Special VAT provisions

Specific provisions concerning taxation in the meaning of Value-Added Tax Act are value added tax incentives applicable to diplomats, foreign missions, international organisations, EU institutions and armed forces of foreign states; special arrangements for taxation of travel services; special arrangements for imposing tax on immovables, scrap metal, precious metal and metal products; special value added tax accounting arrangements for second-hand goods, and special regulations for tax warehousing.

Value added tax incentives applicable to diplomats, foreign missions, international organisations, EU institutions and armed forces of foreign states

Legislation

  1. Clauses 15 (3) 5) and 51); 6) and 61); 13); (4) 14) and 141); subsection 15 (51); clause 3 (6) 3); and section 39 of the Value Added Tax Act 
  2. Government of the Republic Regulation No 109 of 16 April 2004 „Procedure for and conditions of exemption from value added tax of goods imported to meet the needs of a foreign mission, diplomat, EU institution and the armed forces of NATO Member States and other foreign states, an international military headquarters and international military educational institution, and procedure for and conditions of the refund of value added tax” (RT I 2004, 27, 185)
  3. Government of the Republic Regulation No 214 of 11 June 2004 (RT I 2004, 49, 346)
  4. Minister of Finance Regulation No 20 of 2 May 2016 „Application form for the refund of value added tax paid on the goods acquired in Estonia” (RT I 2016, 8)
  5.  Article 51 of Council Implementing Regulation (EU) No 282/2011 of 15 March 2011 sets out the VAT and / or excise duty exemption certificate


General information

Subsections 39 (1) and (2) of the Value Added Tax Act set out the list of persons to whom value added tax shall not apply on the import of goods which are necessary for them, and upon acquisition of such goods or services in Estonia, value added tax paid on such goods or services shall be refunded.

Subsection § 39 (1):

  • foreign diplomatic representatives and consular agents (except honorary consuls) accredited to Estonia
  • special missions and representatives, representations or headquarters of international organisations recognised by the Ministry of Foreign Affairs
  • diplomatic representations and consular posts of foreign states
  • special missions
  • European Union institutions
  • members of the administrative staff of such representations, posts or special missions, except for the administrative staff of Union institutions

Subsection § 39 (2):

  • armed forces of NATO Member States (except Estonia) and the civilian staff accompanying them and their members when such forces are taking part in the common defence effort

    If tax incentives are provided for in an international agreement ratified by the Riigikogu they apply to:

  • international military headquarters

  • members of the international military headquarters and their dependents, and the employees of the contractual partners of the international military headquarters and their dependents

  • armed forces of the foreign states which are not NATO Member States and their civilian staff, the members thereof and their dependents

  • international military educational institutions

Respective tax incentives are regulated according to the procedure established by a regulation of the Government of the Republic.

According to clause 3 (6) 3) of the Value Added Tax Act the persons specified in subsections 39 (1) and (2) shall not be obliged to pay VAT in Estonia when they acquire a new means of transport from another Member State.

Value added tax shall not be imposed on the import of goods for official use to foreign missions and consular posts, and for personal use to foreign diplomatic representatives accredited to Estonia, consular agents (except honorary consuls) and the administrative staff of foreign missions. The import of goods for which value added tax exemption is applied must be declared separately on forms for diplomatic goods. The right to apply for value added tax exemption shall be approved by the Minister of Foreign Affairs with a note in box 7 of the above mentioned form.

Members of the administrative staff have the right to apply for value added tax exemption on the import of goods for personal use only in the settlement period within the first three months of residing in Estonia. Customs formalities of goods shall be carried through according to the procedure laid down in the customs rules.

Foreign missions have the right for a refund of the value added tax paid here when acquiring goods and services in Estonia. Upon acquisition of such goods or services in Estonia, the value added tax paid on such goods or services shall be refunded on the conditions set out in subsection 39 (1) of the Value Added Tax Act, taking into consideration the exceptions provided for in subsection 39 (4) of this act. The exceptions named in subsection 39 (4) are provided for in the Government of the Republic Regulation No 214 of 11 June 2004. In order to receive a refund, the total value of the goods and services, inclusive of value added tax, has to be at least 64 euros according to the invoice. Value added tax is also refunded on the occasion of smaller amounts in the case of utilities, communication services and liquid fuel within the meaning of the Liquid Fuel Act.  

Value added tax paid upon acquisition of used goods is not refunded. Likewise, the value added tax paid upon acquisition of foodstuff is not refunded.   

In order to receive a refund the foreign mission has to submit a respective application to the Ministry of Foreign Affairs on each month by the tenth day of the following month, attaching invoices or their copies pursuant to the requirements set out in section 37 of the Value Added Tax Act, which are confirmed by the persons that issued the invoices.

The application form (140.07 KB, PDF) is established by Minister of Finance Regulation No 20 of 2 May 2016 (PDF) (RT I, 05.05.2016, 8).

The right of the applicant to request for value added tax refund is approved by the Minister of Foreign Affairs or an official authorised by the Minister with his/her signature and seal on the application. The Ministry of Foreign Affairs submits the application with the accompanying documents to the tax authority by the 20th day of the month in which the documents are received or of the following month (in the case the documents are received after the 10th day).

Value added tax refund can be requested in the course of up to 90 days as of the day of acquisition of goods or provision of services. 

The tax authority makes a decision in respect of the application and transfers the refundable amount into the bank account specified in the application within 30 days of receipt of the application and the attached invoices from the Ministry. Invoices marked by the tax authority and the copy of the application are returned to the Ministry of Foreign Affairs.  

According to clause 15 (3) 5) of the Value Added Tax Act goods sold to another Member State to diplomatic representations or consular posts, including the representations of Estonia in other Member States, are subject to the 0 per cent value added tax rate.   

Services provided to the above listed persons are also charged with 0 per cent rate (clause 15 (4) 14) of the Value Added Tax Act).

As a document certifying the right to apply 0 per cent rate of value added tax foreign missions submit the VAT and excise duty exemption certificate (subsection 15 (51) of the Value Added Tax Act) to the transferor of the goods or the provider of the services according to Council Implementing Regulation (EU) No 282/2011, and one copy of this certificate must remain to the transferor of the goods/provider of the services.

Upon the sale of goods to foreign missions located in a non-Community state the export rules have to be taken into account.

In addition to foreign missions and representatives, the value added tax exemption is also extended to various representations and representatives of international organisations and special missions:

EU institutions are, for example, Representation of the European Commission in Estonia, Information Office of the European Parliament in Estonia, European Agency for the operational management of large-scale IT systems in the area of freedom, security and justice (EU-LISA))

EU institution is an institution to which the Protocol on the Privileges and Immunities of the European Communities applies.

According to section 39 of the Value Added Tax Act, value added tax shall not be imposed on the import of goods which are necessary for official use of the Union institutions. The exemption does not apply to members of the administrative staff.  

Goods transferred and services provided to the said institutions in Estonia are liable to value added tax until 1 January 2017.  

EU institutions located in Estonia can request for refund of the value added tax paid here when acquiring goods and services for official use.  

The requirement of at least 64 EUR per invoice of the cost of goods/services applies to the institutions, except in regard to utilities, communication services and fuel; the value added tax paid on the acquisition of foodstuff is refundable as well.

EU institutions send annually requests for reimbursement (usually in the form of letter) and copies of the invoices to the Ministry of Foreign Affairs. The refund is paid within six months of the receipt of request.

From 1 January 2017 the rate of value added tax on the goods transferred and services provided to Union institutions located in Estonia shall be 0 per cent (clause 15 (3) 51 and clause (4) 142) of the Value Added Tax Act). The document in proof of the supply covered by 0 per cent value added tax rate is the value added tax exemption certificate approved by the representative of an institution and the Ministry of Foreign Affairs. The 0 per cent rate of value added tax applies to the Union institutions located in Estonia, provided that the total value of such goods or services, exclusive of VAT, is at least 53 euros according to the invoice. The total value of the invoice may be smaller in the case of public utility services, telecommunications services and fuel.

Pursuant to the Agreement Implementing the Protocol on the Privileges and Immunities of the European Communities in the Republic of Estonia the rate of 0 per cent shall be imposed on all intra-Community services to be provided to such institutions in Estonia.  

European Commission considers each service producing a supply in other country than the country of origin of the EU institution to which the service is provided as an intra-Community service. It means that all services provided in Estonia to a community institution in another Member State are covered by the definition of intra-Community services, and direct exemption, i.e. the rate of 0 per cent shall be applied to them.

On goods and services that are sold from Estonia to community institutions located in other Member States the 0 per cent rate of value added tax shall be imposed according to clause 15 (3) 5) (goods) and clause (4) 14) (services) of the Value Added Tax Act.

As a document certifying the right to apply the 0 per cent rate of value added tax institutions submit the VAT and excise duty exemption certificate to the transferor of the goods or provider of the services according to Council Implementing Regulation (EU) No 282/2011, and one copy of this certificate is to be kept by the transferor of the goods/provider of the services.

NATO Member State

In accordance with clause 15 (3) 6) of the Value Added Tax Act the rate of value added tax is 0 per cent of the taxable value on goods transferred and transported to another Member State which is also a Member State of NATO, intended for the official use of the armed forces or the civilian staff accompanying them, when such forces are taking part in the common defence effort.

Likewise, the 0 per cent value added tax rate applies to services provided to armed forces located in a foreign state (clause 15 (4) 14) of the Value Added Tax Act).

The rate of 0 per cent also applies to goods (clause 15 (3) p 61 of the Value Added Tax Act) transferred and services (clause 15 (4) 141) of the Value Added Tax Act) provided to the armed forces of NATO Member States (except Estonia) located in Estonia and intended either for the official use of the armed forces or civilian staff accompanying them, when such forces are taking part in the common defence effort. 

As a document certifying the right to apply the 0 per cent rate of value added tax the armed forces of NATO submit the VAT and excise duty exemption certificate to the transferor of the goods or provider of the services according to Council Implementing Regulation (EU) No 282/2011 whereof one copy is to be kept by the transferor of the goods/provider of the services.

According to subsection 39 (2) of the Value Added Tax Act value added tax is not imposed on the import of goods to the armed forces of NATO Member States (except Estonia) and civilian staff accompanying them or to their members when such forces are taking part in the common defence effort.

Armed forces of other (except NATO) foreign states

The tax incentives apply in Estonia to the armed forces and civilian staff of other foreign states, the members thereof and their dependents if so provided for in an international agreement ratified by the Riigikogu.

The right of the armed forces and accompanying civilian staff, the members thereof and their dependents to apply for exemption from or a refund of value added tax shall be approved by the Minister of Defence or an official authorised by the Minister.

International military headquarters

Value added tax shall not be imposed on the import of goods to international military headquarters if tax incentives are provided for in an international agreement ratified by the Riigikogu. Exemption from value added tax on the import of goods or a refund of value added tax on the acquisition of goods or services from Estonia apply to the members of international military headquarters, their dependents and the members of contractual partners of the headquarters and their dependents if tax incentives are provided for in an international agreement ratified by the Riigikogu. Upon acquisition of goods and services, the value added tax paid on such goods and services in Estonia shall be refunded to the members of international military headquarters and their dependents if the total value of the goods and services is at least 64 euros.

Likewise, the 0 per cent value added tax rate is imposed on the sale of goods and services to the headquarters, if such tax incentive is provided for in an international agreement ratified by the Riigikogu.

Such international agreements are primarily

A document certifying the right to apply the 0 per cent value added tax rate is the VAT exemption certificate approved by the representative of the armed forces of NATO or the military headquarters and the Ministry of Defence the format of which is established by the Council Implementing Regulation (EU) No 282/2011 (Annex II).

The right of the headquarters and their contractual partners and the dependents thereof to apply for exemption from or a refund of value added tax shall be approved by the Minister of Defence or an official authorised by the Minister.

The right of the members of the headquarters and their dependents to apply for exemption from or a refund of value added tax shall be approved by the Minister of Defence or an official authorised by the Minister.   

International military educational institution

Subsection 39 (2) of the Value Added Tax Act also includes tax incentives for international military educational institutions. In Estonia there is one such educational institution at present – Baltic Defence College. Pursuant to Article 8 of the Ratification Law of the Protocol between the Government of the Republic of Estonia, the Government of the Republic of Latvia and the Government of the Republic of Lithuania concerning the status of the Baltic Defence College and its personnel”, passed by the Riigikogu on 13 October 1999, the College is exempted from import duties on goods imported by the College for its official use. The College is reimbursed for the amount of value added tax or excise duties paid on the goods and services purchased for official use to the extent possible within national legislation of the Parties. The tax incentives named in the Agreement are applied to the College pursuant to subsections 39 (2) and (3) of the Value- Added Tax Act, according to which tax incentives are, inter alia, stipulated for international military educational institutions if such tax incentives are provided for in an international agreement ratified by the Riigikogu. Pursuant to the Ratification Law passed by the Riigikogu the College is reimbursed for the amount of value added tax paid on the purchases to the extent possible within national legislation of the Parties. Since the specific extent of tax incentives granted for a military educational institution is not stipulated by the national legislation, the College is reimbursed for the amount of value added tax and excise duty paid on the goods and services purchased for official use.

The document in proof of the transfer of goods or provision of  services with the 0 per cent value added tax rate is the value added tax exemption certificate (subsection 15 (51) of the Value-Added Tax Act; hereinafter the Certificate) established by Council Implementing Regulation (EU) No 282/2011.

The certificate forms in English and in Estonian

With the Certificate a body/individual eligible for the exemption confirms the authenticity of the data and provides the information in box 3 necessary for the evaluation of the request for exemption in the host Member State, i.e. the state to which the goods are delivered or where the body/individual that has purchased the service is established.

It is important for the Seller to check the information provided in box 6 of the Certificate, where it is specified whether all the goods/services acquired meet the requirements of tax exemption in this state. In the case of a partial tax exemption the seller applies the 0 rate within the extent specified in box 6. To the rest of the goods/services the standard rate is applied.

One copy of the Certificate is kept by the seller who is obligated to retain it as part of the accounting records according to the Estonian legislation.

To simplify the procedure, the competent authority of a host Member State can dispense with the obligation on the eligible body (the purchaser indicated in box 1) to ask for the stamp in the case of exemption for official use. The purchaser mentions this dispensation in box 7 with reference to the relevant document according to which the stamp is not mandatory.

The form of the application for the refund of value added tax is established by Regulation of the Minister of Finance No 20 of 2 May 2016. The application for the refund of value added tax shall be submitted respectively to the Ministry of Foreign Affairs or the Ministry of Defence by the 10th day of the month together with the invoices confirmed by the issuer or their copies as provided for in section 37 of the Value-Added Tax Act. 

The refund of value added tax may be claimed in the course of up to 90 calendar days as of the day on which the goods are acquired or services are provided.   

The application with the documents shall be submitted to the tax authority by the 20th day of the month of the receipt of the documents or the following month (if the documents were received after the 10th date).  

The tax authority makes a decision in respect of the application and value added tax to be refunded shall be transferred into the bank account specified in the application within 30 days of receipt of the application and added invoices from the Ministry.

The Tax authority returns the marked invoices together with the copy of the application to the Ministry of Foreign Affairs or the Ministry of Defence.

Special arrangements for cash accounting for VAT

The special arrangement for cash accounting for value-added tax (hereinafter – the special arrangement) is set out in Art. 44 of the Value-Added Tax Act.

For purposes of application of the special arrangement, the time of supply is the day on which the transaction set out in Art. 11 (1) 2) or 3)  of the Value-Added Tax Act takes place, i.e. the supply takes place at the time when full or partial payment is received for the goods or services, or in the case of self-supply, the transfer of goods or provision of services.

If, for reasons independent of the taxable person that uses special arrangement, goods transferred or services provided are not paid for within the two calendar months following the date on which the goods were dispatched or made available or the services were provided, the first day of the third calendar month following the date on which the goods were dispatched or made available or the services were provided shall be the time of supply (Art. 44 (5) of the Value-Added Tax Act also applies where the taxation period of the taxable person is one quarter).

Example 1

Where the goods transferred in January are not paid for in February and in March, the time of supply is 1 April, and the supply shall be declared in April’s KMD form by 20 May (where the taxation period is one quarter – in KMD form for the II quarter by 20 July).

In case of free transfer of goods, the time of supply is the day, when the goods are transferred or made available to the recipient.

Where no payment is received for transferred goods or provided services, and the taxable person that applies the special arrangement is removed from the register of persons liable to value-added tax, the supply is considered to take place during the taxation period, when the last KMD form was to be filed.

Example 2

A taxable person submits an application for its removal from the register of persons liable to value-added tax since 1 April. Where the goods transferred in January are not still paid for in March, the supply is considered to take place in March and the supply shall be declared in KMD form by 20 April.
 

The right to deduct input value-added tax is created with regard to goods purchased or services paid for in connection with taxable supply related to business, i.e. where goods are purchased or services received are not paid for, there is no right to deduct input value-added tax. In case of partial payment for goods purchased or services received it is possible to deduct input value-added tax for the part paid for.

Example 3

The goods are purchased in connection with taxable supply related to business on 30 April, and the payment is made on 6 May. In such a case there is the right to deduct the input value-added tax in May KMD form.

In case of partial payment for goods purchased or services received, there is the right to deduct the input value-added tax for the part paid for.

Discontinuing implementation of the special arrangement can be voluntary or compulsory.

The taxable person shall in writing inform the tax authority about voluntary discontinuing implementation of the special arrangement (where the taxable income of the taxable person does not exceed 200,000 euros since the beginning of the year) no later than during the taxation period prior to the discontinuing.

Example 4

A taxable person wishes to discontinue implementation of the cash accounting for value-added tax since 1 June. The notification shall be filed no later than in May.

A taxable person is required to discontinue implementation of the special arrangement if the supply of the taxable person exceeds 200,000 euros as of the beginning of the calendar year. The special arrangement shall not be implemented as of the first date of the calendar month following generation of the supply. Upon keeping record of the threshold of the taxable supply the transfer of fixed assets and the incidental transfer of immovable as goods shall not be taken into account.

The taxable person shall in writing inform the tax authority about compulsory discontinuing implementation of the special arrangement no later than during the first taxation period since which implementation of the special arrangement is discontinued.

Example 5

A taxable person applying the special arrangement reaches the threshold of the taxable supply in April. In such a case the taxable person shall submit the notification to the tax authority no later than in May.

When going from application of the general arrangement to the special arrangement or vice versa when determining the time of supply and deduction of input value-added tax it is necessary to take into account the rules that were in force at the time of transfer of goods and making the goods available, at the time of provision of the service, or at the time of receiving the goods or services purchased for business purposes.

Example 6

A taxable person discontinues implementation of the special arrangement since 1 May. Where partial payment for the goods transferred in April takes place in June, the taxable person declares the payment made in connection with transfer of the goods in KMD form by 20 July and the unpaid portion in KMD form by 20 August (Art. 44 (5) of the Value-Added Tax Act applies), regardless of the fact that since 1 May the taxable person implements the general arrangement of VAT accounting.

Example 7

A taxable person notifies that it shall implement the cash accounting for value-added tax since 1 May. The services provided in April (not yet paid for) the taxable person declares in April KMD form according to the general arrangement.

Special arrangement shall not be implemented in case of the following transactions and acts (Art. 44 (11) of the Value-Added Tax Act):

  • import of goods;

  • intra-Community supply and acquisition;

  • provision to a taxable person or to a taxable person with limited liability of another Member State of such service specified in Art. 10 (4) 9) of the Value-Added Tax Act the place of supply of which is not Estonia;

  • receipt from a foreign person engaged in business of such service the place of supply of which is not Estonia;

  • the supply, acquisition of goods and receipt of service is the payment for goods or service is carried out according to the contract, such as during a period following the dispatch of goods or provision service on the basis of the contract of lease which is longer than three calendar months (for instance, long-term lease contracts, rental contracts, instalment sale).

The taxable person that implements the special arrangement shall file KMD and KMD INF forms.

KMD and KMD INF forms are filed by the 20th day of each month either online or on paper. If you are a taxable person for at least 12 month or if KMD INF form has to reflect more than five invoices, you shall file KMD and KMD INF forms online.

Where the taxation period is, for example, one quarter, KMD and KMD INF forms are filed quarterly (i.e. by the 20th day of the month following the quarter).

According to Art. 27 (12) of the Value-Added Tax Act, KMD INF form shall reflect the information on invoices issued to and received from legal persons, sole proprietors as well as state, rural municipality and city authorities, where the person transferring the goods or providing the service marked the supply taxable with 20% and 9% VAT rates, except for information on invoices issued on the basis of the special arrangement set out in Art. 40 of the Value-Added Tax Act, where the sum (without VAT) of the invoice (or the total sum of invoices) per partner issued during the taxation period is less than 1,000 euros.

Where during the taxation period a taxable person does not issue or receive invoices that have to be declared in KMD INF form, a respective mark on the absence of invoices to be declared has to be made in part A and/or B of the form.

Learn more: Filing tax returns and reports

A part of KMD INF form reflects information on issued invoices.

A taxable person that implements the special arrangement shall reflect invoices in KMD INF form for the taxation period, when the invoice was issued and for the subsequent taxation periods until all the supply reflected in the invoice is declared in KMD form not later than within three months after transfer of goods and making the goods available, or provision of the service.

Invoices declared according to the general arrangement (where the payment for goods or service is carried out according to the contract, such as during a period following the dispatch of goods or provision service on the basis of the contract of lease which is longer than three calendar months, for instance, long-term lease contracts, rental contracts, instalment sale) shall only be reflected in KMD INF form for the taxation period when they also are to be declared in KMD form.
 

Examples of filling in A part of the KMD INF form

Example 8

On 15 June 2021 the invoice for 1,200 euros (with VAT) was issued for the services provided in June. The invoice was paid in June.

The information for the invoice is reflected in KMD INF form for June as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total without value-added tax

Tax rate

Taxable value of goods or services stated on the invoice*

Taxable supply presented in fields 1 and 2 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

10

1

12345678

OÜ Kass

15

15.06.2021

1,000.00

20%

1,000.00

1,000.00


Since the services are paid for during the same taxation period, the service provided shall be declared in June KMD form.

Example 9

On 10 March 2021 the invoice for the services for 1,200 euros (with VAT) was issued. The invoice was paid in July.

The information for the invoice is reflected in KMD INF form for March, April and May as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total without value-added tax

Tax rate

Taxable value of goods or services stated on the invoice*

Taxable supply presented in fields 1 and 2 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

10

1

12345678

OÜ Kass

13

10.03.2021

1,000.00

20%

1,000.00

0.00


The information for the June invoice is reflected in KMD INF form as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total without value-added tax

Tax rate

Taxable value of goods or services stated on the invoice*

Taxable supply presented in fields 1 and 2 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

10

1

12345678

OÜ Kass

13

10.03.2021

1,000.00

20%

1,000.00

1,000.00


According to the time of supply, the indicated invoice is to be declared in the KMD form submitted for June. The invoice is no longer reflected in KMD and KMD INF forms for the month of transfer of payment (July).

Example 10

On 10 January 2021 the invoice for transferred goods was issued for 2,000 euros (without VAT). It was not paid in February or March. The taxation period of the taxable person is one quarter.

The information for the invoice is reflected in KMD INF form for the I quarter (submission deadline is 20 April) as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total without value-added tax

Tax rate

Taxable value of goods or services stated on the invoice*

Taxable supply presented in fields 1 and 2 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

10

1

12345678

OÜ Kass

11

10.01.2021

2,000.00

9%

2,000.00

0.00


The information for the invoice is reflected in KMD INF form for the II quarter (submission deadline is 20 July) as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total without value-added tax

Tax rate

Taxable value of goods or services stated on the invoice*

Taxable supply presented in fields 1 and 2 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

10

1

12345678

OÜ Kass

11

10.01.2021

2,000.00

9%

2,000.00

2,000.00


Example 11

On 7 August 2021 the invoice for 6,000 euros (including 1,000 euros of VAT) was issued. On 25 August 2021 600 euros (including 100 euros of VAT) were paid under this invoice. The service was provided in September, while the final settlement was not performed until November.

The information for the invoice is reflected in KMD INF form for August as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total without value-added tax

Tax rate

Taxable value of goods or services stated on the invoice*

Taxable supply presented in fields 1 and 2 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

10

1

12345678

OÜ Kass

17

07.08.2021

5,000.00

20%

5,000.00

500.00


The information for the invoice is reflected in KMD INF form for September, October and November as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total without value-added tax

Tax rate

Taxable value of goods or services stated on the invoice*

Taxable supply presented in fields 1 and 2 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

10

1

12345678

OÜ Kass

17

07.08.2021

5,000.00

20%

5,000.00

0.00


The information for the invoice is reflected in KMD INF form for December as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total without value-added tax

Tax rate

Taxable value of goods or services stated on the invoice*

Taxable supply presented in fields 1 and 2 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

10

1

12345678

OÜ Kass

17

07.08.2021

5,000.00

20%

5,000.00

4,500.00


According to the time of supply, this invoice shall be declared in KMD forms for August (500 euros) and December (4,500 euros).

Example 12 (transition from application of the special arrangement to the general arrangement)

The taxable person discontinues implementation of the special arrangement since 1 July. On 13 June 2021 the invoice for 6,000 euros (including 1,000 euros of VAT) is issued. Partial payment for the goods transferred in June was received in July (1,500 euros, including 250 euros of VAT) and the final payment was received in September (4,500 euros, including 750 euros of VAT).

The information for the invoice is reflected in KMD INF form for June as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total without value-added tax

Tax rate

Taxable value of goods or services stated on the invoice*

Taxable supply presented in fields 1 and 2 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

10

1

12349876

OÜ Sipelgas

33

13.06.2021

5,000.00

20%

5,000.00

0.00


The information for the invoice is reflected in KMD INF form for July as follows:  

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total without value-added tax

Tax rate

Taxable value of goods or services stated on the invoice*

Taxable supply presented in fields 1 and 2 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

10

1

12349876

OÜ Sipelgas

33

13.06.2021

5,000.00

20%

1,250.00


The information for the invoice is reflected in KMD INF form for September as follows:  

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total without value-added tax

Tax rate

Taxable value of goods or services stated on the invoice*

Taxable supply presented in fields 1 and 2 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

10

1

12349876

OÜ Sipelgas

33

13.06.2021

5,000.00

20%

3,750.00


According to the time of supply, this invoice shall be declared in KMD forms for July (1,250 euros) and September (3,750 euros). Invoices are not reflected in KMD INF form filed in August.

B part of KMD INF form reflects the information on invoices received from taxable persons registered in Estonia. Information on invoices is reflected, if VAT set out in invoices is to be partially or fully deducted in section 5 of KMD form.

A taxable person that implements the special arrangement shall reflect in KMD INF A form the information on invoices fully or partially paid during the respective taxation period. Information on unpaid invoices is reflected in B part of KMD INF form for the taxation period, when the goods are transferred and made available, or the service provided. Information on unpaid or partially paid invoices is reflected in B part of KMD INF form for subsequent taxation periods until full payment of the invoice in question.

Thus, in case of implementation of the special arrangement declared invoices are reflected in B part of KMD INF form for the taxation period, when the invoice for received goods or services was received and for subsequent taxation periods until full payment of the invoice in question (i.e. until deduction of input VAT in section 5 of KMD form).

Invoices declared according to the general arrangement (where the payment for goods or service is carried out according to the contract, such as during a period following the dispatch of goods or provision service on the basis of the contract of lease which is longer than three calendar months, for instance, long-term lease contracts, rental contracts, instalment sale) are reflected in B part of KMD INF form only for taxation periods, when the input VAT indicated on the invoice is to be deducted in section 5 of KMD form.
 

Examples of filling in B part of the KMD INF form

Example 13

On 3 January 2021 the invoice for services received in January for the sum of 4,800 euros (including 800 euros of VAT) was issued. It was paid in May.

The information for the invoice is reflected in KMD INF form for January, February, March and April as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total with value-added tax

Value-added tax amount stated on the invoice*

Input value-added tax amount presented in field 5 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

1

12344321

OÜ Koer

12

03.01.2021

4,800.00

800.00

0.00


The information for the invoice is reflected in KMD INF form for May as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total with value-added tax

Value-added tax amount stated on the invoice*

Input value-added tax amount presented in field 5 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

1

12344321

OÜ Koer

12

03.01.2021

4,800.00

800.00

800.00


The right of deducting input VAT is created for May KMD form.

Example 14

Partial advance payment for purposes of taxable supply in connection with purchase of goods for business was made in March (invoice issued on 5 March 2021 for the sum of 1,200 euros (including 200 euros of VAT), 300 euros of it paid in March). The goods were received in April. The final settlement (900 euros) was performed in August.

The information for the invoice is reflected in KMD INF form for March as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total with value-added tax

Value-added tax amount stated on the invoice*

Input value-added tax amount presented in field 5 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

1

12344321

OÜ Koer

11

05.03.2021

1,200.00

200.00

50.00


The information for the invoice is reflected in KMD INF form for April, May, June and July as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total with value-added tax

Value-added tax amount stated on the invoice*

Input value-added tax amount presented in field 5 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

1

12344321

OÜ Koer

11

05.03.2021

1,200.00

200.00

0.00


The information for the invoice is reflected in KMD INF form for August as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total with value-added tax

Value-added tax amount stated on the invoice*

Input value-added tax amount presented in field 5 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

1

12344321

OÜ Koer

11

05.03.2021

1,200.00

200.00

150.00


Example 15

Goods were purchased in June (invoice of 5 June 2021 for 1,200 euros with VAT), and where used for taxable (50%) and tax-free (45%) business-related supply as well as for purposes not related to business (5%). The goods were paid for in July.

The information for the invoice is reflected in KMD INF form for June as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total with value-added tax

Value -dded tax amount stated on the invoice*

Input value-added tax amount presented in field 5 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

1

12344321

OÜ Koer

13

05.06.2021

1,200.00

200.00

0.00

11


The information for the invoice is reflected in KMD INF form for July as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total with value-added tax

Value-added tax amount stated on the invoice*

Input value-added tax amount presented in field 5 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

1

12344321

OÜ Koer

13

05.06.2021

1,200.00

200.00

100.00

11


Example 16

The taxable person discontinues implementation of the special arrangement since 1 August. On 3 July 2021 the invoice for services received in July for the sum of 3,000 euros (including 500 euros of VAT) is issued. The invoice is paid in December.

The information for the invoice is reflected in KMD INF form for July as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total with value-added tax

Value-added tax amount stated on the invoice*

Input value-added tax amount presented in field 5 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

1

12344321

OÜ Koer

21

03.07.2021

3,000.00

500.00

0.00


The information for the invoice is reflected in KMD INF form for December as follows:

No

Register code or personal ID code of transaction partner

Name of transaction partner

Invoice number

Invoice date (dd.mm.yyyy)

Invoice total with value-added tax

Value-added tax amount stated on the invoice*

Input value-added tax amount presented in field 5 of Form KMD for the taxation period

Special code

1

2

3

4

5

6

7

8

9

1

12344321

OÜ Koer

21

03.07.2021

3,000.00

500.00


The right of deducting input VAT is created for December KMD form. The invoice is not reflected in KMD INF form filed for the period from August until November.

Last updated: 24.10.2021

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