transferred in a canteen, cafeteria or mess of an international military headquarters under the condition prescribed in an international agreement ratified by Riigikogu.

14) goods the import of which is exempt from tax under the requirements provided for the application of customs duty relief in accordance with Commission Decision established based on Article 76 of Council Regulation (EC) No 1186/2009 setting up a Community system of reliefs from customs duty (OJ L 324, 10.12.2009, pp 23–57).

15) goods which are transferred to a person holding an online marketplace where the person is deemed to be the purchaser of the goods in accordance with subsection 1³ of § 4 of this Act.

(3¹) Clause 2 of subsection 3 of this section does not apply in the cases where the supply of these goods is exempt from tax in accordance with § 16 of this Act, or the purchaser of the goods, except new means of transport or excise goods, or the person transporting their goods to another Member State, does not have a valid number of registration as a taxable person or taxable person with limited liability issued in another Member State, or the supply of such goods is not reflected in the report on intra-Community supply of goods in accordance with § 28 of this Act.

(4) The rate of value added tax is zero per cent of the taxable value of the following services:

1) services where the place of supply is not Estonia, excluding cases where the supply of such services is exempt from tax in accordance with § 16 of this Act;

2) the provision of services necessary for the journey to passengers on board of a vessel or aircraft during the international transport of passengers;

3) the provision of port services to meet the needs directly related to servicing a vessel navigating international waters;

4) the provision of navigation services and airport services directly related to provision of service to aircraft used by an air carrier mostly operating on international routes;

6) the repair, maintenance, chartering, leasing or establishment of a usufruct of a sea-going vessel navigating in international waters, other than a pleasure craft used for pleasure or amusement unrelated to business, or aircraft used by an air carrier operating mostly on international flights, or the repair, maintenance, leasing or establishment of a usufruct on equipment used on such a seagoing vessel or aircraft;

7) intermediation service, where a transaction is mediated, the supply of which is created in a non-EU country, or the goods being mediated are specified in clauses 1, 3–6 and 10 of subsection 3 of this section, or the services being mediated are provided in clauses 2–4, 6, 9, 10, 12 and 14 of this subsection;

9) the service for the transport of goods, the service for the organisation of the transport of goods and ancillary services related to such transport of goods, where they are provided to a consignor or consignee, to transport goods outside the customs territory of the Union or to a third country which is part of the customs territory of the Union;

10) the service for the transport of goods, the service for the organisation of the transport of goods and ancillary services related to such transport of goods provided for the import of goods, except insurance services, and the service related to the transport of such goods to another destination located in the Community, where the cost of these services is included in the taxable value of the imported goods and they are provided to the consignor or consignee;

10¹) the service for the transport of non-Union goods to be sent or temporarily stored for the customs procedure specified in clause 8 of subsection 3 of this section, the service of organising the transport of goods and ancillary services related to such transport of goods, except insurance services, where they are provided to the consignor or consignee;

11) carriage of goods to the Azores or Madeira or from the Azores or Madeira to Estonia or another Member State;

12) work with an item of movable property which has been acquired from Estonia or brought to Estonia for the purpose of provision of such service and which is taken out of the Community after the service has been provided;

13) passenger transport service specified in clause 3 of subsection 2 of § 10 of this Act, including the transport of their personal luggage and personal means of transport, where the passenger transport service in Estonia constitutes part of international travel;

14) service provided to a person, representation, agency, special mission, Union institution or agency or body established under the Union law, armed forces or headquarters located in a foreign state and specified in clause 5 or 6 of subsection 3 of this section;

14¹) service provided to international military headquarters located in Estonia where the tax incentives are laid down in an international agreement ratified by the Riigikogu or to the armed forces specified in clause 61 of subsection 3 of this section and the civilian staff accompanying them for the performance of their duties.

14²) service provided to a Union institution located in Estonia or to an agency or body established under the Union law on condition that the total value of the service without value added tax makes up at least 53 euros in accordance with the invoice, except in the case of payments for public utility services and telecommunications services;

15) service that is provided by a canteen, cafeteria or mess of an international military headquarters under the condition prescribed in an international agreement ratified by Riigikogu.

16) service provided to the European Commission or to an agency or body established under the Union law upon the performance of the tasks assigned by the Union law in order to respond to the COVID-19 pandemic, except where the specified service is obtained for providing it to third parties for this fee;

(5) Provision of services with the zero per cent value added tax rate is certified by a contract concluded for the provision of such a service, a written order, invoice or other document in proof of the provision of the service. The tax authority has the right to request additional documents in proof of the provision of the service.

(5¹) In the cases specified in clauses 5–6¹ of subsection 3 and clauses 14–14² and 16 of subsection 4 of this section, the document in proof of the provision of a service with the zero per cent value added tax rate is a value added tax exemption certificate established by Council Implementing Regulation (EU) No 282/2011 laying down implementing measures for Directive 2006/112/EC on the common system of value added tax (OJL 77, 23.03.2011, pp 1–22).

(5²) In the cases specified in clauses 5¹, 5² and 6¹ of subsection 3 and clauses 14¹, 14² and 16 of subsection 4 of this section, the right of a Union institution or an agency or body established under the Union law located in Estonia and of the armed forces of a NATO Member State participating in common defence activities or of the armed forces of a Member State participating in defence activities for the implementation of Union measures within the framework of the Common Security and Defence Policy and of the accompanying civilian staff and of the international military headquarters to apply for the acquisition of goods or receipt of services with the zero per cent value added tax rate is approved on the value added tax exemption certificate, specified in subsection 5¹ of this section, by the minister in charge of the policy sector or an official authorised by the minister.

(6) Regardless of the provisions of clause 1 of subsection 3 of this section, tax exemption is applied instead of the zero per cent value added tax rate in the following cases:

1) export of similar goods replacing goods which were returned to Estonia after export for the purposes of the Customs Code where the goods to be replaced were returned to Estonia under a tax exemption based on subsection 2 of § 17 of this Act;

2) export of goods imported into Estonia under the zero per cent value added tax rate based on subsection 3 of this section or under a tax exemption based on § 17 of this Act.

(6¹) Regardless of the provisions of clause 1 of subsection 4 of this section, tax exemption is applied instead of the zero per cent value added tax rate to services where the place of supply is another Member State where, upon provision of the service, the taxable person uses the taxpayer identity number of another Member State.

(8) Where the requirements for applying the zero per cent value added tax rate provided in clause 5² of subsection 3 or clause 16 of subsection 4 of this section no longer apply, the European Commission, agency or body which acquired the goods or services taxed at zero per cent value added tax rate notify the tax authority thereof and where the requirements for taxation at zero per cent value added tax cease to exist, pay value added tax on the specified goods or services in accordance with the procedure and under the conditions established based on subsection 3 of § 39 of this Act.

§ 16. Exempt supply

(1) Value added tax is not imposed on the supply of the following goods and services of a social nature:

1) universal postal services for the purposes of the Postal Act and payment of state pensions, benefits, support and compensation in accordance with the procedure prescribed by the State Pension Insurance Act and Work Ability Allowance Act by mail;

2) health services for the purposes of the Health Service Organisation Act and the supply of an organ or tissue of human origin, human blood or blood product made from human blood and breast milk, as specified in the list approved by a regulation of the minister in charge of the policy sector;

2¹) services provided by dental technicians in their professional activities and dentures transferred by dentists or dental technicians;

3) services provided by a non-profit association to its members without charge or for a membership fee, and services provided by a non-profit association or foundation to natural persons relating to the use of sports facilities or sports equipment;

4) social services specified in §§ 8, 17, 20, 23, 26, 27, 30, 33, 41, 44, 45⁵, 45¹⁵, 56, 87, 91, 94, 97, 99¹, 100, 130¹ and subsection 3⁹ of § 156 and social services financed out of the budget of the state or local authority specified in § 45¹ of the Social Welfare Act;

5) services relating to the shelters for protection of children and young persons;

6) pre-school, basic, vocational, secondary and higher education, including learning materials transferred by the education service provider to the recipient of the services, private tuition relating to general education and other training, except other training services provided for business purposes;

7) transportation of sick, injured or disabled persons in vehicles which are specially designed for such purpose and which correspond to the requirements established based on the Traffic Act.

8) services provided by an independent association of persons to their members provided that the following requirements are met: the service is directly necessary for the main activity of the member, which is exempt from tax or is not subject to value added tax; the fee paid for the service does not exceed the costs incurred upon the provision of the service and the tax exemption of the service does not affect competition significantly.

(2) Value added tax is also not imposed on the supply of the following goods and services:

1) insurance services, including reinsurance and insurance mediation;

2) the leasing, renting or establishment of a usufruct on immovable property or parts thereof. Tax exemption is not applied to the provision of accommodation services and to renting, leasing and establishment of usufruct on multi-storey car parks and premises for parking vehicles, and to the rent or lease or establishment of a usufruct on permanently installed equipment or machinery or safes;

3) immovable property or part thereof. Tax exemption is not applied to the immovable property whose essential part is a building for the purposes of the Building Code or a part of a building and which is transferred before the initial use of the building or its part or for the first time within one year after the initial use, to the immovable property whose essential part is a significantly improved building or its part and which is transferred before re-commissioning of the building or its part following the improvement or for the first time within one year after re-commissioning, or building land. The building or its part has been significantly improved in case the expenses related to the improvements exceed at least ten per cent of the acquisition cost of the building or its part before the improvement;

4) a valid postal payment instrument of the Republic of Estonia where it is sold at their nominal value;

6) securities, except a greenhouse gas emission allowance for the purposes of subsection 1 of § 137 of the Atmospheric Air Protection Act and such securities or holdings, which grant their owners the right of ownership of the immovable property or part thereof specified in the second sentence of clause 3 of subsection 2 of this section or the right to use and dispose of them as the owner;

7) lottery tickets and organisation of gambling, except the organisation of commercial lotteries and the organisation of such games of skill the only possible prize of which is the possibility to participate again in the same game;

8) investment gold, services relating to the transfer of investment gold or entry into a corresponding transfer agreement, or services relating to the supply thereof which are provided by an agent acting in the name of and on the account of another person;

9) goods, upon the acquisition of which there was no right for deduction of input value added tax, except where the goods were acquired before the registration of the acquirer as a taxable person or where, at the time of acquisition of the goods, input value added tax had been deducted in part.

(2¹) Value added tax is not imposed on the supply of the following financial services:

1) deposit transactions for the receipt of deposits and other repayable funds from the public;

2) borrowing and lending operations, including consumer credit, mortgage credit and other transactions for financing business transactions;

3) leasing transactions;

4) payment services for the purposes of the Payment Institutions and E-Money Institutions Act, with the exception of transactions with commemorative coins for the purposes of Regulation (EU) No 651/2012 of the European Parliament and of the Council on the issuance of euro coins (OJ L 201, 27.07.2012, pp 135–137) or with commemorative coins of third countries (hereinafter commemorative coins) that are not investment gold;

5) issue and administration of non-cash means of payment, such as electronic payment instruments, electronic money, traveller’s cheques and bills of exchange;

6) guarantees and commitments and other transactions creating binding obligations to persons in future;

7) transactions on their own account and on account of clients in tradable securities provided in clauses 1–7 of subsection 1 of § 2 of the Securities Market Act and in foreign exchange and other money market instruments, including transactions in cheques, exchange instruments, certificates of deposit and other such instruments;

8) transactions and acts related to the issue and sale of securities specified in clause 7 of this subsection;

9) money broking;

10) negotiation services related to the services specified in clauses 1–9 of this subsection;

11) management of an investment fund as provided in the Investment Funds Act and another investment fund of a Contracting Party to the European Economic Area and subject to financial supervision, including the provision of fund management services to the fund in the event of the delegation of the duties of a fund manager.

(3) A taxable person who has notified the Tax and Customs Board in writing before the supply arises in the same tax period or earlier adds value added tax to the taxable value of the following goods and services::

1) the leasing, renting or granting usufruct of immovable property or parts thereof, except dwellings;

2) immovable property and parts thereof, except dwellings;

3) a service specified in clause 6 of subsection 2 and subsection 2¹ of this section, except where the service is provided to a taxable person or taxable person with limited liability of another Member State;

4) investment gold transferred to another taxable person by a taxable person who, in the course of their business, usually supplies gold for industrial purposes or by a taxable person who produces investment gold or transforms gold used for other purposes into investment gold, or services relating to such supply which are provided by an agent acting in the name of and on account of another person.

(4) Where a taxable person adds value added tax to the taxable value of services in accordance with subsection 3 of this section, such supply is taxed within at least two years as of the first tax period.

(5) Value added tax is not imposed on the supply of services, specified in subsections 1–2¹ of this section, which is deemed to constitute the supply of electronically services provided.

§ 17. Exempt import

(1) Value added tax is not imposed on the import of the following goods:

1) goods the supply of which is exempt from tax (§ 16);

2) gold imported by Eesti Pank;

3) banknotes and coins, with the exception of collector’s items, for the purposes of § 41 of this Act and commemorative coins that are not investment gold;

4) revenue stamps;

5) natural gas and electricity, heating and cooling energy imported through networks and gas pumped into natural gas networks by gas transport tankers;

6) goods subject to immediate tax warehousing;

7) alcohol and tobacco products transported from a third country to Estonia in the personal luggage of passengers within the limits and under the requirements of excise duty exemptions as provided in §§ 47 and 57 of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act;

8) goods of a non-commercial nature not specified in clause 7 of subsection 1 of this section that have been transported from a third country into Estonia in the personal luggage of a passenger in the amount of 300 euros and, in the case of using air and sea transport, except private pleasure flying or private pleasure seafaring, in the amount of 430 euros. Where the total value of the goods exceeds the aforementioned threshold, the value of the goods exceeding the threshold is subject to value added tax in full;

10) goods of a non-commercial nature, sent from one natural person to another natural person, with the value of up to 45 euros, alcohol or tobacco products to the extent and under the requirements of the thresholds exempt from excise duty as provided in the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act, up to 500 grams of coffee or 200 grams of coffee extract or essence and 100 grams of tea or 40 grams of tea extract or essence with the value of up to 45 euros per one consignment of goods of a non-commercial nature;

11) goods that are taxed in Estonia or another Member State under special arrangements for distance selling of goods imported from a third country, provided that the taxpayer identification number of a taxable person, a taxable person of another Member State, of a third country person engaged in business or an intermediary acting on their behalf issued for the implementation of special arrangements has been submitted to the tax authority at the latest upon submission of the import declaration.

12) fuel transported to Estonia from a third country within the scope and under the requirements of the thresholds exempt from excise duty provided in § 68 of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act.

(2) The import of goods specified in Council Regulation EC No 1186/2009 setting up a Community system of reliefs from customs duty (OJ L 324, 10.12.2009, pp 23–57), except the import of goods specified in Articles 23-27, 42, 44–52, 57, 58, in point a of subsection 1 of Article 67, point a of subsection 1 of Article 68 and Articles 107-111, and the import of goods specified in Division 6 of Chapter 2 of the Customs Code is not subject to value added tax under the requirements prescribed for application of exemption from customs duty. The import of goods specified in Subchapter 1 of Chapter 2 of Division 6 of the Customs Code is not subject to value added tax where the goods are reimported by the person who exported the goods. The import of goods specified in this subsection is not subject to value added tax also in the case of import as specified in subsection 4 of § 6 of this Act where it is in compliance with the requirements prescribed for application of customs duties exemption.

(2¹) Value added tax is not imposed on the import of goods upon placing non-Union goods under the customs procedure of release for free circulation, provided that the following requirements are met:

1) the importer of the goods or a customs agency acting as a representative thereof is an Estonian taxable person;

2) immediately after the goods have been imported, they are transported in the same condition to another Member State to a taxable person or a taxable person with limited liability of the other Member State;

3) intra-Community supply is created as a result of transport of the goods to another Member State;

4) upon import of goods, the importer of the goods or a customs agency acting as a representative thereof proves the intention to transport the goods to another Member State to a taxable person or a taxable person with limited liability registered by the other Member State and, after the goods have been transported, provides the customs authority with documentation in proof of the intra-Community supply of the goods;

5) a security is provided in order to secure the performance of the tax liability which may arise as a result of a failure to perform the requirements provided in this subsection. The security is provided and released, used and its amount is calculated in accordance with the procedure provided in the customs legislation.

(2²) Transport of the goods to a taxable person of another Member State by the customs agency representing the importer of goods is treated as the intra-Community supply of goods of the customs agency taking account of the requirements provided in clause 3 of subsection 2¹ of this section.

(3) Value added tax is also not imposed on the import of the following goods:

1) books, periodicals or other data media sent to a library, research, development or educational institution;

2) confiscated counterfeit goods which are transferred to a health care institution, social welfare institution or local authority in accordance with law.

§ 18. Intra-Community tax-free acquisition of goods

Value added tax is not imposed on the following:

1) intra-Community acquisition of goods the supply of which is exempt from tax (§ 16);

2) intra-Community acquisition of goods the import of which is exempt from tax (§ 17);

3) intra-Community acquisition of goods by a foreign taxable person where the requirements for the refund of value added tax provided in clauses 1–3 of subsection 1 of § 35 of this Act are met;

4) intra-Community acquisition of goods by a taxable person of another Member State in the case of a triangular transaction;

5) intra-Community acquisition of goods, where the goods are subject to immediate tax warehousing (§ 44¹).

§ 19. Obligation to register as taxable person

(1) In case the supply of a person for a calendar year provided in subsection 3 of § 19¹ of this Act where the place of supply is Estonia, exceeds 40,000 euros as of the beginning of the calendar year, an obligation arises for the person to register as a taxable person as of the day on which the specified amount of supply is created (hereinafter registration obligation). The registration obligation does not arise where all the taxable supply of the person consists of tax-free supply and the supply taxable at the zero per cent value added tax rate, except intra-Community supply of goods. The registration obligation arises for a person who is holding an online marketplace as of the day on which the taxable supply is created in the case provided in subsection 1³ of § 4 of this Act,.

(1¹) The registration obligation is not created in Estonia for a person from another Member State engaged in business in case the following requirements are complied with:

1) the supply of the person in the Community, including in the Member State of its establishment, for the calendar year as provided in subsection 3 of § 19¹ of this Act does not exceed 100,000 euros as of the beginning of the calendar year and did not exceed 100,000 euros in the previous calendar year either;

2) in the case of supply created in Estonia, the requirements for the creation of the registration obligation provided in subsection 1 of this section are not complied with;

3) the person has submitted a preliminary notice or an amendment to the previously submitted preliminary notice to the tax authority of their country of establishment for the implementation of the tax exemption in Estonia and has received a registration number with the suffix "EX" or, in case of the amendment of the preliminary notice a confirmation of the registration number, from the tax authority of the country of establishment.

(2) Where the data of the taxable person has been deleted from the register based on the application specified in subsection 1 of § 22 of this Act and the supply of the person specified in subsection 3 of § 19¹, which arises in Estonia, exceeds 40,000 euros in the same calendar year, the registration obligation arises again for the person as of the day on which the supply is created in the specified amount, except in the case of special rules provided in subsection 1 of this section.

(3) In case a foreign person engaged in business who does not have permanent business establishment in Estonia generates taxable supply where the place of supply is Estonia, but such supply is not subject to a tax in Estonia upon the acquisition of goods or receipt of services by a taxable person or taxable person with limited liability, the registration obligation arises for the person as of the date on which the taxable supply is created, except in the case provided in subsection1¹ of this section.. The registration obligation does not arise in case all the taxable supply of the person consists of supply taxable at the zero per cent value added tax rate, except where it is intra-Community supply of goods and the supply which is created upon the transfer of goods to a person holding online marketplace where the person is considered the acquirer of the goods in accordance with subsection 1³ of § 4 of this Act. The registration obligation does not arise for a taxable person of another Member State and a person from a third country engaged in business upon provision of service, intra-Community distance selling and transfer of goods through online marketplace where the person is registered in another Member State as the person implementing special arrangements for imposing value added tax on the transfer of goods through services, intra-Community distance selling and online marketplace and the specified supply is subject to taxation based on such special arrangements.

(3¹) Where a third country person holding online marketplace, whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community, generates a taxable supply in Estonia in the case specified in subsection 1³ of § 4 of this Act, but the person has not registered as a taxable person or as the person implementing special arrangements for imposing value added tax on the transfer of goods through a service, intra-Community distance selling or online marketplace, the person from whom they acquired the goods is jointly and severally with the person liable for payment of the value added tax with regard to the supply which has been created until the third country person is registered as a taxable person.

(4) Where the supply of goods and services, specified in subsection 3 of § 10¹ of this Act, of a taxable person of another Member State engaged in business exceeds 10,000 euros in total in the calendar year, the registration obligation arises for the person as of the date on which the supply reaches the specified amount, except in the case provided in section 1¹ of this section.

§ 19¹. Special procedure for small businesses

(1) In case the supply is created in another Member State, a person engaged in business established in Estonia does not have the obligation to register as a taxable person in that other Member State in case the person implements special arrangements for small businesses provided in this section (hereinafter in this section special arrangement). In order to implement special arrangements, a person submits a preliminary notice through an electronic portal on the website of the tax authority.

(2) Special arrangements are implemented where:

1) the supply of a person for the calendar year in the Community, including Estonia, does not exceed 100,000 euros in the current calendar year and did not exceed 100,000 euros in the previous calendar year;

2) the supply of a person for the calendar year in another Member State where the person wishes to implement tax exemption does not exceed in the current calendar year or did not exceed the in the previous calendar year or in two previous calendar years, where it is so provided in that Member State, the threshold established in that Member State for obtaining tax exemption for persons engaged in business activities there.

(3) The supply for a calendar year in the Community or in a Member State, including Estonia, according to the place where the supply is created, consists of the following supplies:

1) taxable supply of goods and services, including zero per cent taxable supply, except the transfer of fixed assets;

2) supply of real estate transactions (clauses 2, 3 and 6 of subsection 2 of § 16), except the transfer of fixed assets and occasional transactions;

3) supply of insurance services (clause 1 of subsection 2 of § 16) and financial services (subsection 2¹ of § 16), except occasional services.

(4) The preliminary notice specified in subsection 1 of this section contains at least the following information:

1) name, field of activity, legal form and address of the person;

2) a Member State or Member States where the person intends to implement tax exemption;

3) the total amount of supply in euros during the previous calendar year in each Member State, including Estonia;

4) the total amount of supply in euros during the current calendar year until the submission of the preliminary notice in each Member State, including Estonia;

5) in the case of a Member State, where a ban is applied on the implementation of special arrangements during two calendar years following the calendar year in which the supply threshold for the current calendar year is exceeded, the total amount of supply created during last calendar year but one in euros;

6) in the case of a Member State where several thresholds for the creation of the registration obligation are implemented, the total amount of supply specified in clauses 3–5 of this subsection in euros separately by goods and services.

(5) The person implementing special arrangements notifies through the electronic portal on the website of the tax authority of the change to the information in the preliminary notice submitted to the tax authority, including of the intention to implement the tax exemption in a Member State other than the one indicated in the preliminary notice and of the decision to terminate the implementation of the tax exemption in another Member State. The person implementing special arrangements does not have to provide data that is included in the information provided based on subsection 8 of this section.

(6) The tax exemption is implemented in another Member State in accordance with:

1) the preliminary notice submitted as of the date on which the tax authority notified the person of the registration number for the implementation of special arrangements, or

2) a change in the preliminary notice as of the date when the tax authority confirmed the validity of the registration number given to the person for the implementation of special arrangements after receiving a notice from the person about the change in the preliminary notice.

(7) Where the requirements provided for the implementation of special arrangements are complied with, the tax authority notifies the person of the registration number with the suffix "EX" or of the confirmation of the validity of the registration number electronically within 35 working days as of the submission of the preliminary notice or the amendment to the preliminary notice, except where the tax authority has notified the person of the extension of the deadline to carry out the necessary checks for the purpose of the prevention of tax evasion or avoidance of taxation.

(8) The person implementing special arrangements submits the following information on the website of the tax authority through the electronic portal for each quarter by the end of the month following the quarter:

1) the total amount of supply in euros, specified in clauses 1–3 of subsection 3 of this section, created in Estonia during the quarter, specified in clauses 1–3 of subsection 3 of this section, or mark "0" in case supply was not created;

2) the total amount of supply in euros, specified in clauses 1–3 of subsection 3 of this section, created in another Member State during the quarter, or mark "0" in case supply was not created;

3) in the case of a Member State where several thresholds for the creation of the registration obligation are implemented, the total amount of supply in euros, specified in clauses 1 and 2 of this subsection, separately by goods and services;

4) during the previous quarter after the submission of the preliminary notice, the total amount of the supply specified in clauses 1 and 2 of this subsection or the mark "0", in case supply was not created, where the preliminary notice was submitted before the quarter when the implementation of special arrangements started.

(9) In case the supply threshold in the Community for the current calendar year provided in clause 1 of subsection 2 of this section is exceeded, the person implementing special arrangements reports this on the website of the tax authority through the electronic portal within 15 working days as of the day when the supply threshold was exceeded and submits information about the supply as of the beginning of the current quarter until the supply threshold for the calendar year is exceeded.

(10) Where the supply specified in subsections 4 and 8 of this section is created in a currency other than euro, the exchange rate published by the European Central Bank on the first day of the calendar year is used to convert it into euros, or where the exchange rates have not been published for that day, the exchange rate of the next day of publication.

(11) The tax authority terminates the right of a person to implement special arrangements or changes for the person the extent of implementation of special arrangements where the person continues to implement special arrangements in another Member State, in the following cases:

1) the supply of the person exceeds the threshold provided in clause 1 of subsection 2 of this section;

2) another Member State, where the person implements special arrangements or has submitted a preliminary notice of the intention to implement, has announced that the person cannot implement the tax exemption in that Member State or its implementation has been terminated;

3) the person implementing special arrangements has notified on the website of the tax authority through an electronic portal of the termination of the implementation of special arrangements;

4) the person implementing special arrangements has announced on the website of the tax authority through an electronic portal that the person has terminated their activities, or the tax authority may presume this otherwise.

(12) The tax authority sends electronically the decision to terminate or change the implementation of special arrangements to the person implementing special arrangements. Where the requirements for the implementation of special arrangements are complied with, but the person has informed the tax authority of the termination of the implementation of special arrangements, the termination of the implementation of special arrangements takes effect on the first day of the quarter following the notification to the tax authority or, where the tax authority has been notified in the last month of the quarter, on the first day of the second month of the following quarter. Where the termination of the implementation of special arrangements is related to exceeding the threshold specified in clause 1 of subsection 2 of this section, the decision enters into force on the date of exceeding the threshold. In other cases, the termination of the implementation of special arrangements takes effect on the date specified in the decision.

(13) Where the supply in the Community for a calendar year of the person implementing special arrangements exceeds the threshold specified in clause 1 of subsection 2 of this section, the person cannot implement special arrangements during the calendar year following the exceeding of the threshold.

(14) Where the supply for the calendar year of a person implementing special arrangements exceeds the threshold specified in clause 2 of subsection 2 of this section in another Member State, the person cannot implement special arrangements in that Member State during the calendar year following the exceeding of the threshold or during two following calendar years where it is prescribed in the relevant Member State.

§ 20. Registration as taxable person

(1) A person is required to submit an application for registration as a taxable person to the tax authority within three working days as of the date on which the registration obligation arises. A person may submit an application for registration as a person liable to value added tax through the information system of the commercial register in a digitally signed form or apply to a notary for the preparation of an application and submission thereof through the information system of the e-notary.

(2) A person may submit an application for registration as a taxable person to the tax authority in the following cases:

1) the registration obligation has not yet arisen for the person on the basis of § 19 of this Act;

2) upon exempt intra-Community acquisition of goods;

3) upon export.

(3) The tax authority registers a person as a taxable person by entering the data concerning the person in the register of taxable persons (hereinafter registration) as at the date on which the registration obligation arose, within five working days as of the receipt of the application.

(4) Based on an application submitted in accordance with subsection 2 of this section, the tax authority registers the person as a taxable person within five working days as of the receipt of the relevant application either as at the date of receipt of the application or a later date as desired by the applicant.

(4¹) In order to be registered, the person must prove that they are engaged in business in Estonia or are about to commence business in Estonia. Where the proof provided concerning the person’s business or commencement of business is insufficient, the tax authority has the right to request that the person submit additional proof or collect such proof on its own initiative. The tax authority decides on registration within five working days as of the receipt of the proof. The tax authority does not register the person where the person is neither engaged in business nor about to commence business.

(5) The tax authority notifies the person about the decision on registration not later than on the working day following the date on which the decision is made.

(6) A person of a third country engaged in business who has no permanent business establishment in Estonia but with whose country of residence the Union has concluded a mutual assistance contract concerning administrative cooperation, the fight against fraud and the recovery of claims relating to the value added tax, or a person of another Member State engaged in business who has no permanent business establishment in Estonia has the right, upon registration as a taxable person, to appoint a tax representative specified in the Taxation Act, who has been approved by the tax authority. A person of a third country engaged in business who has no permanent business establishment in Estonia with whose country of residence the Union has not concluded a mutual assistance contract concerning administrative cooperation, the fight against fraud and the recovery of claims relating to the value added tax, is required, upon registration as a taxable person, to appoint a tax representative specified in the Taxation Act, who has been approved by the tax authority. The provision is not applied in the case specified in subsection 22 of § 43 of this Act.

(7) Upon submission of an application for registration, a natural person or the representative of a legal person or state, rural municipality or city agency must identify themselves. An authorised representative must additionally present a document certifying their authority.

(10) Where the tax authority has information indicating that the registration obligation has arisen for a person, but the person has not submitted a registration application on time, the tax authority registers the person on its own initiative as of the date on which the registration obligation arose. The tax authority notifies the person of the decision to register the person within three working days as of the date on which the decision is made.

(11) Where the tax authority ascertains after the registration of a taxable person that the application was submitted later than prescribed and the person should have commenced performance of the obligations of a taxable person (§ 24) before the date specified in the decision of the tax authority, the tax authority repeals its original decision retroactively, makes a new decision and registers the taxable person as of the date on which the registration obligation arose. The tax authority notifies the person of the decision to register the person within three working days as of the date on which the decision is made.

(12) The application form for registration of a person as a taxable person and the form of the decision of the tax authority concerning the registration of a taxable person are established by a regulation of the minister in charge of the policy sector.

§ 21. Registration as taxable person with limited liability

(1) For an Estonian person and a foreign person operating through a permanent establishment in Estonia, who receives the service specified in subsection 5 of § 10 of this Act from a foreign person engaged in business, who is not registered as a taxable person in Estonia, the obligation arises to register as a taxable person with limited liability as of the day of receipt of this service, except where the service is received from a person of another Member State engaged in business, who implements tax exemption based on the arrangement provided in subsection 1¹ of § 19 and whose registration number contains the suffix "EX". The provision is not applied to a taxable person or a natural person not engaged in business.

(2) Where the taxable value of the goods acquired by the person within the Community (§ 8), except excise goods and a new means of transport, exceeds 10,000 euros as of the beginning of the calendar year, the obligation to register as a taxable person with limited liability arises as of the day when the specified threshold is exceeded, except in the case provided in subsection 2¹ of this section. The calculation of the specified threshold does not include the acquisition of goods from a person of another Member State, who implements tax exemption based on the arrangement provided in subsection 1¹ of § 19 of this Act and whose registration number contains the suffix "EX". The provision is not applied to a taxable person or a natural person not engaged in business.

(2¹) Where a foreign person engaged in business who does not have a permanent establishment in Estonia, except a person from another Member State who implements tax exemption based on the arrangement provided in subsection 1¹ of § 19 of this Act, acquires goods within the Community in Estonia, the obligation to register as a taxable person with limited liability arises for the person as of the day of intra-Community acquisition of the goods. The provision does not apply to exempt intra-Community acquisition of goods (§ 18).

(3) A person is required to submit an application for registration as a taxable person with limited liability to the tax authority within three working days as of the date on which the obligation arises to register as a taxable person with limited liability.

(4) A person may submit an application for registration as a taxable person with limited liability to the tax authority before the registration obligation specified in subsections 1–3 of this section arises.

(5) The provisions of § 20 of this Act concerning the registration of taxable persons apply to the registration of taxable persons with limited liability.

(6) The form of an application for registration of a person as a taxable person with limited liability and the form of a decision of the tax authority concerning the registration of a taxable person with limited liability are established by a regulation of the minister in charge of the policy sector.

§ 22. Deletion of taxable person from register

(1) Where a person is registered as a taxable person and the supply of the transactions specified in subsection 3 of § 19¹ of this Act, where the place of supply is Estonia, has not exceeded the threshold specified in subsection 1 of § 19 of this Act in the current or previous calendar year and according to the calculations of the person does not exceed the threshold in the following twelve months, the person may submit an application to the tax authority for deletion themselves from the register, except in the case specified in subsection 2 of this subsection.

(2) A person of another Member State engaged in business may submit an application to the tax authority for deletion of themselves from the register where all the following requirements are complied with:

1) the person carries out intra-Community distance selling from another Member State to Estonia or provides services electronically to a person who has a registered office or residence in Estonia who has not been registered as a taxable person or a taxable person with limited liability in any of the Member States;

2) the person has been registered as a taxable person based on subsection 2 of § 20 of this Act before the registration obligation provided in subsection 4 of § 19 of this Act arose;

3) the person has been registered as a taxable person for at least two calendar years;

4) the supply of the transactions specified in subsection 3 of § 19¹ of this Act carried out by the person, where the place of supply is Estonia, has not exceeded the threshold specified in subsection 1 or 4 of § 19 of this Act in the current or previous calendar year and according to the calculations of the person does not exceed the threshold in the following twelve months.

(2¹) Where a person of another Member State engaged in business has been registered as a taxable person in accordance with subsection 4 of § 19 or subsection 2 of § 20 of this Act before the registration obligation provided in subsection 4 of § 19 of this Act arose and the person registers in another Member State as the person implementing special arrangements for imposing value added tax on the transfer of goods through a service, intra-Community distance selling and online marketplace, the person is deleted from the register as a taxable persons based on the application of the person, provided that the supply of the transactions, specified in subsection 3 of § 19¹ carried out by the person, where the place of supply is Estonia, has not exceeded the threshold provided in subsection 1 of § 19 in the current or previous calendar year and according to the calculations of the person does not exceed the threshold in the following twelve months.

(3) The tax authority has the right to delete a taxable person from the register where the taxable person has failed to submit a value added tax return for the last six consecutive tax periods.

(3¹) The tax authority has the right to delete a taxable person from the register where the taxable person is not engaged in business in Estonia. Where the proof provided concerning the business of the taxable person is insufficient, the tax authority has the right to request that the taxable person submit additional proof or collect such proof on their own initiative. The tax authority gives the taxable person a written notice of intention to delete the taxable person from the register and sets a term for providing proof concerning the business of the taxable person. Where the taxable person fails to provide proof of business within the prescribed term, the tax authority deletes the taxable person from the register of taxable persons.

(4) Where a taxable person is dissolved or the activities thereof are terminated in Estonia, the tax authority deletes the taxable person from the register of taxable persons.

(5) A taxable person is deleted from the register based on a decision of the tax authority. Before deciding on the deletion of a taxable person from the register, except in the cases specified in subsections 3 and 4 of this section, the tax authority audits, where necessary, the economic activities of the person. The taxable person is deemed to be deleted from the register as of the date specified in the decision.

§ 23. Deletion of taxable person with limited liability from register

(1) Where a taxable person with limited liability is registered as a taxable person in accordance with § 20 of this Act, the person is deleted from the register as a taxable person with limited liability.

(2) Where a person has been registered as a taxable person with limited liability for at least two years and the value of the goods acquired by the person by way of intra-Community acquisition has not exceeded the threshold specified in subsection 2 of § 21 of this Act during the previous calendar year and does not exceed during the current calendar year according to the calculations of the taxable person, the person may submit an application to the tax authority to be deleted from the register as a taxable person with limited liability.

(3) Where a taxable person with limited liability is dissolved or the activities thereof are terminated in Estonia, the tax authority deletes the taxable person from the register as a taxable person with limited liability.

(4) A taxable person with limited liability is deleted from the register as a taxable person with limited liability based on a decision of the tax authority. Before deciding on deletion from the register, except in the case specified in subsection 3 of this section, the tax authority audits, where necessary, the activities of the person. The taxable person with limited liability is deemed to be deleted from the register as of the date specified in the decision.

§ 24. Rights and obligations of taxable persons

(1) As of the date of registration as a taxable person, a person must perform the obligations of a taxable person, including adding the amount of value added tax to the taxable value of the goods transferred or services provided, calculating the amount of value added tax due in accordance with the procedure provided in § 29 of this Act, paying value added tax in accordance with the procedure provided in § 38, preserving documents and maintaining records in accordance with the provisions of § 36, and issue invoices in accordance with the requirements of § 37 of this Act.

(2) Subsection 1 of this section applies to foreign persons registered in Estonia as taxable persons who create supply in Estonia, except in cases specified in subsection 3¹ of § 3 of this Act and in the case the foreign person registered in Estonia has no permanent business establishment in Estonia through which the taxable person engages in business in Estonia.

§ 25. Rights and obligations of taxable persons with limited liability

(1) As of the date of registration as a taxable person with limited liability, a person must perform the obligations of a taxable person with limited liability, including calculating the amount of value added tax due in accordance with the provisions of subsection 12 of § 29 of this Act, paying value added tax in accordance with the procedure provided in § 38, preserving documents and maintaining records in accordance with the provisions of subsection 3 of § 36 of this Act. A taxable person with limited liability must submit a value added tax return in accordance with the provisions of § 27 of this Act only where the person has performed acts specified in subsection 5 of § 3 of this Act during the tax period. A taxable person with limited liability does not have the right to deduct input value added tax.

(2) A taxable person with limited liability who was registered in accordance with subsection 1 of § 21 of this Act upon the receipt of services specified in subsection 5 of § 10 of this Act from a foreign person engaged in business is not required to pay value added tax on the intra-Community acquisition of goods, except the intra-Community acquisition of excise goods or a new means of transport, where the taxable value of the goods acquired during a calendar year does not exceed 10,000 euros. Within three working days as of the date on which the specified threshold is exceeded, the taxable person with limited liability must notify the tax authority in writing of having exceeded the threshold on the intra-Community acquisition of goods.

(3) A taxable person with limited liability who does not pay value added tax on the intra-Community acquisitions of goods in accordance with subsection 2 of this section does not use its taxpayer registration number with limited liability when acquiring goods from another Member State. Where a taxable person with limited liability uses its taxpayer registration number with limited liability when acquiring goods from another Member State, the person is required to perform all the obligations specified in subsection 1 of this section.

§ 26. Registration of taxable persons as single taxable person

(1) The tax authority registers a parent undertaking and its subsidiaries for the purposes of the Commercial Code as a single taxable person (hereinafter value added tax group) based on a joint request by such taxable persons. Taxable persons who are economically and organisationally related are also registered as a value added tax group based on a joint request where more than 50 per cent of the shares, holding or votes of each company to be registered within the composition of a value added tax group are owned by one and the same person or where the persons are related based on a franchise contract. Estonian taxable persons engaged in business in Estonia are registered as a value added tax group.

(3) A taxable person may belong to only one value added tax group at the same time.

(4) A value added tax group is registered in the name of a representative elected by the persons who submitted the request and who represents the value added tax group, submits value added tax returns and requests for refund of overpaid amounts of value added tax. The representative is elected from among the persons belonging to the value added tax group. A value added tax group is granted a joint taxpayer registration number.

(5) The tax authority registers a value added tax group as at the first date of the calendar month. The tax authority may re-register the value added tax group that has been deleted from the register based on clause 3 of subsection 8 of this section as a value added tax group as of the day following the deletion thereof where only the companies that have been deleted from the Commercial Register and companies that have been declared bankrupt have been left out of the value added tax group to be registered.

(6) Overpaid amounts of value added tax are refunded to the representative who represents the value added tax group.

(7) Transactions between persons registered as a value added tax group are not deemed to be supply. Transaction between a taxable person belonging to a value added tax group and a person outside the value added tax group is deemed to be a transaction of the value added tax group with that person.

(8) The tax authority deletes a value added tax group from the register where:

1) the circumstances specified in subsection 1 of this section no longer exist, as at the first day of the month following the month in which such circumstances cease to exist;

2) a representative of the value added tax group submits a request for the deletion of the value added tax group from the register where changes are made in the composition of the group or for any other reasons, as at the first day of the month following the month of receipt of the application;

3) a company belonging to the value added tax group is declared bankrupt or it is deleted from the Commercial Register, as at the date of declaration of bankruptcy or deletion from the Commercial Register.

(9) The tax authority notifies the persons belonging to a value added tax group of the deletion of the value added tax group from the register.

(10) As of the date of the deletion of a value added tax group from the register, the taxable persons are deemed to be re-registered as separate taxable persons.

(11) The persons registered as a value added tax group submit a joint value added tax return. The annex to the value added tax return is submitted by taxable persons belonging to the value added tax group. The persons registered as a value added tax group are solidarily liable for payment of value added tax by the due date. Upon deletion of the value added tax group from the register, the taxable persons are solidarily liable for the value added tax arrears which arose during the period when they were registered as a value added tax group.

(12) In the case of transactions between persons registered as a value added tax group invoices are not issued based on § 37 of this Act.

(13) Provision of services between a taxable person belonging to a value added tax group and its permanent business establishment located in a foreign state is deemed to be business.

(14) The procedure for registration of a value added tax group, the form of the corresponding registration applications, the form of decisions of the tax authority concerning registration and the procedure for deletion of a value added tax group from the register are established by a regulation of the minister in charge of the policy sector.

§ 27. Tax period and value added tax return

(1) The tax period is one calendar month. The value added tax return and annex thereto (hereinafter together value added tax return) are submitted to the tax authority by the twentieth day of the month following the tax period. The first tax period for a taxable person and taxable person with limited liability is the period as of the date of registration as a taxable person or taxable person with limited liability until the end of the same month. Where the number of calendar days in the first tax period is less than fifteen, the taxable person or taxable person with limited liability may declare the supply of the first period together with the supply of the following tax period and submit one return concerning two tax periods. The form of the value added tax return is established by a regulation of the minister in charge of the policy sector.

(1¹) A value added tax return is submitted electronically where the person has been a taxable person for at least twelve months or more than five invoices are included in the annex to the value added tax return. Based on a reasoned request made by a taxable person or a taxable person with limited liability, the tax authority may allow the submission of a value added tax return on paper.

(1²) The data of the invoices issued to and received from a legal person, sole proprietor and state, rural municipality and city agency and the registry code issued to a transaction partner in Estonia, in the case of a notary and an enforcement agent the personal identification code, are reflected in the annex to the value added tax return. The annex to the value added tax return reflects the invoices in which the transferor of the goods or service providers has marked the supply taxable at the 24 per cent, 13 per cent and 9 per cent value added tax rate, except for the invoices submitted under special arrangements provided in § 40 of this Act in case the invoice or the total amount of invoices without value added tax makes up at least 1,000 euros for one transaction partner during the tax period. The threshold based on the transaction partner is calculated separately for purchase and sale invoices. The invoices are not summed up in the annex to the value added tax return.

(1³) A person may indicate in the annex to the value added tax return the data of the invoices specified in subsection 1² of this section the total amount of which is less than 1,000 euros, without value added tax, for a transaction partner.

(1⁴) The annex to the value added tax return does not reflect the data of invoices issued and received for such transactions and acts on which the obligation to keep professional or official secrecy is extended under the law. The receiver of the service may reflect, in the annex to the value added tax return, the data of the invoices received for transactions and acts specified in this subsection.

(2) The following are required to submit value added tax returns:

1) taxable persons;

2) taxable persons with limited liability who have performed acts specified in subsection 5 of § 3 of this Act during the tax period, without the annex to the value added tax return;

3) persons specified in clause 2 of subsection 6 of § 3 of this Act in the case of transactions concerning which the person has issued an invoice or other sales document in which the amount of value added tax is indicated.

(4) Based on a reasoned request made by a taxable person, the tax authority may, by their decision, establish a tax period longer than one calendar month for the taxable person, which begins on the first day of the calendar month or the first tax period and ends on the last day of one of the following calendar months. Also in this case, value added tax returns are still submitted to the tax authority by the twentieth day of the month following the tax period.

(5) Where a taxable person or taxable person with limited liability amends information submitted in the value added tax return concerning a previous tax period, the person is required to submit a new value added tax return with the amended information to the tax authority concerning that tax period.

(6) Upon the declaration of bankruptcy of a taxable person, two value added tax returns are submitted concerning the tax period: about the period of time preceding and following the declaration of bankruptcy.

§ 28. Report on intra-Community supply

(1) A taxable person is required to submit a report on intra-Community supply where:

1) they have effected intra-Community supply of goods during a tax period or they have transferred goods as a reseller in a triangular transaction during a tax period or they have transported call-off stock from Estonia to another Member State, including where the acquirer of call-off stock changes or call-off stock has been returned to Estonia;

2) they have provided, to a taxable person or taxable person with limited liability of another Member State, a service specified in clause 9 of subsection 4 of § 10 of this Act which is subject to taxation, except the taxation with zero per cent taxation rate, in the Member State of the recipient of the service.

(2) A report on intra-Community supply is submitted to the tax authority by the twentieth day of the month following each calendar month.

(3) Where a taxable person amends information in a report on intra-Community supply submitted concerning a previous period, the person is required to submit a report on the amendment of intra-Community supply to the tax authority concerning the corresponding period. Where a taxable person cancels an invoice concerning goods or services or submits a credit invoice, the corresponding amendments concerning the tax period during which the invoice was cancelled or the credit invoice was submitted are indicated in the report on intra-Community supply.

(4) The standard form of reports on intra-Community supply and the standard form of reports on the amendment of intra-Community supply and the procedure for the completion thereof are established by a regulation of the minister in charge of the policy sector.

(5) A taxable person that has transferred to a person of another Member State a new means of transport which is transported to another Member State must add a copy of the invoice, issued upon the sale of the means of transport, to the report on intra-Community supply.

(6) In the report on intra-Community supply and in the report on the amendment of intra-Community supply the amounts are reflected in full euros.

§ 29. Calculation of amount of value added tax

(1) The amount of value added tax to be paid by a taxable person is the amount of value added tax calculated during the tax period on the transactions or acts specified in subsection 4 and clauses 5 and 6 of subsection 6 of § 3 of this Act, less input value added tax of the same tax period, on the goods or services used for transactions or acts specified in subsection 2 of § 4 of this Act and related to business, or for business carried out in a foreign state, except transactions deemed to be exempt supply (§ 16) and the exempt transactions in another Member State under the requirements provided in § 19¹, input value added tax of the same tax period on goods or service used for consumption. Input value added tax for the same tax period on goods or service used for consumption, specified in clauses 1 and 6 of subsection 2 or in subsection 2¹ of § 16 of this Act, provided to a person of a third country, may also be deducted.

(2) The calculated value added tax is the value added tax calculated on the taxable value of the transactions and acts specified in subsection 4 and in clauses 5 and 6 of subsection 6 of § 3 of this Act carried out or performed by a taxable person. Value added tax paid in accordance with the customs legislation is not included in the calculated value added tax.

(3) Input value added tax paid by a taxable person is:

1) value added tax to be paid on goods or services which a taxable person acquires or receives from another taxable person;

2) value added tax paid or to be paid by a taxable person on imported goods;

3) value added tax calculated on the taxable value of services, where the place of supply is Estonia, and which are received from a foreign person engaged in business who is not registered as a taxable person in Estonia;

4) value added tax calculated on the taxable value of goods acquired by way of intra-Community acquisition, goods installed or assembled, goods acquired by way of a triangular transaction or other goods acquired, on which the taxable person is required to calculate value added tax in accordance with this Act.

(4) Where a taxable person uses goods or services for the purposes of transactions specified in subsection 1 of this section as well as for purposes other than those related to business, only input value added tax on goods or services used for the purposes of transactions specified in subsection 1 of this section is deducted. Where it is not possible in the accounts of the taxable person to separate input value added tax on goods or services used for the purposes of transactions specified in subsection 1 of this section from input value added tax on goods or services used for purposes other than those related to business, the procedure for deduction of input value added tax is determined by a decision of the tax authority based on a request of the taxable person, taking into account the actual use of the goods or services. Upon acquisition of an automobile or use under the contract for use and purchase of goods and receipt of services for such an automobile input value added tax is deducted according to the proportion of its use for business purposes, but not more than fifty per cent, taking account of the proportion of the taxable supply and the exempt supply.

(5) A taxable person who has, prior to the date of registration as a taxable person, acquired goods, except for fixed assets, for the purpose of selling them or producing goods for sale, has the right to deduct input value added tax on those goods in the tax period in which the goods were sold as taxable supply.

(5¹) A taxable person who has received services prior to the date of registration of the person as a taxable person has the right to deduct input value added tax on such services in the tax period where such services were continued to be provided as taxable supply.

(5²) Input value added tax on fixed assets acquired before registration of a person as a taxable person may be deducted, taking account of the provisions of subsection 4 of § 32 of this Act.

(6) Upon the export of goods specified in subsection 2 of § 5 of this Act, a taxable person has the right to reduce their tax liabilities in the tax period during which the criteria set out in subsection 2 of § 5 were complied with by the amount of value added tax indicated on a document with customs confirmation where, at the time of submission of the value added tax return for the tax period during which the goods were transferred, not all the criteria according to which the transfer of goods was treated as the export of goods had been complied with.

(7) Where a taxable person cancels an invoice concerning goods or services or submits a credit invoice due to the reduction in the price of the goods or services after submission of a value added tax return concerning the tax period in which the supply of the goods or services was created, both the seller and the purchaser reflect the corresponding amendments in the value added tax return submitted concerning the tax period during which the invoice was cancelled or the credit invoice was submitted. A credit invoice may only be submitted regarding a specific invoice referred to in the credit invoice. The provision is not applied where the credit invoice has been submitted due to a failure to pay for goods or services in part or in full.

(8) Where the supply of goods has been effected but the contract under which the ownership of the goods is to pass to the contractual user of the goods upon termination of the contract is cancelled and the purchaser who is not registered as a taxable person returns the goods, the seller may adjust the amount of value added tax payable for the tax period in which the goods were returned by the amount of value added tax refunded to the purchaser.

(9) Where a seller receives money from a purchaser, but the goods are not transferred or the services are not provided, the seller is permitted to cancel the calculation of value added tax on such goods or services where the seller has refunded the amount to the purchaser.

(10) Where a taxable person is deleted from the register, the person pays value added tax on goods not yet transferred where the person has deducted input value added tax on such goods upon acquisition. The acquisition cost or, in the absence thereof, the cost price of the goods is the taxable value of the goods. Input value added tax deducted upon acquisition of fixed assets not yet transferred is adjusted in accordance with provisions of subsection 4 of § 32 of this Act.

(12) The amount of value added tax to be paid by a taxable person with limited liability is the value added tax calculated in the tax period on the acts specified in subsection 5 of § 3 of this Act, taking account of the specification provided in subsection 7 of § 3.

(13) The amount of value added tax is calculated based on the tax rate which is applicable on the date determined in accordance with § 11 of this Act. Where information required for the calculation of the amount of value added tax on the import of goods is expressed in a foreign currency, the exchange rate is determined in accordance with the provisions of the Customs Code governing the calculation of value for customs purposes. Where information required for the calculation of the amount of value added tax on a transaction other than an import transaction is expressed in a foreign currency, the exchange rate of the euro as determined by the European Central Bank and applicable on the date determined in accordance with § 11 of this Act applies.

§ 29¹. Reduction of tax liability

(1) A taxable person has the right to reduce their tax liability by the amount of the value added tax calculated on the goods transferred or services provided, which have not been paid for in full or in part, according to the unpaid part, where all the following requirements are met:

1) an invoice has been issued for the goods transferred or the services provided in accordance with § 37 of this Act;

2) the amount of the value added tax is calculated on the transaction and reflected in the value added tax return for the tax period of the transaction;

3) the claim has not been transferred;

4) at least twelve months have passed since the due date for payment of the invoice, but not more than three years, except in the case specified in clause 6 of this subsection;

5) the claim has been written off in accounting because it has not been possible to collect the claim despite the efforts of the taxable person to make every effort to collect the claim, or the expenses incurred for its recovery exceed the estimated income receivable;

6) in the case of a claim containing value added tax exceeding 30,000 euros, the claim has been certified by a court judgment which has entered into force;

7) the purchaser of goods or the recipient of services is not a related person for the purposes of the Income Tax Act;

8) the taxable person has notified the purchaser of the goods or the recipient of the service in writing of the write-off of the claim in the accounting in the month of the write-off, indicating the amount of the value added tax related to the written-off claim.

(2) A taxable person adjusts the amount of their value added tax due in the tax period when the receivable was written off in the accounting by the amount of the value added tax calculated based on subsection 1 of this section on the goods transferred or services provided which have not been paid for in part or in full.

(3) Where a taxable person has reduced the amount of the value added tax payable in accordance with subsection 1 of this section, but the claim on which the reduction is based is subsequently paid in part or in full, the claim is included according to the part paid for in the taxable value of the tax period where the claim was paid in part or in full.

(4) Where a taxable person has failed to pay in part or in full for the goods or services but has deducted in part or in full the value added tax included in the unpaid invoice as input value added tax and has received the notification of the write-off of the claim in accounting specified in clause 8 of subsection 1 of this section, the taxable person is required to increase their tax liability by the amount of value added tax related to that claim in the tax period in which the notification is received.

§ 30. Restrictions on deduction of input value added tax

(1) Input value added tax on goods or services relating to the reception of guests or the provision of meals or accommodation for employees is not deducted from the calculated value added tax.

(2) The provisions of subsection 1 of this section do not apply to the deduction of input value added tax paid for accommodation services received during a business trip.

(3) Upon the acquiring of an automobile for business purposes or using under the contract for use and purchasing of goods and receiving of services for such an automobile, fifty per cent of input value added tax is deducted from the calculated value added tax.

(4) The restriction provided in subsection 3 of this section is not applied where:

1) an automobile is acquired for sale on condition that the taxable person is engaged in the sale of automobiles and the automobiles acquired for sale are not taken into use by the taxable person for purposes other than business;

2) an automobile is acquired on the basis of a contract of use for the purpose of granting of use on condition that the taxable person is engaged in the granting of use of automobiles and the automobiles acquired for the granting of use are not taken into use by the taxable person for purposes other than business;

3) an automobile is mainly used for the carriage of passengers for a charge on condition that the taxable person has a Community licence and a certified copy of the Community licence or, in the case of the provision of taxi service, a taxi licence and a licence card;

4) an automobile is mainly used for driving lessons on condition that the taxable person has a motor vehicle driver training permit or the taxable person provides the service of a motor vehicle driver instructor to a person that has the motor vehicle driver training permit;

5) an automobile is exclusively used for business purposes only, except the granting of use of the automobile for charge to an employee, servant or member of the management or controlling body of the taxable person.

(4¹) The transporting of employees between their residence and their place of employment under the conditions provided in subsection 5¹ of § 48 of the Income Tax Act is also deemed to be the use of an automobile for business purposes.

(5) In the cases provided in subsections 3 and 4 of this section the provisions of § 32 of this Act are also taken account of upon the deduction of input value added tax when acquiring an automobile for business purposes or using under the contract for use and purchasing goods and receiving services for such an automobile.

(6) The tax authority is notified of the implementation of subsections 3 and 4 of this section based on subsection 1 of § 27 of this Act in the form established by the minister in charge of the policy sector.

(7) In the cases specified in clauses 2–5 of subsection 4 of this section the restriction specified in subsection 3 of this section is not applied upon acquiring an automobile where the automobile is being used for the purposes specified in clauses 2–4 of subsection 4 of this section for at least two consecutive years as of the acquisition thereof or the automobile acquired for sale as of taking into use for the purposes specified in clauses 2–5 of subsection 4 of this section. Where the purpose of use of the automobile changes within two years and it is taken into use for the purpose unspecified in clauses 2–5 of subsection 4 of this section, and the taxable person has calculated value added tax on the use as self-supply during the specified two years of an automobile used in the cases specified in clauses 3 and 4 of subsection 4 of this section, the tax liability effected is reduced by the amount of value added tax calculated on the use as self-supply of such automobile within the specified two years. The provision is not applied where the automobile is transferred within two years as of taking into use thereof for the purpose specified in clauses 2–5 of subsection 4 of this section.

(8) Where the grounds for the implementation of subsection 4 of this section cease to exist, the restriction on the deduction of input value added tax specified in subsection 3 of this section is implemented within at least one year as of the first day of the tax period on which the grounds cease to exist.

(9) Upon the implementation of subsection 4 of this section the taxable person is required to ensure that the use of the relevant automobile is precluded for the purposes other than provided in subsection 4.

§ 31. Requirements for deduction of input value added tax

(1) Upon the receipt of goods or services from another taxable person, input value added tax is deducted based on an invoice that complies with the requirements of § 37 of this Act.

(2) Upon intra-Community acquisition of goods, acquisition of goods installed or assembled, acquisition of goods by way of a triangular transaction (clause 4 of subsection 4 of § 3) and other acquisition of goods from a foreign person engaged in business on which a taxable person is required to calculate value added tax in accordance with this Act, an invoice is not required for the deduction of input value added tax where other proof exists.

(3) Upon the receipt from a foreign person engaged in business of services on which a taxable person is required to calculate value added tax in accordance with this Act, an invoice is not required for the deduction of input value added tax where other proof exists.

(4) Upon the import of goods, input value added tax is deducted based on a customs declaration. Where goods are imported from a third country which is part of the customs territory of the Union, input value added tax is deducted based on an invoice received from a third country person engaged in business and a customs declaration form containing the particulars of the imported goods (subsection 2 of § 38).

(4¹) Where the amount of value added tax due upon the import of goods is paid based on a decision resulting from a follow-up inspection by the customs authorities, input value added tax is deducted based on the decision of the customs authorities.

(6) Where a taxable person who is importing goods pays the value added tax through a customs agency, the person has the right to deduct input value added tax after the customs has released the goods.

(7) The customs agency may not treat value added tax paid or to be paid for another person as value added tax paid or to be paid on goods imported for the purposes of their business.

(7¹) Value added tax paid or payable on goods or services received to be used for repair and maintenance of an object of leasing is not deemed to be an input value added tax of the lessor. The provision is not applied where:

1) the lessor has the obligation to provide repair and maintenance of the object of the lease agreement and the lease agreement is taxed with regard to the goods as well as financial operation or

2) the lessor provides repair and maintenance service.

(8) In the case of the import of goods, input value added tax is deducted in the tax period during which the customs released the goods. In other cases, input value added tax is deducted in the tax period during which the goods or services are acquired or received in accordance with § 11 of this Act.

(9) Where goods acquired or services received and the invoice issued for such goods or services are received during different tax periods, input value added tax is deducted in the tax period when the transferor of the goods or the provider of the services created supply in accordance with § 11 of this Act. Where the invoice which is the basis for the deduction of input value added tax is not received by the time the value added tax return is submitted for a tax period, input value added tax is deducted in the tax period during which the invoice is received.

(10) In the event of the acquisition of goods or services from a taxable person implementing special arrangements for cash-based value added tax accounting, input value added tax is deducted in the tax period when the supply of such goods or services is created for the taxable person implementing special arrangements for cash-based value added tax accounting.

§ 32. Partial deduction of input value added tax

(1) Where a taxable person uses goods or services for the purposes of both taxable supply and exempt supply, input value added tax is partially deducted from the calculated value added tax. Partial deduction is based on the proportion of the supply of the taxable person effected in Estonia and foreign countries during a calendar year where input value added tax can be deducted in accordance with subsection 1 of § 29 of this Act to the total amount of the supply effected by the person in Estonia and foreign countries (hereinafter proportion of taxable supply to total supply). The proportion of taxable supply to total supply is rounded up to two decimal points or to a full percentage.

(2) The transfer of fixed assets is not taken into account when calculating the proportion of taxable supply to total supply, including in cases where the taxable person has added value added tax to the taxable value of the goods in accordance with subsection 3 of § 16 of this Act. The provision of the services specified in clause 6 of subsection 3 and subsection 2¹ of § 16 of this Act or transfer of immovable property as goods, in so far as these are incidental transactions, is also not taken into account.

(3) Upon partial deduction of input value added tax, a taxable person may change the proportion of taxable supply to total supply referred to in subsection 2 of § 33 of this Act during a calendar year with the written permission of the tax authority obtained based on a reasoned request made by the taxable person where the actual proportion of taxable supply to total supply in the current calendar year is substantially different.

(4) The deduction of input value added tax on fixed assets and goods acquired and services received for the purpose of fixed assets is based on the estimated proportion of the use of fixed assets for taxable supply. Upon initial use of fixed assets, input value added tax is adjusted in full according to the actual proportion of the use of fixed assets for taxable supply during the tax period in which fixed assets are put into use. Hereafter input value added tax is adjusted according to the actual proportion of the use of fixed assets and goods acquired and services received for the purpose of fixed assets for the taxable supply within the period for adjustment of input value added tax. Input value added tax is adjusted only for the goods acquired and services received for the purpose of fixed assets which increase the book value of fixed assets. In the case of a passenger car used for business purposes, the proportion of the use of the passenger car for business purposes is calculated in accordance with the procedure provided in subsection 4 of § 29 and § 30 of this Act.

(4¹) The period for adjustment of input value added tax is ten calendar years for immovable property and related goods and services and five calendar years for other fixed assets and related goods and services. The first calendar year is considered to be the period as of the date on which the fixed asset or goods or services acquired for use with the fixed asset are recorded in the accounts as fixed assets in use until the end of the current calendar year.

(4²) Input value added tax is adjusted at the end of each calendar year taking into account the actual proportion in which fixed assets are used for the purposes of taxable supply during the given calendar year, except in the case specified in subsection 5 of this section.

(5) Upon the transfer of fixed assets, input value added tax is adjusted during the month in which fixed assets are transferred. Input value added tax need not be adjusted upon transfer of immovable property used for business purposes to a credit or financial institution where the person who transfers the immovable property has obtained the use of the immovable property from the credit or financial institution based on a contract during the same tax period and continues to use the immovable property for business purposes for at least ten calendar years as of the beginning of use of the immovable property for their business.

(5¹) Where input value added tax is adjusted upon the transfer of fixed assets, the using of fixed assets and the goods acquired or services received for the purpose of fixed assets, during the year in which fixed assets are transferred until the end of the period for adjustment, are accounted for as being used for the purposes of the fully taxable supply. Where the taxable value of fixed assets upon the transfer is lower than half of the purchase price of the assets, the period as of the month following the transfer of fixed assets until the end of the period for adjustment is not taken into account upon the adjustment of input value added tax. Where input value added tax is adjusted upon the exempt transfer of immovable property, the using of the immovable property and the goods acquired or service received for the purpose of immovable property during the year in which the immovable property is transferred until the end of the period for adjustment is accounted for as being used for the purposes of the supply exempt from tax in full.

(6) The procedure for reporting recalculation of partially deducted input value added tax in a value added tax return and the procedure for the adjustment of input value added tax on fixed assets acquired and the goods acquired or services received for the purpose of fixed assets are established by a regulation of the minister in charge of the policy sector.

(7) Taxable persons generating supply exempt from value added tax of investment gold have the right to deduct:

1) input value added tax paid upon purchasing investment gold from a taxable person who has exercised the right specified in clause 4 of subsection 3 of § 16 of this Act;

2) input value added tax paid on gold other than investment gold and imported by them, acquired by way of intra-Community acquisition or acquired from another taxable person, on the condition that they subsequently transform the gold into investment gold;

3) input value added tax paid upon receipt of services relating to a change of the form, weight or purity of the gold.

§ 33. Methods of partial deduction of input value added tax

(1) Upon partial deduction of input value added tax in the case specified in subsection 1 of § 32 of this Act, the taxable person may use either the method of proportional deduction or the method combining direct calculation and proportional deduction during one and the same calendar year.

(2) In the case of proportional deduction, the proportion of taxable supply to total supply is applied upon deduction of input value added tax in full amount. The proportion of taxable supply to total supply is determined based on the supply effected by the taxable person during the previous calendar year. The result is adjusted at the end of the calendar year, taking into account the proportion of taxable supply to total supply during the given calendar year. Where the person has engaged in business for less than one calendar year, the proportion of taxable supply to total supply is determined by a decision of the tax authority based on an application by the taxable person, taking into account the estimated proportion of taxable supply to total supply during the first calendar year.

(3) In the case of the method combining direct calculation and proportional deduction, input value added tax paid on goods acquired or services received for the purposes of taxable supply is deducted from the calculated value added tax. Input value added tax paid on goods acquired or services received for the purposes of exempt supply is not deducted from the calculated value added tax. Input value added tax paid on goods acquired or services received for the purposes of both taxable supply and exempt supply is deducted according to the proportion of taxable supply to total supply in accordance with the procedure provided in subsection 2 of this section. A taxable person must keep separate accounts for taxable supply and exempt supply for the goods acquired and services received for the purposes thereof and for goods acquired or services received for the purposes of both taxable supply and exempt supply.

(4) Where a taxable person has effected only exempt supply or only taxable supply in an area of activity and both taxable supply and exempt supply in another area of activity, the taxable person may, with the written permission of the tax authority, deduct input value added tax paid on goods acquired or services received for the purposes of both taxable supply and exempt supply in such an area of activity according to the proportion of taxable supply to total supply in the same area of activity. Otherwise, the provisions of subsection 3 of this section apply in such cases.

§ 34. Refund of input value added tax to taxable person

(1) Where value added tax calculated during a tax period is less than the amount of input value added tax deductible by the taxable person during the same period, the overpaid amount of value added tax is refunded to the taxable person in accordance with the procedure provided in the Taxation Act.

(2) The tax authority may, in connection with checking a claim for refund, extend the term for fulfilment of the claim for refund by a reasoned decision for up to sixty calendar days where there is reason to believe that it may be impossible to reclaim the sum paid upon satisfaction of the claim for refund, and where:

1) the taxable person has been ordered to provide additional proof, or

2) an inquiry to a third person or foreign tax authority has been made in order to check the claim for refund.

(3) The term for fulfilling a claim for refund may be extended for up to thirty calendar days at a time. The tax authority makes a written reasoned decision on extension of the term of fulfilment of the claim for refund not later than five calendar days before the term of expiry of the term for fulfilling the claim for refund.

(4) Upon checking the accuracy of the claim for refund without a request for the fulfilment of the claim for refund, the provisions of subsections 2 and 3 of this section are applied.

(5) The tax authority of another Member State refunds to a taxable person the value added tax paid in another Member State upon the import or acquisition of goods or receipt of services used for the purposes of its taxable supply effected in Estonia and, to a taxable person implementing special arrangements in accordance with § 43 of this Act, the value added tax paid in another Member State upon the import or acquisition of goods or receipt of services used for the purposes of its taxable supply. A request for the refund of value added tax must be submitted to the Estonian tax authority by electronic means no later than by 30 September of the calendar year following the period of refund.

§ 35. Refund of input value added tax in other cases

(1) Value added tax paid in Estonia by a taxable person of another Member State upon the import or acquisition of goods or receipt of services used for the purpose of business being carried out in the country of residence of the person is refunded to the taxable person of another Member State based on a request from the taxable person and in accordance with the procedure established by a regulation of the minister in charge of the policy sector where:

1) the taxable person is required to pay value added tax as an undertaking in the country of residence of the person;

2) in their country of residence the taxable person has the right to deduct input value added tax, paid upon the import or acquisition of goods or receipt of services under the same requirements, from their calculated value added tax;

3) the Estonian taxable person has the right to deduct input value added tax, paid upon the import or acquisition of goods or receipt of services under the same requirements from their calculated value added tax in accordance with this Act,;

4) the amount of value added tax to be refunded is at least 50 euros per calendar year or at least 400 euros in the case where the request is submitted concerning a period shorter than a calendar year but covering at least three months;

5) the request has been submitted electronically to the Estonian tax authority through the tax authority of the country of residence of the taxable person of another Member State not later than by 30 September of the calendar year following the period of refund.

(1¹) Where a taxable person of another Member State who has the right in their country of residence to partially deduct input value added tax from the value added tax calculated on its taxable supply submits a request for the refund of value added tax during the period of refund, upon any changes in the proportion of the partial deduction of input value added tax the taxable person submits a correction of the request for the refund of value added tax during the calendar year following the period of refund.

(1²) The tax authority notifies a taxable person of another Member State of the satisfaction or rejection of a request for the refund of value added tax within four months or, upon requesting of additional information, for example an invoice or import documentation, within six months as of the receipt of the request. Upon requesting further additional information, the tax authority notifies of the making of the decision concerning the refund of value added tax within eight months as of the receipt of the request. The tax authority sends documents to the applicant electronically. Where a request for the refund of value added tax is satisfied, value added tax is refunded not later than within ten working days as of notifying the taxable person of the decision to satisfy the request.

(1³) Where value added tax is refunded to a taxable person of another Member State after expiry of the term provided in subsection 1² of this section, the tax authority pays interest to the person at the rate provided in § 117 of the Taxation Act.

(2) Based on a written request by a third country taxable person value added tax paid in Estonia upon the import or acquisition of goods used for their business purposes, except immovable property or receipt of services, is refunded to the third country taxable person in accordance with the procedure established by a regulation of the minister in charge of the policy sector where:

1) a taxable person is required to pay value added tax as an undertaking in their country of residence;

2) the amount of value added tax to be refunded per calendar year is at least 320 euros;

3) an Estonian taxable person has the right to deduct, in accordance with this Act, input value added tax paid upon the import or acquisition of goods or receipt of services under the same requirements from their calculated value added tax;

4) in the country of residence of the third country taxable person, an Estonian resident has the right to the refund of value added tax.

(4) Value added tax to be refunded is transferred to the bank account specified in a request submitted in the form established by a regulation of the minister in charge of the policy sector.

(5) The Government of the Republic has the right to establish, by a regulation, a list of movable property and services upon the acquisition or receipt of which value added tax paid is not refunded to a third country taxable person even where the requirements specified in subsections 1 and 2 of this section are satisfied.

(6) Input value added tax paid upon acquisition or importation of goods in Estonia is refunded to persons who export such goods as humanitarian aid, provided that the export of the goods is certified by documents specified in subsection 5 of § 5 of this Act. Humanitarian aid is irrecoverable aid granted for alleviation of need to an international organisation, foreign government, foreign local authority or foreign non-governmental organisation.

(7) Where a person does not have the right to deduct input value added tax provided in § 29 of this Act, value added tax paid upon the acquisition or calculated on the purchase price of a new means of transport is refunded to the person after delivery of the new means of transport to the other Member State provided that the person proves that value added tax has been paid on the intra-Community acquisition of the goods in another Member State. Value added tax is refunded in an amount not exceeding the value added tax calculated on the usual value of the new means of transport determined upon the delivery of the new means of transport to the other Member State.

(8) A person who does not have the right to deduct input value added tax and cannot apply for a refund of value added tax based on subsection 1 of this section, is refunded value added tax paid upon the import of goods provided that the person proves that value added tax has been paid on the intra-Community acquisition of the goods in another Member State.

(10) The procedure for the refund of value added tax to a foreign taxable person, the form of the request for such refunds of value added tax and the procedure for the refund of value added tax to a person who exports goods as humanitarian aid is established by a regulation of the minister in charge of the policy sector.

(11) The procedure for the refund of value added tax paid upon the acquisition of new means of transport in special cases is established by a regulation of the minister in charge of the policy sector.

(13) Value added tax paid in Estonia upon import or acquisition of goods or receipt of services used for the goods and services under special arrangements, taking account of the requirements provided in subsections 1 and 2 of this section, except for the condition provided in clauses 1 and 4 of subsection 2 of this section, is refunded to a taxable person of another Member State or a third country person engaged in business, implementing special arrangements for imposing value added tax upon transfer of goods, intra-Community distance selling and transfer of goods through online marketplace

§ 36. Obligations of taxable persons and taxable persons with limited liability upon keeping records

(1) A taxable person is required to:

1) preserve copies of invoices issued by or on behalf of the person (subsection 1 of § 37) and invoices for goods acquired or services received by or on behalf of the person in the chronological order for seven years as of the date of their issue or receipt. The information set out in an invoice is preserved in its original form. Customs declarations certifying the import of goods are preserved for seven years as of the beginning of the calendar year following customs formalities;

2) keep daily records of taxable and exempt supply, value added tax calculated and input value added tax payable for taxable supply received from another registered taxable person or on goods or services specified in subsection 2 of § 4 of this Act, used for business purposes, and input value added tax calculated on the taxable value of services received or goods acquired specified in clauses 2–5 of subsection 4 of § 3 of this Act, and input value added tax paid or to be paid on imported goods, in accordance with the procedure established by a regulation of the minister in charge of the policy sector;

3) keep records of the goods dispatched or transported to another Member State by or on behalf of the taxable person, provided that such goods are not treated as intra-Community supply of goods in accordance with subsection 2 of § 7 of this Act;

4) keep records of movable property specified in clause 3 of subsection 3 of § 8 of this Act and transported to the taxable person to Estonia from another Member State with an accuracy enabling identification of movable property;

5) keep records of the transactions related to the reusable packaging specified in subsection 7 of § 11 of this Act and retain documentation related to reusable packaging for a period of at least seven years;

6) keep records of transactions and acts related to call-off stock taking account of the provisions of clause 4 of subsection 1 and clauses 12–14 of subsection 2 of § 7 and subsections 6 and 7 of § 8 of this Act;

7) keep records of the transfer of goods and provision of services provided through their online marketplace to a person not registered as a taxable person or a taxable person with limited liability and, as an exception to clause 1 of this subsection, retain such data for ten years as of the end of the year of supply.

8) keep records relating to the invoices unpaid in part or in full specified in § 29¹ of this Act.

(2) A seller of investment gold registered as a taxable person is required to keep records of all transactions involving investment gold and purchasers of investment gold, and to retain documentation relating to each transaction for five years as of the date of the transaction.

(3) A taxable person with limited liability is required to:

1) keep copies of the invoices for goods acquired or services received specified in clauses 2–5 of subsection 4 of § 3 of this Act in chronological order for seven years as of the date of their issue or receipt. The information set out in an invoice must be preserved in its original form;

2) keep daily records of value added tax calculated on the taxable value of services received and goods imported or acquired specified in clauses 2 and 5 of subsection 1 of § 1 or clauses 2–5 of subsection 4 of § 3 of this Act in accordance with the procedure established by a regulation of the minister in charge of the policy sector;

3) keep records of goods dispatched or transported to another Member State by or on behalf of the taxable person with limited liability, provided that such goods are not treated as intra-Community supply of goods based on subsection 2 of § 7 of this Act;

4) keep records of movable property specified in clause 3 of subsection 3 of § 8 of this Act and transported to the taxable person with limited liability to Estonia from another Member State with an accuracy enabling identification of the movable property.

(4) A taxable person or a taxable person with limited liability may choose the place and manner of storage of invoices on the condition that the person makes the invoices or information stored on the invoices immediately available at the request of the tax authority and where the amount of value added tax calculated on the transaction or act indicated on the invoice is subject to payment in another Member State, also made available at the request of a competent authority of another Member State.

(5) The procedure for keeping daily records of value added tax of a taxable person is established by a regulation of the minister in charge of the policy sector.

§ 36¹. Record-keeping obligations of payment service provider

(1) A payment service provider that provides payment services in relation to the same payee in the course of a quarter involving more than 25 payments, where the payer is located in one Member State and the payee is located in another Member State or in a third country (hereinafter cross-border payment), is required to keep and transmit to the tax authority in relation to the payment services provided to the payee and, where the location of the payee is in a third country, in relation to the payment services provided to the payer, the following information about the payee and payments of cross-border payments (hereinafter information):

1) BIC or other company identification code identifying the payment service provider;

2) the name or business name of the payee;

3) the tax registration number of the payee or another number identifying the payee, where available;

4) IBAN or, in the absence thereof, any other identifier which unambiguously identifies the payee and their location;

5) BIC or other company identification code by which the payment service provider acting on behalf of the payee and their location is identified, where the payee receives funds but does not have a payment account themselves;

6) the address of the payee, where available;

7) an indication of the refund;

8) the date and time of payment or refund made;

9) the amount and currency of the payment or refund;

10) the country of origin of the payee or the payment received on behalf of the payee, the Member State of destination of the refund where applicable, and the information used to establish the origin or destination of the payment or refund in accordance with subsection 7 of this section;

11) a reference unambiguously identifying the payment;

12) relevant information where the payment is initiated on the premises of the trader.

(2) The number of cross-border payments is calculated based on the payment services provided by the payment service provider to the payee who is located in Estonia or to the payer, where the payee is established in a third country. The number of payments is calculated per payee, also including where the payment service provider has information that the payee has several location identifiers.

(3) The payment service provider is required to store the information electronically for three calendar years as of the end of the calendar year in which the payment was made.

(4) The information is submitted to the tax authority about each quarter by the end of the month following the quarter in the e-service environment of the tax authority. In case the obligation to provide information about the relevant quarter has not arisen, it is confirmed in the e-service environment of the tax authority by the end of the month following the quarter. The obligation to provide such confirmation lies with the person, specified in clause 1 of subsection 6 of this section, who has the right to provide payment services covered by the obligation to provide information.

(5) The requirement to store and transmit information to the tax authority is not applied to payment services provided by the payment service provider of the payer in relation to payments where at least one of the payment service providers of the payee is located in a Member State according to the BIC of the payment service provider or other company identifier code identifying the payment service provider and their location. However, this payment service is taken into account upon calculating the number of cross-border payments.

(6) For the purposes of this section, the terms relating to payments have the following meanings:

1) the payment service provider is a person specified in clauses 1–4 of subsection 6 of § 3 of the Payment Institutions and E-money Institutions Act;

2) the payment service is a service specified in clauses 3–6 of subsection 1 of § 3 of the Payment Institutions and E-money Institutions Act;

3) the payment is a payment transaction for the purposes of the Law of Obligations Act, taking into account special rules provided in § 4 of the Payment Institutions and E-money Institutions Act;

4) the payer or the payee is the payer or the payee for the purposes of the Law of Obligations Act;

5) the payment account is a payment account for the purposes of the Law of Obligations Act;

6) IBAN is an international payment account identifier as defined in point 15 of Article 2 of Regulation (EU) No 260/2012 of the European Parliament and of the Council establishing technical and business requirements for credit transfers and direct debits in euros and amending Regulation (EC) No 924/2009 (OJ L 94, 30.3.2012, pp 22–37);

7) BIC is the identifier code of the payment service provider as defined in point 16 of Article 2 of Regulation (EU) No 260/2012 of the European Parliament and of the Council.

(7) The Member State which corresponds to IBAN or other identifier of the payment account of the payer by which the payer and their location is unambiguously identified or, in the absence of such identifiers, the Member State which corresponds to BIC or other identifier code by which the payment service provider acting on behalf of the payer and the location thereof are unambiguously identified. The location the payee is deemed to be a Member State or a third country which corresponds either to IBAN of the payment account of the payee or to any other identifier by which the payee and the location thereof are unambiguously identified or, in the absence of such identifiers, a Member State which corresponds to BIC or other identifier code by which the payment service provider acting on behalf of the payee, and the location thereof are unambiguously identified.

§ 37. Invoices

(1) A taxable person is required to issue an invoice for the transfer of goods or provision of services within seven calendar days as of the date on which the goods are dispatched or made available to the purchaser or the services are provided or as of the last day of the tax period specified in subsection 4 of § 11 of this Act or to ensure that the invoice is issued within that term by a person acting in the name of and on account of the taxable person or by the acquirer of the goods or the recipient of the services, except in the case specified in subsection 3 of this section.

(1¹) Where the place of supply of goods is Estonia, a taxable person is required to issue an invoice for the transfer of goods or provision of services in accordance with the requirements of this section. The taxable person issues an invoice complying with the requirements specified in this section also in the case where the place of supply is in a third country and in case the transfer of goods and provision of services, which are subject to taxation in the Member State of the acquirer of goods or recipient of the service, to a person who is registered as a taxable person or a taxable person with limited liability in another Member State, except in the case where the acquirer of goods or a recipient of the service in another Member State issues an invoice on behalf of the taxable person for the goods transferred or service provided thereto.

(1²) A taxable person and a third country person engaged in business issues an invoice in accordance with the requirements of this section where the person implements special arrangements provided in § 43 of this Act upon the provision of service.

(2) Where the supply is created upon receipt of partial or full payment for the goods or services, an invoice is issued within seven calendar days as of the date of receipt of partial or full payment for the goods or services.

(2¹) In the event of the intra-Community supply of goods or upon the provision of service specified in clause 9 of subsection 4 of § 10 of this Act to a taxable person or a taxable person with limited liability in another Member State, a taxable person issues an invoice by the fifteenth day of the month following the month in which the goods are dispatched or made available or the service is provided.

(3) An invoice meeting the requirements of this section need not be issued upon the transfer of goods or provision of services to a natural person for personal use, except in the case of intra-Community distance selling, the transfer of a new means of transport or treating as exports the goods transferred to a third country natural person. An invoice need not be issued upon the intra-Community transfer of goods where the taxable person implements special arrangements provided in § 43 of this Act, and also upon the transfer of goods or provision of services specified in subsection 1, 2 or 2¹ of § 16 of this Act where value added tax is not imposed on the corresponding supply.

(4) A document, including a credit invoice by which an initial invoice is amended, and which contains a reference to the initial invoice is deemed to be an invoice.

(5) An invoice may be issued by the acquirer of goods or the recipient of services in respect of goods transferred or services provided thereto by a taxable person or foreign taxable person where the parties have concluded a written agreement prior to the transaction that the acquirer of the goods or recipient of the services issues an invoice and the taxable person or foreign taxable person accepts it. The agreement must contain the procedure for the acceptance of each invoice by the taxable person or foreign taxable person.

(6) An invoice may be issued on paper or, subject to acceptance by the acquirer of goods or the recipient of services, by electronic means.

(7) The following must be set out in an invoice:

1) the serial number and date of issue of the invoice;

2) the name and address of the taxable person and the registration number of the person as a taxable person;

3) the name and address of the acquirer of goods or the recipient of services;

4) the registration number of the acquirer of goods or the recipient of services as a taxable person where the acquirer of goods or the recipient of services has tax liabilities upon the acquisition of goods or receipt of services;

5) the name or a description of the goods or services;

6) the quantity of the goods or extent of the services;

7) the date of dispatch of the goods or provision of services or the date of receipt of full or partial payment for the goods or services where the date can be determined and differs as of the date of issue of the invoice;

8) the price of the goods or services exclusive of value added tax and any discounts, where these are not included in the price;

9) the taxable amount broken down by different rates of value added tax together with the applicable rates of value added tax or the amount of exempt supply;

10) the amount of value added tax payable, except in the cases provided by law. The amount of value added tax is indicated in euros.

(8) In addition to the information listed in subsection 7 of this section, the following must be set out in an invoice:

1) for supply subject to a zero per cent value added tax rate or exempt supply, reference to the appropriate provision based on which such rate can be applied: to the appropriate clause of subsection 3 or 4 of § 15 or the appropriate subsection and clause of § 16 of this Act, or to the appropriate clause of Article 132, 135, 146, 148, 151 or 156, or Article 136, 142, 152, 153, 159, 160, 346, 347, 382 or subsection 3 of Article 37 of Council Directive 2006/112/EC, or for intra-Community supply of goods, reference to Article 138 of the Council Directive, and for the transport of goods to the Azores or Madeira, or from the Azores or Madeira to Estonia or another Member State, reference to Article 142 of the Council Directive. In case of export of goods it is not necessary to include the reference to the appropriate provision based on which the tax rate is applied on the invoice;

2) in case the acquirer of goods or the recipient of services is liable to pay the tax, the note ‘reverse charge’ where the place of supply of goods is not Estonia and in the cases specified in § 41¹ of this Act;

3) in case the goods sold to a natural person of a third country are treated as export (subsection 2 of § 5), reference to subsection 2 of § 5 of this Act or Article 147 of Council Directive 2006/112/EC;

4) in case of intra-Community transfer of a new means of transport, the particulars certifying that the goods transferred are a new means of transport and reference to clause 2 of subsection 3 of § 15 of this Act or subparagraph a of subsection 2 of Article 138 of Council Directive 2006/112/EC;

6) where special arrangements apply for imposing value added tax on travel services (§ 40), a notation ‘procedure for taxing the margin – travel agencies’;

7) in case special arrangements apply to imposing value added tax on the resale of second-hand goods, original works of art, collectors’ items and antiques (§§ 41 and 42), the notation ‘ procedure for taxing the margin – second-hand goods’, ‘procedure for taxing the margin – works of art’ or ‘ procedure for taxing the margin – collectors’ items and antiques’ correspondingly;

RT, I, 18.02.2014, 2 – entry into force 01.03.2014]

8) in case a foreign person engaged in business has designated a tax representative (§ 20), the taxpayer registration number, the name and address of the tax representative, and reference to subsection 6 of § 20 of this Act or Article 204 of Council Directive 2006/112/EC;

9) upon making an invoice based on subsection 5 of this section, the notation ‘self-billing’.

10) in the case of the implementation of special arrangements for cash accounting of value added tax (§ 44), the notation "cash accounting of VAT ".

(8¹) The references provided in clauses 1, 3–5 and 8 of subsection 8 of this section may be replaced by another clear and unambiguous notation.

(9) A simplified invoice may be issued, provided that the amount indicated on the invoice does not exceed 160 euros, exclusive of value added tax, in the following cases:

1) upon the provision of passenger transport services;

2) in case of invoices printed by parking meters, automated petrol stations and other similar machines.

(10) In the cases specified in subsection 9 of this section, at least the following information is set out in an invoice:

1) the date of issue of the invoice;

2) the name of the taxable person and the taxpayer registration number;

3) the name or description of the goods or services;

4) the taxable amount;

5) the amount of value added tax to be paid.

(11) A taxable person to whom an invoice is issued in compliance with the requirements listed in subsection 10 of this section must indicate their name and the taxpayer registration number on the invoice.

§ 38. Payment and receipt of value added tax

(1) A taxable person or a taxable person with limited liability pays the amount of value added tax due by the date of submission of the value added tax return. The person is required to, in accordance with the same procedure, pay any amount of value added tax which the person has indicated in an invoice or other sales document issued in violation of the provisions of law.

(2) Upon the import of goods value added tax is paid in accordance with the procedure provided in the customs legislation. Upon the import of goods in the case specified in subsection 4 of § 6 of this Act, the person submits information on the import of goods on the customs declaration form and pays value added tax in accordance with the procedure provided in the customs legislation.

(2¹) Upon notifying the tax authority in writing in advance, a taxable person may declare value added tax to be calculated on the import of goods in the value added tax return, where the tax authority has confirmed, in accordance with subsection 2³ of this section, that the taxable person complies with the following requirements:

1) has been registered as a taxable person for at least preceding 12 consecutive months;

4) has not failed to submit tax returns on time within preceding twelve months;

5) has not had tax arrears within the preceding twelve months.

(2²) Upon import of fixed assets, the taxable person does not need to comply with the condition specified in clause 1 of subsection 2¹ of this section. In the case of non-compliance with the specified requirements, the taxable person is required to provide a security to the tax authority at the request of the latter. The tax authority notifies the taxable person of the claim for a security in writing within five working days as of the receipt of a written notice in accordance with subsection 2¹ of this section.

(2³) The tax authority verifies the compliance of the taxable person with the requirements specified in subsection 2¹ of this section, taking into account the specification provided in subsections 2² and 2⁷, and confirms the compliance of the taxable person with the requirements within 30 days as of the receipt of a written notice in accordance with subsection 2¹ or notifies of the non-compliance.

(2⁴) Every month, the tax authority checks the continued compliance of the taxable person with the requirements specified in subsection 2¹ of this section, taking account of the specification provided in subsections 2² and 2⁷, as of the confirmation of the compliance of the taxable person with the requirements provided in subsection 2³, and in the case of the non-compliance of the taxable person with the requirements, the tax authority has the right to suspend the right to declare the value added tax calculated on the import of goods in the value added tax return until the end of the following calendar month. The tax authority has the right to suspend the right to declare the value added tax calculated on the import of goods on the value added tax return for the duration of tax proceedings.

(2⁵) The right to declare the value added tax calculated on the import of goods in the value added tax return is revoked based on the notification of a taxable person in writing or upon the deletion of the taxable person from the register as a taxable person.

(2⁶) The tax authority may revoke the right to declare the value added tax calculated on the import of goods in the value added tax return by a notice of assessment or where such right has been suspended for six consecutive months based on subsection 2⁴ of this section.

(2⁷) In the case of fuel import, a taxable person who is a fuel seller for the purposes of the Liquid Fuel Act needs not comply with the requirements specified in subsection 2¹ of this section where the taxable person has the obligation to provide a security upon import of fuel.

(3) A person specified in clause 2 of subsection 6 of § 3 of this Act must pay value added tax by the twentieth day of the month following the month in which the corresponding invoice or other sales document is issued.

(4) A person specified in clause 3 of subsection 6 of § 3 of this Act must pay, in accordance with the procedure established by the minister in charge of the policy sector, value added tax to the customs authorities within ten calendar days as of the date of delivery to Estonia of the new means of transport acquired from another Member State but not later than by the date of registration of a means of transport.

(5) Upon acquisition of excise goods from another Member State a person specified in clause 4 of subsection 6 of § 3 of this Act pays value added tax by the due date for payment of excise duty provided in the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act.

(5¹) A person specified in clauses 5 and 6 of subsection 6 of § 3 of this Act, who is not registered as a taxable person, pays value added tax without the transfer of goods upon termination of tax storage or upon delivery of excise goods out of the excise warehouse.

(6) Value added tax is paid into the state budget.

(7) The procedure for the payment of value added tax upon intra-Community acquisition of a new means of transport by a person who is not registered as a taxable person or a taxable person with limited liability is established by a regulation of the minister in charge of the policy sector.

(8) The procedure for declaring and paying value added tax upon acquisition of excise goods from another member state by a person who is not registered as a taxable person or a taxable person with limited liability and upon termination of the tax warehousing of the goods without transfer of the goods or taking the excise goods out of the excise warehouse by a person who is not registered as a taxable person is established by a regulation of the minister in charge of the policy sector..

§ 40. Special arrangements for imposing value added tax on travel services

(1) Special arrangements for imposing value added tax on travel services (hereinafter special arrangements) are applicable where a taxable person, acting in their own name, provides services directly related to travel (hereinafter travel services) to travellers, including legal persons and agencies, and uses goods acquired and services received from another Estonian or a foreign person engaged in business upon the provision of travel services.

(2) Special arrangements need not be applied where a taxable person, acting in their own name, provides travel services to another Estonian or foreign taxable person for resale.

(3) The place of supply of travel services taxed under special arrangements is Estonia. The place of supply of travel services is not Estonia where the services received from another taxable person or a person engaged in business used upon the provision of travel services are provided by another person in a third country. Where part of travel services is provided in a third country, Estonia is not deemed to be the place of supply only in respect of travel services related to services provided in a third country.

(4) The taxable value of a travel services under special arrangements of taxation is the difference between the total amount to be paid for the services to a taxable person by the recipient of the travel service and the total cost of goods acquired and services received, inclusive of value added tax, by the taxable person from other taxable persons or persons engaged in business for the purpose of directly servicing the recipient of the services, which is reduced by the amount of value added tax included therein.

(5) Based on a reasoned written request from a taxable person, the tax authority may grant permission to the taxable person to use the average margin of the calendar year preceding the provision of the services upon calculating the taxable value of travel services. The margin is the ratio between the total cost of goods acquired and services, inclusive of value added tax, received by the taxable person from other taxable persons for the purpose of providing services to the recipient of travel services, and the total amount payable by the recipient of services to the taxable person for the services. A taxable person that uses, with the permission of the tax authority, the average margin of the calendar year preceding the provision of the travel services upon the calculation of the taxable value of travel services, is required to use that margin until the end of the calendar year and to adjust the taxable value of travel services at the end of the calendar year for the entire calendar year, proceeding from the taxable value of travel services calculated in accordance with subsection 4 of this section.

(6) A taxable person that applies special arrangements does not have the right to deduct, from value added tax calculated in accordance with subsection 4 or 5 of this section, input value added tax which the person has paid to another taxable person upon the acquisition of goods or receipt of services directly for the purpose of servicing the recipient of the travel service.

(7) A taxable person treats all services provided and goods transferred to a recipient of travel services under special arrangements as a single travel service.

(8) A taxable person applying special arrangements does not indicate on the invoice issued for travel services taxable under special arrangements the amount of value added tax calculated on the taxable value paid upon the acquisition of goods or receipt of services or calculated in accordance with subsections 4 or 5 of this section.

(9) A taxable person that provides travel services taxable under special arrangements and services that are not subject to special arrangements is required to keep separate records for travel services provided under special arrangements and goods acquired or services received for the provision of those services, and for other services and goods acquired or services received for the provision of those services.

(11) The procedure for adjustment of the taxable value of travel services by a taxable person using the average margin is established by a regulation of the minister in charge of the policy sector.

§ 41. Special arrangements for imposing value added tax on resale of second-hand goods, original works of art, collectors’ items and antiques

(1) A taxable person that acquires second-hand goods, original works of art, collectors’ items or antiques for resale and does not use the goods may, upon resale, comply with the procedure for the calculation of taxable value provided in subsection 3 of this section where the taxable person has acquired the goods:

1) from a person who is not a taxable person;

2) from a taxable person of Estonia or another Member State who has not added value added tax to the price of goods upon transfer of the goods and who has not been able to deduct input value added tax paid upon acquisition of the goods;

3) from a taxable person of Estonia or another Member State who complies with special arrangements for imposing value added provided in this section upon resale of second-hand goods, original works of art, collectors’ items or antiques.

(2) Second-hand goods are movable property that have been used and which are usable in their current form or after repair, other than original works of art, collectors’ items and antiques, precious metals and precious stones. Original works of art are goods listed in Part A of Annex IX to Council Directive 2006/112/EC, whereby a taxable person may not treat the goods specified in points 5-7 of Part A of Annex IX to Council Directive 2006/112/EC as original works of art. Collectors’ items are philatelic items with CN code 9704 00 00 and a zoological, botanical, mineralogical, anatomical, historical, archaeological, paleontological, ethnographic or numismatic collection and part thereof with CN code 9705 00 00). Antiques are items over 100 years old with CN code 9706 00 00.

(3) In the case of the resale of second-hand goods, original works of art, collectors’ items or antiques, the taxable value of supply is the difference between the sales price and purchase price of the goods, which has been reduced by the amount of value added tax included therein. Where the procedure for calculating the taxable value provided in the first sentence of this subsection is difficult to follow in respect of each individual item of second-hand goods, the tax authority may, based on a reasoned written request, grant the taxable person the right to calculate the taxable value to be declared in the tax period upon the resale of those goods based on the difference between the sale and purchase prices of the specified goods resold and purchased during the entire tax period, reduced by the amount of value added tax included therein. Where the taxable value to be declared in the tax period is negative, it is not reflected in the value added tax return and is carried forward to the next tax period in the daily accounting of the value added tax of the taxable person. Where the taxable value calculated in accordance with the procedure provided in this subsection is positive, it is reduced by the negative taxable value carried forward from previous tax periods until it reaches zero.

(4) A taxable person who follows the procedure for calculating the taxable value provided in subsection 3 of this section does not indicate on the invoice or other sales document issued the amount of value added tax calculated on the taxable value paid upon the acquisition of goods or calculated based on subsection 3 of this section.

(5) Where a taxable person has notified the tax authority accordingly, the person may also follow the procedure for calculating taxable value provided in subsection 3 of this section upon the resale of the following goods:

1) original works of art, collectors’ items and antiques imported by the person;

2) original works of art sold to the taxable person by an author, copyright holder or a taxable person who does not follow special arrangements for imposing value added tax provided in this section upon the resale of the work.

(6) A taxable person who applies the option provided in subsection 5 of this section is required to, upon resale of the goods specified in that subsection, comply with the procedure for calculating the taxable value provided in subsection 3 of this section for at least two calendar years, as of the date of implementation of the option provided in subsection 5 of this section.

(7) In the case of the supply of original works of art, collectors’ items or antiques imported by a taxable person, the taxable value calculated in accordance with subsection 1 of § 13 of this Act to which the value added tax calculated on the taxable value is added, is deemed to be the purchase price.

(9) Upon taxation of the supply created thereby, a taxable person does not have the right to deduct, based on the procedure for calculating the taxable value provided in subsection 3 of this section, the value added tax that the taxable person has paid:

1) upon the import of original works of art, collectors’ items or antiques;

2) upon the acquisition of an original work of art from an author, a copyright holder or a taxable person who, upon the resale of this work, does not comply with special arrangements for imposing value added tax provided in this section.

(10) A taxable person is required to keep separate records of the acquisition and disposal of goods transferred in accordance with the procedure for calculating the taxable value provided in subsection 3 of this section. A taxable person must have documents certifying the acquisition of goods from the person specified in subsection 1 of this section and the compliance of the goods with the criteria specified in subsection 2 of this section.

§ 41¹. Special arrangements for imposing value added tax on immovable property, scrap metal, precious metal and metal products

(1) Where a taxable person transfers goods specified in subsection 2 of this section to another taxable person, the acquirer of the goods pays the transferor the sales price exclusive of value added tax. The acquirer of goods calculates the amount of the value added tax indicated on the invoice issued for the transaction as the amount of value added tax payable by the acquirer instead of the transferor.

(2) Special arrangements provided in this section are applied to the supply of the following goods:

1) immovable property or part thereof about addition of value added tax to the taxable value of which a taxable person is required to notify the tax authority in accordance with subsection 3 of § 16 of this Act;

2) scrap metal for the purposes of the § 104 of the Waste Act..

3) investment gold about addition of value added tax to the taxable amount of which a taxable person is required to notify the tax authority in accordance with subsection 3 of § 16 of this Act.

4) precious metal for the purposes of the Precious Metal Articles Act, except for investment gold and metal material containing precious metals, including waste containing precious metals, where they are transferred to a taxable person not holding waste permit.

5) metal products with CN-codes 7208-7220 (except products with code 721691, welding wire and welding rods) 7222, 7225, 7226, 7228 (except welding rods), 73011000, 730300–7306 (except ventilation, aspiration, smoke and rainwater pipes), 73081000, 73082000, 73121061, 73121069, 731420 and 73143900, which are specified in the Commission Implementing Regulation (EU) No 1754/2015/ amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 285, 30.10.2015, pp 1–926).

(3) Upon acquisition of the goods specified in subsection 2 of this section the acquirer of the goods records the value added tax of the taxable transaction and the amount of value added tax payable on the goods in their value added tax return in the tax period during which the invoice for such goods is received.

(4) In the case specified in subsection 1 of this section the purchaser deducts input value added tax from the calculated value added tax in accordance with the provisions of this Act in the same tax period when the purchaser calculates the amount of the value added tax as the value added tax paid by the purchaser.

(5) The transaction specified in subsection 1 of this section must be set out on the invoice separately with the indication „reverse charge“. Where the supply has not been fully effected by the time of submission of the invoice in accordance with § 11 of this Act, a separate invoice must be issued for the transaction specified in subsection 1 of this section with the indication „reverse charge“.

§ 42. Special arrangements for imposing value added tax on sale of second-hand goods, original works of art, collectors’ items and antiques at public auctions

(1) Where second-hand goods, original works of art, collectors’ items or antiques are sold at a public auction, the taxable value of the supply of the organiser of the auction is the difference between the sales price and the price paid to the principal, which has been reduced by the value added tax included therein.

(2) The sales price of the goods is the amount paid by the purchaser to the organiser of the auction based on an invoice or other sales documents issued by the organiser. The sales price of the goods includes the price of the goods at the public auction and other amounts that the purchaser of the goods is required to pay to the organiser of the auction in relation to the acquisition of goods.

(3) The price payable to the principal is equal to the difference between the price of the goods at the public auction and the commission obtained or to be obtained under the contract by the organiser of the public auction from the principal.

(4) The organiser of a public auction does not indicate the amount of value added tax calculated on the taxable value determined in accordance with subsection 1 of this section on an invoice or other sales document issued to a purchaser.

(5) The procedure for calculating taxable value provided in subsection 1 of this section is applied where the organiser of a sale by public auction acts based on a commission contract concluded with a person specified in clauses 1–3 of subsection 1 of § 41 of this Act, according to which commission is payable on the sale of goods at the public auction.

(6) A taxable person acting as an organiser of a sale by public auction to whom goods are transported under a contract specified in subsection 5 of this section must issue a statement to the principal indicating the price of the goods at the public auction and the amount received upon deduction of commission payable by the principal from the auction price. The statement also serves as an invoice issued by the principal to the organiser of a sale by public auction.

§ 43. Special arrangements for imposing value added tax on services, intra-Community distance selling and transfer of goods through online marketing (järg)

(1) Upon taxation with value added tax of goods transferred through services, intra-Community distance selling and online marketplace (hereinafter in this section goods and services covered by special arrangements), a taxable person and a third country person engaged in business (hereinafter in this section a person implementing special arrangements) may implement special arrangements for imposing value added tax provided in this section (hereinafter in this section special arrangements), provided that:

1) a taxable person whose company has a registered office in Estonia provides services the place of supply of which is in another Member State to a person who is not registered as a taxable person or a taxable person with limited liability;

2) a taxable person whose company has a registered office outside the Community but whose permanent business establishment is located in Estonia provides a service the place of supply of which is in another Member State to a person, who is not registered as a taxable person or a taxable person with limited liability;

3) a third country person engaged in business, whose company has a registered office outside the Community and who has no permanent business establishment in the Community, provides services to a person from a member state, not registered as a taxable person or a taxable person with limited liability;

4) a taxable person whose company has a registered office in Estonia carries out intra-Community distance selling;

5) a taxable person whose company has a registered office in Estonia enables a taxable person whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community to carry out intra-Community distance selling through online marketplace;

6) a taxable person whose company has a registered office outside the Community but whose permanent business establishment is in Estonia carries out intra-Community distance selling;

7) a taxable person whose company has a registered office outside the Community but whose permanent business establishment is in Estonia enables a taxable person whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community to carry out intra-Community distance selling through online marketplace;

8) a taxable person whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community carries out intra-Community distance selling from Estonia;

9) a taxable person whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community enables a taxable person whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community to carry out intra-Community distance selling from Estonia through online marketplace;

10) a taxable person whose company has a registered office in Estonia enables a taxable person whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community to transfer goods to a person who is not registered as a taxable person or a taxable person with limited liability where the delivery of the goods transferred to the acquirer begins and ends in the same Member State, including Estonia;

11) a taxable person whose company has a registered office outside the Community but whose permanent business establishment is in Estonia enables, through online marketplace, a taxable person whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community to transfer goods located in the Community to a person not registered as a taxable person or a taxable person with limited liability where the delivery of the goods to be transferred to the acquirer begins and ends in the same Member State, including Estonia;

12) a taxable person whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community enables, through online marketplace, a taxable person whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community to transfer goods located in Estonia to a person who is not registered as a taxable person or a taxable person with limited liability in Estonia.

(2) Special arrangements are applied to the taxation of all the goods and services covered by special arrangements.

(3) A taxable person whose company has a registered office or permanent business establishment in Estonia does not implement special arrangements upon provision of such services where the place of supply is Estonia or in another Member State where the permanent business establishment of the person is located.

(4) Where a taxable person whose company has a registered office outside the Community and whose permanent business establishment is in Estonia and another Member State has chosen to implement special arrangements in Estonia, such decision is binding on the taxable person in the calendar year in which the implementation of special arrangements begins and in two consequent calendar years.

(5) Where a taxable person whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community carries out intra-Community distance selling from Estonia and another Member State or enables a taxable person whose company has a registered office outside the Community and who does not have a permanent business establishment in the Community to transfer goods located in Estonia to a person who is not registered as a taxable person or a taxable person with limited liability in Estonia and another Member State, and has chosen to implement special arrangements in Estonia, such decision is binding on the taxable person in the calendar year in which the implementation of special arrangements begins and in two consequent calendar years.

(6) A taxable person, who wishes to implement special arrangements, or a third country person engaged in business specified in clause 3 of subsection 1 of this section, who wishes to register in Estonia based on special arrangements, submits a request therefor through: the electronic portal.

(7) The tax authority assigns a registration number to a third country person engaged in business for the implementation of a specific special arrangement and notifies the person thereof electronically within five working days as of the receipt of the request.

(8) Special arrangements are implemented as of the first day of the quarter which is following the quarter when the taxable person submitted a request to the tax authority for the implementation of special arrangements or the third country person engaged in business was registered.

(9) Where a person transfers goods or provides a service covered by special arrangements before the date specified in subsection 8 of this section, special arrangements are implemented as of the first day of the transaction covered by special arrangements on condition that the person has submitted a request for the implementation of special arrangements at the latest on the tenth date of the month following the month of the transfer of the goods or provision of services covered by special arrangements.

(10) A person implementing special arrangements submits a value added tax return for the goods and services covered by special arrangements for each quarter through the electronic portal on the website of the tax authority. The value added tax return for goods and services covered by special arrangements is submitted by the end of the first month of the next quarter. The person implementing special arrangements pays the amount of the value added tax payable by the date of submission of the value added tax return specified.

(11) Where a taxable person implementing special arrangements has a permanent business establishment in another Member State from which the person provides services to a person who is not registered as a taxable person or a taxable person with limited liability, where the place of supply is elsewhere in the Member State where the taxable person does not have a permanent business establishment, the supply of such services is declared on the value added tax return of the goods and services covered by special arrangements.

(12) Where goods and services covered by special arrangements have been paid for in a currency other than the euro, in order to express the necessary data in euros on the value added tax return for the goods and services covered by special arrangements, the exchange rate of the euro is applied, determined by the European Central Bank, which was valid on the last day of the quarter preceding the quarter in which the value added tax return is submitted, or where it is not published, the exchange rate of the next publication date.

(13) Changes on the value added tax return for goods and services covered by special arrangements are presented on the relevant value added tax return for the current quarter during three years as of the date of submission of the original declaration, indicating the Member State in which the goods were transferred or services provided under special arrangements and the period and amount of the value added tax for which the change is necessary.

(14) A person implementing special arrangements may not, relating to their taxable activities covered by special arrangements, deduct the value added tax as input value added tax from their value added tax payable, which is paid in the Member State in respect of which specific special arrangements are implemented, but the person has the right to claim a refund thereof from the tax authorities of the relevant Member State.

(15) A person implementing special arrangements is required to keep for ten years, as of 31 December of the year of transaction, the following data:

1) the Member State to which the goods or services were transferred;

2) the description and quantity of the goods transferred or the type of services provided;

3) the date of the transfer of goods or provision of services;

4) the taxable amount and the currency used;

5) subsequent increase or decrease of the taxable amount;

6) the applicable value added tax rate;

7) the amount of the value added tax payable and the currency used;

8) the date and amount of the receipt of payments received;

9) advance payments received before the transfer of goods or provision of services;

10) in the case of the issue of an invoice, information included on the invoice;

11) in the case of services, information which is used to determine the location or residence of the customer and, in the case of goods, information which is used to determine the place of dispatch and the destination of the delivery of goods to the consignee;

12) evidence of the possible return of the goods, including the taxable amount and the applicable value added tax rate.

(16) A person implementing special arrangements is required to make the information specified in subsection 15 of this section immediately available electronically at the request of the tax authority.

(17) A person implementing special arrangements notifies the tax authority through the electronic portal on the webpage of the tax authority of the termination of the transfer of goods or provision of services covered by special arrangements, of the change in their activities in such a manner that they no longer fulfil the requirements necessary for implementation of special arrangements and the change in the data presented in the request, specified in subsection 6 of this section, by the tenth date of the month following the month of changes. The tax authority is notified of the termination of the implementation of special arrangements where the person continues to transfer goods or provide services covered by special arrangements, at least 15 days before the end of the quarter in which the person intends to terminate the implementation of special arrangements.

(18) The tax authority terminates the implementation of special arrangements to a taxable person or deletes a third country person engaged in business from the register where at least one of the following circumstances exists:

1) the person implementing special arrangements has declared that the person no longer transfers goods or provides services covered by special arrangements;

2) the person implementing special arrangements has not transferred goods or provided services taxable under special arrangements for two years;

3) the person implementing special arrangements no longer complies with the requirements for the implementation of special arrangements;

4) the person implementing special arrangements has repeatedly failed to comply with the requirements established for the implementation of special arrangements.

(19) The tax authority sends a decision to terminate the implementation of special arrangements with regard to the person or to delete the person electronically to the person implementing special arrangements. The decision enters into force on the first day of the quarter following the quarter in which the decision was sent. Where the termination of special arrangements is related to the change of the registered office or permanent business establishment of the person, the decision takes effect on the date of that change. Where the termination of the implementation of special arrangements or the deletion of a person implementing special arrangements from the register is related to the repeated failure of that person to comply with the requirements established for the implementation of special arrangements, the decision enters into force on the day following its electronic transmission.

(20) Where the tax authority terminates the implementation of special arrangements with regard to a taxable person or deletes a third country person engaged in business because the person has repeatedly failed to comply with the requirements established for the implementation of special arrangements, the person does not have the right to implement special arrangements and the special arrangements specified in § 43¹ of this Act within two years as of the quarter following the quarter in which the decision to terminate implementation of special arrangements enters into force.

(21) For the purposes of this section, non-compliance with the requirements established for the implementation of special arrangements is repeated where at least one of the following circumstances occurs:

1) the tax authority has electronically issued reminders to the person implementing special arrangements for three immediately preceding quarters of the obligation to submit value added tax declarations for goods and services covered by special arrangements, but these declarations have not been submitted with regard to any relevant quarter within ten days as of the sending of the reminder;

2) the tax authority has issued reminders of the value added tax arrears electronically to the person implementing special arrangements for three immediately preceding quarters, but the person has not paid the amount of value added tax due for any relevant quarter within ten days as of the sending of the reminder, except where the unpaid amount is less than 100 euros per quarter;

3) at the request of the tax authority and one month after the reminder was sent by the tax authority, the person implementing special arrangements has not made information specified in subsection 15 of this section electronically available.

(22) A third country person engaged in business, specified in clause 3 of subsection 1 of this section, who has chosen to use special arrangements, cannot appoint a tax representative to themselves.

§ 43¹. Special arrangement for taxation of distance selling of goods imported from third Countries

(1) Special arrangements for taxation of distance selling of goods imported from a third country (hereinafter in this section special arrangements) are applied to the consignment of goods the actual value of which does not exceed 150 euros in the case of distance selling of goods imported from a third country. Special arrangements are not applied to excise goods.

(2) The following persons may implement special arrangements (hereinafter in this section person implementing special arrangements):

1) a taxable person whose company has a registered office in Estonia and who carries out distance selling of goods imported from a third country;

2) a taxable person whose company has a registered office outside the Community but whose permanent business establishment is located in Estonia and who carries out distance selling of goods imported from a third country;

3) a taxable person whose company has a registered office in Estonia and who enables the distance selling of goods imported from a third country through an online marketplace;

4) a taxable person whose company has a registered office outside the Community but whose permanent business establishment is in Estonia and who enables the distance selling of goods imported from a third country through an online marketplace;

5) a taxable person specified in clauses 1–4 of this subsection and a third country person engaged in business who does not have a registered office or permanent business establishment in the Community, or a taxable person of another Member State, who carries out distance selling of goods imported from a third country or enables distance selling of goods imported from a third country through an online marketplace and who is represented by an intermediary;

6) a third country person engaged in business, who does not have a registered office or a permanent business establishment in the Community, with whose country of establishment the Union has concluded a mutual assistance agreement concerning administrative cooperation, the fight against fraud and the recovery of claims related to the value added tax, which complies in the scope to the provisions of Council Directive 2010/24/EU concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures (OJ L 84, 31.03.2010, pp 1–12) and Council Regulation (EU) No 904/2010 on administrative cooperation and combating fraud in the field of value added tax (recast) (OJ L 268, 12.10.2010, pp 1-18), and which carries out distance selling of goods from their country of establishment.

(3) For the purposes of this section an intermediary is a taxable person whose company has a registered office in Estonia and who has been appointed by the person implementing special arrangements as the person who is required to perform the obligations provided in special arrangements on their behalf and in their name. A person who is solvent and has an impeccable reputation and who has no tax arrears has the right to act as an intermediary.

(4) A person implementing special arrangements is required to apply special arrangements for all distance selling of goods imported from a third country.

(5) Where a taxable person, whose company has a registered office outside the Community but whose permanent business establishment is in Estonia and another Member State, has chosen to implement special arrangements in Estonia, such decision is binding on the taxable person in the calendar year of the commencement of implementation of special arrangements and in two consequent calendar years.

(6) A person implementing special arrangements may appoint one intermediary at a time.

(7) The time of the supply of distance selling of goods subject to taxation under special arrangements is the day on which the person implementing special arrangements has received confirmation of payment for the goods or payment obligation or the notice of payment authorization.

(8) A taxable person, a third country person or an intermediary who wishes to commence the implementation of special arrangements submits a request for that purpose on the website of the tax authority through an electronic portal.

(9) In order to implement special arrangements, the tax authority assigns a taxpayer registration number to a taxable person, a third country person and an intermediary for each person whom they have been appointed to represent. The intermediary is issued a taxpayer registration number in the name and on behalf of the person implementing special arrangements for the performance of the obligations provided in special arrangements. The tax authority notifies the person of the registration number electronically. The specific registration number is only used for specific special arrangements.

(10) The right to implement special arrangements begins as of the day when the person implementing special arrangements or the intermediary has been issued the taxpayer registration number specified in subsection 9 of this section.

(11) A person implementing special arrangements or an intermediary submits a value added tax return for the distance selling of goods imported from a third country on a monthly basis through the electronic portal on the website of the tax authority. The value added tax return for the distance selling of imported goods is submitted by the end of the month following the month of supply. The person implementing special arrangements or intermediary is required to pay the amount of the value added tax due by the date of submission of the value added tax return for the distance selling of imported goods.

(12) Amendments to the value added tax return for distance selling of imported goods are submitted on the relevant value added tax return for the current month within three years as of the date of the original declaration, indicating the Member State, the period for which the submitted value added tax return is amended and the amount of the value added tax for which the amendment is necessary.

(13) Where the goods covered by special arrangements have been paid for in a currency other than the euro, the exchange rate of the euro determined by the European Central Bank valid on the last day of the month preceding the month in which the value added tax return was submitted or where the exchange rate for that day is not published, the exchange rate on the next date of publication is used for expressing the necessary data in euros on the value added tax return for distance selling of goods imported from a third country.

(14) A person implementing special arrangements may not, relating to their taxable activities covered by special arrangements, deduct the value added tax as input value added tax from their value added tax payable, which is paid in the Member State in respect of which specific special arrangements are implemented, but the person has the right to claim a refund thereof from the tax authorities of the relevant Member State.

(15) A person implementing special arrangements and an intermediary are required to keep the following information for each of their principals for a period of ten years as of 31 December of the year in which the transaction takes place:

1) the Member State to which goods are transported;

2) the description and quantity of goods;

3) the date of supply of goods;

4) the taxable amount in euros;

5) the subsequent increase or decrease of the taxable amount;

6) the applicable value added tax rate;

7) the amount of value added tax payable in euros;

8) the date of the receipt of payments and the amount in euros;

9) upon issue of an invoice the information included on the invoice;

10) the information used to determine the place of dispatch and the destination of the delivery of goods to the consignee;

11) the evidence of the possible return of goods, including the taxable amount and the applicable value added tax rate;

12) the order number or transaction number;

13) the number of the consignment where the person implementing special arrangements is directly related to the transfer of goods.

(16) A person implementing special arrangements or an intermediary is required to make the information specified in subsection 15 of this section immediately available electronically at the request of the tax authority.

(17) A person implementing special arrangements or an intermediary notifies through the electronic portal on the webpage of the tax authority of the termination of the implementation of special arrangements, of the change of their activities in such a manner that they no longer comply with the requirements provided for the implementation of special arrangements, and of the change in the data submitted in the request specified in subsection 8 of this section by the tenth date of the month following the month of changes. The tax authority is notified of the termination of the implementation of special arrangements for at least 15 days before the end of the month preceding the month in which the person intends to terminate the implementation of special arrangements.

(18) The tax authority deletes the person implementing special arrangements from the register where at least one of the following circumstances occurs:

1) the person implementing special arrangements has notified the tax authority that they do not carry out distance selling of goods imported from a third country;

2) the person implementing special arrangements has not carried out distance selling of goods imported from a third country based on special arrangements for two years;

3) the person implementing special arrangements no longer complies with the requirements for the implementation of special arrangements;

4) the person implementing special arrangements has repeatedly failed to comply with the requirements established for the implementation of special arrangements.

(19) The tax authority deletes the intermediary and the person represented by that intermediary from the register where at least one of the following circumstances exists:

1) the intermediary has not acted as an intermediary for two consecutive quarters;

2) the intermediary does not comply with the requirements for acting as an intermediary;

3) the intermediary has repeatedly failed to comply with the requirements established for the implementation of special arrangements.

(20) The tax authority deletes the person represented by the intermediary from the register where at least one of the following circumstances exists:

1) the intermediary has informed the tax authority that the person represented by the intermediary no longer carries out distance selling of goods imported from a third country;

2) the person has not carried out distance selling of goods imported from a third country based on special arrangements within two years;

3) the person no longer complies with the requirements for the implementation of special arrangements;

4) the person has repeatedly failed to comply with the requirements established for the implementation of special arrangements;

5) the intermediary has informed the tax authority that they no longer represent the person concerned.

21) The tax authority sends electronically the decision to delete the person from the register to the person implementing special arrangements and to the intermediary. The decision enters into force on the first day of the month following the month of its issue. Where the deletion from the register of a person implementing special arrangements or an intermediary is related to the change of the registered office or permanent business establishment of the person implementing special arrangements or the intermediary, the decision enters into force on the date of that change. Where the deletion from the register of the person implementing special arrangements or the intermediary is related to the repeated failure by the person implementing special arrangements or the intermediary to comply with the requirements established for the implementation of special arrangements, the decision enters into force on the day following its electronic transmission.

(22) Where the tax authority deletes the person implementing special arrangements from the register because the latter has repeatedly failed to comply with the requirements established for the implementation of special arrangements, the person does not have the right to implement special arrangements and the special arrangements provided in § 43 of this Act within two years as of the month following the month of the entry into force of the decision to delete from the register. Where the tax authority removes the intermediary from the register because the latter has repeatedly failed to comply with the requirements established for the implementation of special arrangements, the person does not have the right to act as an intermediary for two years as of the beginning of the month when the intermediary was deleted from the register.

(23) The number assigned for the implementation of special arrangements based on subsection 9 of this section is valid for up to two months after the entry into force of the decision to delete the person from the register only in the case of transactions covered by special arrangements which have been made before the entry into force of the decision. The provision is not applied with regard to the person implementing special arrangements, who has been deleted from the register for a repeated failure to comply with the requirements established for the implementation of special arrangements, including with regard to the person whose intermediary has been deleted from the register for a repeated failure to comply with the requirements specified above.

(24) For the purposes of this section, non-compliance with the requirements established for the implementation of special arrangements is repeated where at least one of the following circumstances occurs:

1) the tax authority has issued reminders electronically to the person implementing special arrangements or to the intermediary concerning three months immediately preceding the obligation to submit the value added tax return for the distance selling of imported goods, but these declarations have not been submitted for any of the relevant months within ten days as of the sending of the reminder;

2) the tax authority has electronically issued reminders of the value added tax arrears to the person implementing special arrangements or to the intermediary for three immediately preceding months, but the person has not paid the amount of the value added tax payable for any relevant month within ten days as of the sending of the reminder, except in the case the unpaid amount is less than 100 euros per each month;

3) upon the request of the tax authority and one month after the reminder was sent by the tax authority, the person implementing special arrangements or the intermediary has not made the information specified in subsection 15 of this section electronically available.

§ 43². Special arrangements for declaration and payment of value added tax on imported goods

(1) Special arrangements for declaring and paying value added tax on the goods imported from a third country (hereinafter in this section special arrangements) are applied to imported consignments whose actual value does not exceed 150 euros and to which special arrangements for distance selling of the goods imported from a third country do not apply. Special arrangements are not applied to excise goods.

(2) Special arrangements may be implemented by a taxable person (hereinafter in this section person implementing special arrangements), who:

1) submits to the customs authorities a customs declaration for imported goods as an indirect representative on behalf of the consignee of the goods;

2) is the possessor of the goods for the purposes of the Customs Code;

3) delivers the goods to the consignee located in Estonia.

(3) A person implementing special arrangements collects the value added tax from the person to whom the goods are sent and on behalf of whom the customs declaration is submitted.

(4) A person implementing special arrangements pays on behalf of the consignee within a calendar month the amount of the value added tax payable determined on the customs declarations submitted to the tax authority, based on the summary declaration, by the 16th date of the following month. The summary declaration is prepared by the tax authority based on the customs declarations submitted by the person during the calendar month and is submitted to the person at the latest on the first day of the month following the month of submission of the customs declarations. The amount payable on the summary declaration is adjusted in accordance with the changes in the data of the customs declarations submitted by the person in previous periods.

(5) The value added tax rate of 24 per cent is applied to the taxation of an imported consignment under special arrangements.

(6) A person implementing special arrangements is required to make electronically available additional documents related to the customs declaration specified in subsection 4 of this section at the request of the tax authority.

§ 44. Special value added tax arrangements for cash accounting

(1) A taxable person whose supply of transactions specified in subsection 3 of § 19¹ of this Act, where the place of supply is Estonia, did not exceed 200,000 euros in the previous calendar year or as of the beginning of the current calendar year, may apply special value added tax arrangements for cash accounting (hereinafter in this section special arrangements). The person informs the tax authority in writing of the tax period as of which the person starts implementing special arrangements, either upon submitting their application for registration as a taxable person or at the latest during the tax period prior to the implementation of special arrangements. The threshold specified in this subsection is calculated by the taxable person on a cash basis. Upon calculation of the threshold, the transfer of fixed assets and the occasional transfer of immovable property as goods are not taken into account.

(2) A person that wishes to implement special arrangements keeps records of the registration obligation threshold specified in subsection 1 of § 19 of this Act on the cash basis. Value added tax must be added to the entire transaction amount for a transaction which exceeds the threshold.

(3) Upon using special arrangements, the date on which the action specified in clause 2 or 3 of subsection 1 of § 11 of this Act was taken is deemed the time of supply.

(4) In the event of the free transfer of goods by a taxable person that uses special arrangements, the date on which the goods are dispatched or made available to the purchaser is the time of supply.

(6) Where the dispatched goods and services provided are not paid for and the taxable person that uses special arrangements is deleted from the register of taxable persons the supply is deemed to have been effected in the tax period for which the last value added tax return is to be submitted.

(7) Upon implementation of special arrangements, the right to deduct input value added tax on the goods acquired or services provided arises after payment for the goods or services. Upon partial payment for the goods acquired or services provided the right to deduct input value added tax arises on the portion paid for the goods or services.

(8) To waive special arrangements a taxable person notifies the tax authority in writing at the latest during the tax period preceding the waiver and, in the case, provided in subsection 9 of this section at the latest in the first tax period from which special arrangements were waived.

(9) A taxable person is required to waive the implementation of special arrangements in case the supply of the transactions of the taxable person specified in subsection 3 of § 19¹ of this Act, where the place of supply is Estonia, exceeds 200,000 euros as of the beginning of the calendar year. Special arrangements are not implemented as of the first day of the calendar month following the creation of the supply in the specified amount. Upon calculating the threshold, the transfer of fixed assets and the occasional transfer of immovable property as goods are not taken into account.

(10) After termination of the implementation of special arrangements a taxable person calculates the value added tax on the goods dispatched and made available and services provided, and input value added tax on the goods acquired and services received during the period of implementing special arrangements in accordance with the procedure provided in this section. The general procedure for value added tax accounting is applied to the supply that was effected before implementation of special arrangements and the calculation of input value added tax on the goods acquired and services received. The general rules for value added tax accounting are applied to the calculation of input value added tax on the supply and purchased goods acquired and services received prior to the implementation of special arrangements.

(11) Special arrangements are not implemented for the following transactions and acts:

1) import of goods;

2) intra-Community supply and acquisition of goods;

3) provision to a taxable person or to a taxable person with limited liability of another Member State of such services specified in clause 9 of subsection 4 of § 10 of this Act where the place of supply is not Estonia;

4) receipt from a foreign person engaged in business of such services where the place of supply is Estonia;

§ 44¹. Tax warehousing

(1) Tax warehousing means placing the Union goods specified in Annex V to Council Directive 2006/112/EC to a place approved by the tax authority for the purpose of application of value added tax incentives. A tax warehouse is a place where tax warehousing is carried out.

(2) The excise warehousekeeper must have a security in order to guarantee performance of tax obligations which may arise with regard to the goods stored in the tax warehouse. In the cases not regulated in the Taxation Act the provisions concerning customs debt provided in the customs legislation are applied to the provision, acceptance, release and use of the security and the calculation of the amount thereof.

(3) A permit issued by the tax authority is required for operating a tax warehouse. A person wishing to operate a tax warehouse submits a written application including the information necessary for obtaining a permit for operating a tax warehouse.

(4) The tax authority issues a permit for operating a tax warehouse where the following requirements are met:

1) the accounting of the applicant enables the tax authority to check the activities of the applicant;

2) the applicant keeps accurate accounts concerning the movement of the goods;

3) the applicant has no tax arrears;

4) the applicant has submitted accurate data to the tax authority;

5) the application is economically justified.

(5) The tax authority may refuse to issue a permit for operating a tax warehouse where, within a period of six months before the date of submission of the application, the applicant has been sanctioned for a misdemeanour provided in §§ 154 or 156 of the Taxation Act, or the applicant has committed a criminal offence provided in §§ 389¹ or 389² of the Penal Code where criminal records have not been expunged from the criminal records database.

(6) The excise warehousekeeper keeps stock records of all the goods admitted to the tax warehouse in a form approved by the tax authority. The goods are entered into the warehouse stock records without delay after the relevant person brings the goods to the tax warehouse. The stock records must enable the tax authority to identify the goods and record the transactions carried out with the goods as well as the movements of the goods.

(7) The goods are deemed to be admitted to the tax warehouse after they have been entered into the warehouse stock records. Tax warehousing is deemed to be terminated after the goods have been deleted from the warehouse stock records.

(8) Where, as a result of processing, the goods no longer belong to the list of goods specified in Annex V to Council Directive 2006/112/EC, the tax warehousing of the goods is immediately terminated.

(9) The goods which are admitted to a tax warehouse may be transferred to another tax warehouse without suspending the tax warehousing. The keeper of the sending tax warehouse is liable for the performance of the tax obligation until the goods are entered into the stock records of the other tax warehouse. Where goods are unlawfully taken out of the place prescribed for tax warehousing, the keeper of the tax warehouse and the person who took the goods out bear solidary liability for the performance of the tax obligation provided in clause 5 of subsection 6 of § 3 of this Act.

(10) Goods missing from a tax warehouse are deemed to be goods unlawfully taken out of the place prescribed for tax warehousing. Upon comparing the results of measurements of liquids and bulk with the data submitted concerning such goods, the tax authority may take into account the measurement uncertainty of the measurement process. Where goods are lost to an extent which exceeds the measurement uncertainty, the warehousekeeper must prove to the tax authority that the loss occurred by virtue of unforeseeable circumstances, a natural process or the particular nature of the goods.

(11) The tax authority may suspend a permit for operating a tax warehouse for up to two calendar months and set a term for elimination of the circumstances based on which the permit was suspended, for compliance with the requirements of the tax authority or for taking the goods out of the tax warehouse, where:

1) within a period of six months before the date of suspension of the permit, the warehousekeeper has been sanctioned for a misdemeanour provided in §§ 154 or 156 of the Taxation Act or the warehousekeeper has committed a criminal offence specified in §§ 389¹ or 389² of the Penal Code;

2) the warehousekeeper has tax arrears;

3) false information has been submitted upon application for the permit;

4) the operation of the tax warehouse does not conform to the requirements for operating a tax warehouse;

5) the obligation to provide a tax warehouse security has not been performed.

(12) A permit for operating a tax warehouse is invalidated based on a written application of the warehousekeeper or on the initiative of the tax authorities. The tax authority may revoke a permit where:

1) the permit was suspended prior to revocation on the grounds specified in clause 1 of subsection 11 of this section;

2) the warehousekeeper has failed to eliminate the circumstances underlying the invalidation of the permit within the specified term.

(13) The requirements for tax warehouses and the procedure for the issue, suspension and invalidation of a permit for operating a tax warehouse, and the procedure for the storage and transport of the goods admitted to a tax warehouse are established by a regulation of the minister in charge of the policy sector.

§ 44². Securities

(1) To secure the performance of the tax liability which may arise, the tax authority has the right to require a security from the handler of alcohol, the handler of tobacco products and the handler of fuel in accordance with the procedure established in the Taxation Act.

(2) The seller of liquid fuel submits security to the tax authority in accordance with the procedure established in the Liquid Fuel Act.

§ 45. Taxation of supply based on contracts entered into before entry into force of this Act

(1) This Act also applies to the taxation of supply which is based on the contracts entered into before the entry into force of this Act where the actual supply has arisen during the period of validity of this Act.

(2) The supply is deemed to have arisen at the time specified in the Value Added Tax Act in force until the entry into force of this Act in the following cases:

1) where the supply is created in accordance with the Value Added Tax Act in force before the entry into force of this Act, but arising from this Act upon the entry into force of this Act or later;

2) where the supply is created in accordance with the Value Added Tax Act in force upon the entry into force of this Act or later but arising from this Act before the entry into force of this Act. In both cases, the taxable person performs any obligations relating to value added tax in accordance with the Value Added Tax Act in force until the entry into force of this Act.

§ 46. Implementation of Act

(1) Persons who have been registered as taxable persons based on the Value Added Tax Act in force until the entry into force of this Act and who have not been deleted from the register are deemed to be taxable persons as of the entry into force of this Act. As of the entry force of this Act taxable persons who have been registered as a single taxable person based on the Value Added Tax Act in force until the entry into force of this Act and the decision has not been revoked regarding their registration as a single taxable person, are deemed to be a single taxable person.

(2) A person specified in subsection 1 of this section is required to submit a value added tax return and pay value added tax for the tax period prior to the entry into force of this Act in accordance with the procedure prescribed in the Value Added Tax Act in force prior to the entry into force of this Act.

(4) A taxable person who has notified the tax authority in writing before 1 January 2004 of their wish to be taxed on the supply of their dwelling or on the supply of the service of renting out a dwelling and on the land tax and building insurance costs charged by them as the landlord of the dwelling from the recipient of the service, may continue to tax the specified supply until 1 May 2014.

(5) The period for the recalculation of input value added tax (§ 32) on immovable property which a taxable person has been using for business for less than five calendar years upon the entry into force of this Act is extended to ten calendar years as of the commencement of use of immovable property for business. The number of calendar years as of the commencement of use of immovable property for business until the entry into force of this Act is multiplied by two upon calculation of the recalculation period.

(6) The right to apply an exemption from value added tax or the zero per cent value added tax rate granted by the tax authority in accordance with § 31 of the Value Added Tax Act in force until the entry into force of this Act is valid even where the transaction or action to which the decision of the tax authority pertains is performed after the entry into force of this Act. Value added tax paid on goods or services until the entry into force of this Act is refunded under the conditions and in accordance with the procedure established based on § 31 of the Value Added Tax Act in force until the entry into force of this Act.

(7) The provisions of the Value Added Tax Act in force until the entry into force of this Act apply to the transfer of goods in accordance with a capital lease contract entered into prior to the entry into force of this Act on the condition that the goods have been transferred into the possession of the contractual user of the goods prior to the entry into force of this Act.

(10) The provisions of the Value Added Tax Act in force until the entry into force of this Act apply to Community goods or goods in free circulation in the Czech Republic, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia or the Slovak Republic (hereinafter acceding countries) which are transported to Estonia and on the export of which customs formalities have been completed in the Community or an acceding country prior to the entry into force of this Act until value added tax is paid on the import of goods.

(11) Where a person does not have the right to deduct input value added tax and cannot apply for a refund of value added tax based on subsection 1 of § 35 of this Act, value added tax paid upon the import of goods covered by the temporary importation procedure with total relief from import duties is refunded to the person as of the entry into force of this Act, on the condition that the person proves that earlier export of the goods from a Member State of the Community or an acceding country has not given rise to the application of the zero per cent value added tax rate, an exemption from value added tax or a refund of value added tax.

(12) Where goods which are undergoing the outward processing procedure in the Community or an acceding country upon the entry into force of this Act are transported into Estonia under customs supervision, the provisions of the Value Added Tax Act in force until the entry into force of this Act apply to the goods until value added tax is paid on the import of goods.

(13) Where the Estonian goods which had been transported to a Member State of the Community or an acceding country for purposes which comply with the purposes of implementing the temporary importation procedure with total relief from import duties prior to the entry into force of this Act are transported into Estonia under customs supervision, the provisions of the Value Added Tax Act in force until the entry into force of this Act apply to the goods until the goods are imported.

(14) Where goods which were undergoing the processing procedure under customs control in Estonia on 1 January 2009 are placed under the customs procedure of release for free circulation, the provisions of this Act in force on 31 December 2008 apply to the import of goods.

(15) Decisions concerning the registration as a single taxable person and made before 31 December 2009 are revoked as of 1 January 2010.

(16) Until 31 December 2011 the transfer of goods to a third county natural person for the transport to a third country in a baggage with which the person is travelling is deemed to be the export of goods where the sales price of the goods transferred to the person by the same taxable person at the same point of sale on the same date, with value added tax, exceeds 38.35 euros and the conditions provided in clauses 1, 3 and 4 of subsection 2 of § 5 of this Act are met.

(17) As an exemption to clause 5 of subsection 1 of § 35 of this Act a taxable person of another Member State has the right to submit an application for return of the value added tax paid in Estonia upon import or acquisition of goods or services received for use for business purposes in their country of residence in 2009 at the latest by 31 March 2011..

(17¹) The tax authority may, on the basis of a reasoned request from a taxable person grant permission not to submit the annex to the value added tax return or part thereof until 20 June 2015. The permission is granted in the case where the administrative burden of the taxable person for carrying out information technology developments would become unreasonably high upon the entry into force of the obligation provided in subsection 1² of § 27 of this Act on 1 November 2015. The application must be submitted to the tax authority by 31 August 2014. The tax authority makes a decision on the granting of the permission within 30 calendar days as of the receipt of the application.

(17²) The extension of the term for fulfilment of the claim for refund submitted until 31 July 2014 is subject to the procedure for extension of the term for fulfilment of the claim for refund that was in force until 31 July 2014.

(18) A taxable person or a third country person engaged in business that wishes to implement special arrangements for imposing value added tax on electronic communications services or electronically supplied services as of 1 January 2015 may submit a request for that purpose on the web page of the tax authority through the electronic portal as of 1 October 2014.

(19) The tax authority assigns a registration number to a third country person engaged in business and notifies the person thereof electronically within five working days as of the receipt of the application specified in subsection 18 of this section.

(20) The annex to the value added tax return specified in subsection 1 of § 27 of this Act must be submitted for the first time by 20 December 2014.

(21) Until 20 January 2016 a taxable person has the right to record the amounts of the invoices in the annex to the value added tax return by transaction partners in accordance with the procedure established by a regulation of the minister in charge of the policy sector.

(22) The regulation on taxation of vouchers provided in subsection 13 of § 2, subsection 1¹ of § 4, subsection 2¹ of § 11 and subsection 1¹ of § 12 of this Act is applied only to vouchers issued as of 1 January 2019.

(23) The value added tax paid in Estonia on goods acquired or services received or goods imported in order to respond to the COVID-19 pandemic in 2021 upon the performance of the tasks assigned to it by the European Commission or an agency or body established under the Union law is refunded, except where the specified goods are acquired or imported for resale for consideration or the service is received for resale for consideration. The value added tax is refunded in accordance with the procedure and under the requirements established based on subsection 3 of § 39 of this Act on the basis of a request approved by the minister in charge of the policy sector or an official authorized by the minister. Where the requirements for refunding the value added tax have ceased to exist, the value added tax is subject to payment on such goods or services. The principles provided in subsection 8 of § 15 and subsection 1² of § 39 of this Act are applied upon the payment of the value added tax.

(24) A taxable person who, upon calculating the value added tax, complies with special arrangements provided in § 44 of this Act, may, until 30 June 2025, pay value added tax at a rate of 20 per cent on the supply of the goods or services subject to the value added tax rate provided in subsection 1 of § 15, which were provided after 31 December 2023, in case an invoice was issued to the purchaser and the goods were dispatched or made available or the service was provided before 1 January 2024.

(25) Until 30 June 2025 a taxable person is entitled to, based on a written contract concluded before 1 May 2023, apply the rate of the value added tax provided in subsection 1 of § 15 of this Act in force until 31 December 2023 to the supply of taxable goods or provision of services, where that relevant contract provides that the price of the goods or services includes the value added tax or the price is added the value added tax at a rate of 20 per cent and the contract does not provide for a change in price resulting from the change of the rate of the value added tax.

(26) A taxable person who, upon calculating the value added tax is based on special arrangements provided in § 44 of this Act, may pay value added tax until 31 December 2026 at the rate of 9 per cent on the supply of accommodation or accommodation with breakfast provided after 31 December 2024, except the supply of goods or services accompanying that supply, where an invoice was issued to the recipient of the service and the service was provided before 1 January 2025.

(27) A taxable person who, upon calculating the value added tax, is based on special arrangements provided in § 44 of this Act, may pay value added tax until 31 December 2026 at the rate of 5 per cent on the supply of a press publication, both on a physical medium and also on the supply of an electronic press publication provided after 31 December 2024, except those that mainly publish advertising or private advertisements or the supply of a publication with mainly erotic or pornographic content or with video or music content, in case an invoice was issued to the purchaser and the goods were sent or made available or the service was provided before 1 January 2025.

(28) The Ministry of Finance analyses, at the latest in 2027, the effects accompanying the amendment of subsection 1 of § 15 of this Act, which entered into force on 1 January 2024, and in 2028, the effects accompanying the repeal of clause 4 of subsection 2 and subsection 2¹ of § 15 and the establishment of subsection 1¹ and clause 5 of subsection 2 of § 15 of this Act and where necessary, submits a proposal to the Government of the Republic to change the regulation.

§ 47

–

§ 49

[Omitted from this text]

§ 50. Entry into force of Act

(1) This Act enters into force as of Estonia’s accession to the European Union.

(2) Section 48 of this Act enters into force on 1 January 2004.

(5) Subsection 10 of § 40 of this Act is valid until 31 December 2007.

(6) Subsection 17 of § 46 of this Act is applied retroactively as of 1 October 2010.