Regulatory updates - Estonia

On December 3, 2024, the Ministry of Finance submitted the proposals and unveiled the intention to develop the bill for amending the VAT Act.

The Ministry is considering:

- the abolishment of the 1,000 EUR threshold for declaring transactions[1] and

- the introduction of mandatory e-invoicing for all VAT-subjected B2B transactions.

The bill expected to be drafted in 2025 might come into effect in 2027.

In the meantime, as previously reported by Pagero, all businesses registered as e-invoice receivers in the business register (including all public sector entities) will be able to require suppliers to submit machine-readable electronic invoices starting July 1, 2025.

To sum up, the extension of e-invoicing requirements entering into force from July 1, 2025 is still in force, whereas the Ministry proposed to roll out mandatory e-invoicing from 2027. 

Pagero closely monitors these developments and will continue notifying our customers about the latest changes.

[1] Currently, VAT declarations KMD and an Annex KMD INF listing all sales and purchase invoices with domestic counterparties exceeding 1,000 EUR in one month must be declared on KMD INF.

On 18 September 2024, the Estonian Parliament passed amendments to the Accounting Act. The only change after Pagero’s previous update is a revised timeline, with the implementation now set to commence on 1 July 2025.

Starting 1 July 2025, all businesses registered as e-invoice receivers in the business register (including all public sector entities) will be able to require suppliers to submit machine-readable electronic invoices.

According to the ultimately approved version of these amendments:

• The company can now do its registration and not only by its e-invoice operator;
• The parties are allowed to agree upon any invoice format;
• If no particular format is agreed upon, the European e-invoice standard format (EN 16931) becomes the required format.

On 2 May 2024, the Government of Estonia approved the amendments to the Accounting Act introduced by the Ministry of Finance to use e-invoices for business transactions. This Act aims to standardize and simplify the e-invoicing formalization requirements. 

Starting from January 2025, all businesses registered as e-invoice receivers in the business register (including all public sector entities) will be able to require suppliers to submit a machine-readable e-invoice. 

The transaction partners will agree on the original document's format and submission terms. However, the obligation to use the European e-invoice (EN 16931) standard exists by default if the buyer requires the seller to submit an e-invoice and the parties have not agreed on another format.