Filing VAT returns and reports

Supply shall be deemed to have been created both in the case of intra-Community supply created or intra-Community acquisition effected on the fifteenth day of the month following the month in which the goods obtained by the intra-Community acquisition of goods are dispatched or made available or on the date on which an invoice is issued if it is prior to the mentioned fifteenth day (subsection 11 (2) of the Value-Added Tax Act).

Upon provision of services to foreign persons or receipt of services from foreign persons the time of supply is deemed to be the date on which the first of one of the following acts has been performed pursuant to the general rule of subsection 11 (1) of the Value-Added Tax Act:

• the services are provided;
• full or partial payment is received for the services or, in the case of the receipt of services, full or partial payment is made.

If a taxable person cancels an invoice concerning goods/services or submits a credit invoice, the corresponding amendments concerning the taxable period during which the (credit) invoice was submitted shall be indicated in the report on intra-Community supply (subsection 28 (3) of the Value-Added Tax Act). Thus, a taxable person shall declare the amendments concerning the same taxable period resulting from the cancellation of an invoice or from the submission of a credit invoice both in the value-added tax return (KMD) and in the report on intra-Community supply (VD).

The information about intra-Community supply of goods is provided for in § 7 of the Value-Added Tax Act. Intra-Community supply of goods means, as a rule, 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 the other Member State. The transfer of goods, transported from Estonia to another Member State as call-off stock, is also treated as intra-Community supply.

Besides the sale of goods, intra-Community supply of goods means also the transport of goods to another Member State for them to be used for business purposes there. A company, for example, may transport goods to its company or branch registered as a taxable person in Finland for them to be used for business there. Intra-Community transportation of goods from one Member State to another one for business purposes presumes that the transportation shall be considered as an intra-Community acquisition of goods in the other Member State – thus, an Estonian company has generally to register itself as a taxable person in this other Member State.

As the amendment, since 01.01.2020 the transport to another Member State of goods meeting the conditions of call-off stock is not treated as intra-Community supply. The transport to another Member State of call-off stock is not treated as intra-Community supply also in case when the initially agreed acquirer has replaced with another acquirer in the same Member State within 12 months as of the arrival of call-off stock and in case when the goods are not transferred in another Member State within 12 months as of their arrival and are returned to Estonia during the same time.

Intra-Community supply of goods (incl. the transfer of goods, transported from Estonia to another Member State as call-off stock) shall be declared in boxes 3, 3.1 and 3.1.1 of Form KMD and in column 3 of Form VD. Box 3.1.1 "Intra-Community supply of goods" in Form KMD of the corresponding calendar month equals generally to the total amount in column 3 "Taxable value of goods" of Form VD. A difference may occur on selling goods to persons not registered as taxable persons in the special cases given in the Value-Added Tax Act (for example, sale of new means of transport).

The place of supply of services is provided for in § 10 of the Value-Added Tax Act. In the report on Form VD such services shall be declared which upon provision to taxable persons of another Member State shall be subject to taxation according to the so-called basic rule (clause 10 (4) 9) of the Value-Added Tax Act) by the recipient in his or her Member State (clause 28 (1) 2) of the Value-Added Tax Act). Thus, the services that are connected with the so-called ‘seat’ and the place of providing services is not related to the recipient of the service (for example, the services connected with an immovable).

Besides, the services subject to taxation with 0 per cent value added tax rate by the recipient shall not be declared in VD reports, for example, transport services for the export or import of goods (the list of services subject to taxation with 0 per cent value added tax rate is provided for in subsection 15 (4) of the Value-Added Tax Act). 

The services to be declared in VD report shall be indicated in boxes 3 and 3.1 of Form KMD and in column 5 of Form VD. The taxable value of services in column 5 of Form VD equals, as a rule, to the difference between boxes 3.1 and 3.1.1 of Form KMD.

The remaining services subject to taxation with 0 per cent value added tax rate pursuant to the Value-Added Tax Act shall be declared in box 3 of Form KMD only where the total supply subject to taxation with the 0 per cent value added tax rate shall be declared.  Thus, all the services connected with the so-called ‘seat’ and the services subject to taxation with the 0 per cent value added tax rate under the specific provisions, for example, the services connected with an immovable, transport services for the export of goods, the provision of services for vessels navigating in international waters, and similar services shall be declared in row 3 of Form KMD only.

The goods treated as call-off stock shall not be declared in Form KMD. The goods transported to another Member State as call-off stock shall be declared in Form VD, indicating in the report the code of the country of the acquirer of call-of stock (column 1 in the paper form) and the VAT identification number of the acquirer of call-off stock (column 6 in the paper form).

If the transport of the goods to another Member State as call-off stock was failed to present on time in Form VD, it shall be presented in the report on the amendment of intra-Community supply (Form VDP), indicating in row "corrected" the code of the country of the acquirer of call-of stock (column 2 in the paper form), the VAT identification number of the acquirer of call-off stock (column 7 in the paper form) and code of the act "1" "Transport of the goods to another Member State" (column 8 in the paper form).

The replacement of the acquirer of call-off stock with another acquirer in the same Member State or return of call-off stock to Estonia shall be presented in Form VDP, indicating in row "corrected":

1. if the acquirer was replaced with another acquirer, the code of the country of the new acquirer (column 2 in the paper form) and the VAT identification number of the new acquirer (column 7 in the paper form); if call-off stock was returned to Estonia – the code of the country of the initially agreed acquirer (column 2 in the paper form) and the VAT identification number of the initially agreed acquirer (column 7 in the paper form);
2. code of act, correspondingly "2" – "return of the goods to Estonia" or "3" – "the replacement of the acquirer of call-off stock with another acquirer“ (column 8 in the paper form);
3. as "yes/no" answer, whether the act took place in full or not (it means whether the taxable person is about to transfer to the new acquirer or to return to Estonia the total amount of goods, transported to another Member State as call-off stock, or only part of it) (column 9 in the paper form).

In row "initially declared" on both cases shall be indicated the code of the country of the initially agreed acquirer of call-of stock (column 2 in the paper form), the VAT identification number of the initially agreed acquirer of call-off stock (column 7 in the paper form) and code of act (column 8 in the paper form).