When is a person subject to registration as a person liable to value added tax with limited liability

A person is subject to registration as a person liable to value added tax with limited liability (hereinafter: a VAT payer with limited liability), if a person is not registered as a VAT payer but purchases goods from another VAT payer of the other MS the taxable value of which exceeds 10,000 euros as calculated from the beginning of a calendar year or receives certain services from a foreign person engaged in business who is not registered as a VAT payer in Estonia.

The difference between a VAT payer and a VAT payer with limited liability lies in the fact that a VAT payer with limited liability pays value added tax only on the intra-Community acquisition of goods and on receiving the services from a foreign person engaged in business. 

A VAT payer with limited liability does not add value added tax to the prices of the goods transferred or services provided  by himself or herself and he or she does not have the right to deduct input value added tax either.

The obligation to register as a VAT payer with limited liability shall be created as of the date of receiving the services listed in subsection 10 (5) of the Value-Added Tax Act:

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

  2. advertising services;

  3. services of consultants, accountants, lawyers, auditors and engineers, translation services, as well as data processing or the supplying of information;

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

  5. allowing use of manpower;

  6. the hiring or leasing of or establishment of a usufruct on movables, except means of transport;

  7. electronic communications services, including assignment of rights to use transmission lines;

  8. electronically supplied services;

  9. allowing 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 permitted limit values of emissions of greenhouse gases regulated by the Ambient Air Protection Act;

  11. refraining from the services mentioned above, waiving the exercise of a right or tolerating a situation for a charge.

A person is required to submit an application for registration oneself as a VAT payer with limited liability to the Tax and Customs Board within three working days as of the date on which the obligation arises.
 

05.04.2016