The tax representative of a non-resident is a person to whom a corresponding activity licence has been issued by the Estonian Tax and Customs Board (ETCB) and whom a non-resident may authorise to represent the non-resident for the performance of the obligations arising in Estonia from an Act concerning a tax or from the Taxation Act. A legal person founded in Estonia or a branch of a foreign legal person entered in the Estonian commercial register, which the ETCB deems to be reliable, may act as a tax representative.
All the rights and obligations of a registered taxable person who is a non-resident extend to the tax representative. The tax representative is required to ensure that the principal’s monetary and non-monetary obligations arising from the Taxation Act or an Act concerning a tax are performed within the set term and in full.
The information about the tax representatives shall be published on the website of the tax authority on the Internet.
The legal basis for acting as a tax representative is provided for in § 81 of the Taxation Act.
A person who wishes to act as a tax representative shall submit an application for an activity licence of a tax representative also either into a service bureau of the ETCB signed with a handwritten signature on paper or to the e-mail address: email@example.com signed digitally with a qualified electronic signature.
The format of an application is free and the following details are indicated into it concerning the tax representative:
- name and address,
- registration code,
- area of activity and place of business.
A person who wishes to act as a representative of a distance seller of excise goods shall indicate in his/her application in addition:
- the type of excise goods (alcohol, tobacco, fuel);
- the contact details of a person responsible for the accounting of a tax representative and the place of keeping the accounting records.
The issue of an activity licence to a tax representative does not require an existence of a particular principal. At the same time, the tax representative who has received an activity licence must forward the information to the ETCB concerning the particular principal and the document concerning the basis for the representation of a non-resident at the earliest opportunity.
An applicant may submit an application together with the accompanying documents into a service bureau of the ETCB.
A decision on the grant of an activity licence shall be sent to an applicant in digital form, if possible, or on paper at the request of the applicant.
If a tax representative of a distance seller of excise goods is concerned, a special code of a tax representative of a distance seller of excise goods shall be assigned to him/her in addition to the code of the activity licence of the tax representative.
An activity licence is termless.
On the website of the ETCB there shall be published the name and address of a tax representative, area of activity and place of business indicated in the application, registry code and activity licence code, as well as the date of the beginning of the validity of the activity licence and the notation concerning the operation as a distance seller of excise goods. The information shall be published on the website of the ETCB in Estonian, Russian and English.
Conditions for issuing activity licence
The ETCB shall decide on the grant of an activity licence to a tax representative within twenty calendar days as of the receipt of an application.
When deciding on the grant of an activity licence, the person’s compliance with the requirements set for a tax representative shall be verified, whereas the person’s performance of earlier obligations arising from acts concerning taxes may be taken into consideration as well.
Resulting from subsection 81 (4) of the Taxation Act, a tax representative:
- must be solvent;
- must have an impeccable reputation;
- must not have tax arrears.
The information required from an applicant to furnish proof concerning the applicant’s solvency is the following:
- the last approved balance sheet of the terminated financial year (if it is not available from the commercial register);
- the balance sheet on the actual state;
- the bank statement of all bank accounts on last six months (a statement of accounts taken from an internet bank suits as well).
The tax authority may request that the applicant furnish supplementary proof concerning the applicant’s financial situation in order to verify the applicant’s solvency.
Information concerning existing tax arrears shall be documented as at the moment of the submission of a request. The tax arrears that are less than ten euros and the tax arrears that are being paid in instalments shall not be regarded as tax arrears.
A tax representative shall submit a security at the request of the tax authority if it has good reason to doubt about the applicant’s solvency or reputation.
A person who submitted an application shall choose a type of security himself/herself in general. The tax authority shall prefer a bank guarantee with a reasonable scope as a security of a tax representative. As a rule, not more than 50 per cent of the amount of one-month tax obligations of the principal(s) shall be considered as the reasonable scope. The tax authority has the right to reassess the amount of the security required.
The tax authority shall make a reasoned decision upon the refusal to satisfy an application for an activity licence of a tax representative of a non-resident, wherein the reasons with explanations for refusal to issue the activity licence of the tax representative shall be indicated.
An application shall be declared inadequate as well, if the required documents are lacking or do not correspond to the ones required.
Suspension or revocation of activity licence
An activity licence of a tax representative shall be suspended or revoked on the basis of a written request (signed on paper or signed digitally and forwarded by e-mail) by the tax representative or by the ETCB.
The tax authority may initiate the proceedings of suspension or revocation of the activity licence of the tax representative:
- if bankruptcy or liquidation proceedings have been initiated against the tax representative;
- if the tax representative violates the obligation to ensure that the principal’s monetary and non-monetary obligations arising from the Taxation Act or an act concerning taxes are performed within the set term and in full;
- if the tax representative does not meet the requirements which enabled the issue of the activity licence of the tax representative.
The validity of the activity licence shall be suspended for the set term until the circumstances requiring the suspension are eliminated. If the circumstances requiring the suspension of the activity licence of the tax representative have not been eliminated upon expiry of the suspension term indicated in the decision, the activity licence of the tax representative shall be revoked.