Taxation of goods

Here we give an overview of the place of supply of goods and the taxation of domestic transactions and acts, export and import of goods, and intra-Community supply and acquisition. Under the VAT Act, there are also a number of differences in the taxation of supply of goods, e.g. the supply of goods to be installed or assembled, new means of transport, etc. are taxed differently from the supply of other goods.

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Taxable value and rates of taxation of intra-Community acquisitions of goods

Intra-Community acquisitions of goods in Estonia are taxed at either 20% or 9% of the taxable value of the goods. Upon intra-Community acquisition of goods, the taxable value of the goods is comprised of the sales price of the goods and other amounts which must be paid to the seller of the goods by the purchaser of the goods or by a third party in connection with the acquisition of the goods (subsection 1 of § 12 of the VAT Act). If the seller has added transport costs to the price of the goods, these costs will also be taxed together with the cost of the goods.

If assets used for business purposes in another Member State are brought to Estonia for business purposes here, the taxable value of the supply is calculated in the same way as the intra-Community acquisition of goods. The taxable value of supply is the purchase price of the goods or, in the absence thereof, the cost price of the goods.

Value added tax payable in Estonia or abroad is not included in the taxable value. It should be borne in mind that the intra-Community acquisition of goods arises and the goods are subject to taxation in Estonia even if the seller has added VAT at the rate of his Member State to the price of the goods, but the invoice has been issued in the name of an Estonian taxable person and the goods have been transported from another Member State to Estonia. Such a situation may arise, for example, when the buyer delivers the goods to Estonia himself and is unable to prove to the seller when buying the goods that the goods are being transported to another Member State, which is why the seller has no right to apply a zero rate at the moment of sale. In this case, foreign VAT is excluded from the taxable value upon taxation of goods in Estonia. If such a situation arises, the Estonian taxable person could turn to the seller of the goods for a new 0% VAT invoice and refund of the amount of VAT paid to the seller (if he has already paid for the goods), and if necessary, provide the seller with proof that the goods have been transported to Estonia.

The taxable value can be reduced by the discount granted to the purchaser on the intra-Community acquisition of goods where this is applied at the time of the sale of the goods and for commercial purposes.

Last updated: 25.10.2022

Last updated: 06.09.2022

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