• Service: Tax & Legal, Indirect Tax (VAT, Customs & Excise)
  • Type: Regulatory update
  • Date: 2/25/2014

InfoCourier - February 2014 

InfoCourier - February 2014. InfoCourier is a monthly e-newsletter that overviews some of the latest changes in Estonian legislation.

Amendments to the VAT Act


Riigikogu (the Parliament of Estonia) has adopted several amendments to the Value-Added Tax (VAT) Act. Some of the amendments enter into force in 2014 and some in 2015.


The most significant amendments effective as from 1 March 2014 include the following:

  • The amendments clearly stipulate the option of voluntary registration as a taxable person in the case of intra-Community acquisitions and exports of goods which are exempt from tax.
  • The deadline for a tax authority to make a decision to register a person as a taxable person has been extended from the current three days to five working days.
  • Taxpayers will be entitled to deduct VAT paid on the services received prior to registering as a taxable person as input VAT upon reselling the services. The amendment results from the European Court of Justice's judgments 385/09.
  • Accounting for VAT may not be amended in cases where a credit invoice is submitted due to full or partial non-payment for goods or services.


Amendments entering into force on 1 January 2015 are mostly related to electronically provided services and result directly from the amendments to Council Directive 2006/112/EC and Implementing Regulation (EU) 282/2011 that are effective as from 1 January 2015.


  • The place of supply of electronically supplied services will be the place where the customer is located regardless of whether or not the customer is engaged in business. Therefore, the amendment will mostly affect services provided to individuals since the above policy already applies to services provided to persons engaged in business.
  • Electronic communications services will become subject to a special scheme that will facilitate meeting VAT obligations in another member state upon providing such services. If taxpayers wish to apply the special scheme on providing such services, they will declare and pay VAT calculated on services provided in another member state to the Estonian Tax and Customs Board who will transfer the received amount to the tax authority of the other member state.


For further information, please contact Kersti Tirmaste,



Individuals can file their income tax returns for 2013 up to 31 March 2014


Please be reminded that the due date for filing personal income tax returns for 2013 is 31 March 2014. The tax return may be submitted from 15 February either electronically via the e-Tax Board or on paper.


Resident individuals have the obligation to file the tax return on the income earned in the previous calendar year. The obligation also covers income earned abroad. The tax authority has emphasised that this year they will be considerably more focused on income earned abroad and accurate declaration of such income. If persons not under the obligation to declare their income wish to claim tax relief (e.g. they have paid interest on a housing loan during the year, or paid for training courses, made donations or gifts, or they are entitled to the increased basic exemption provided starting with the second child), they have to file the tax return in order to get the relief. Non-residents have to file the income tax return if they have gained from transfer of property, earned business income or income on which income tax has not been withheld. Non-residents are not issued tax notices by the Tax and Customs Board.


Since the deadline for submitting personal income tax returns coincides with that of paying land tax, land tax liabilities could be offset against the income tax refund receivable.


For further information, please contact Regina Valge,



Court judgments


Taxation of income earned on sale of inherited property


On 12 February the Supreme Court made their decision in case 3-3-1-97-03. The judgment by the Supreme Court set a precedent – according to the Court decision together with the estate also certified expenses (the acquisition cost) which a bequeather made in order to obtain, improve or supplement the property are transferred to the successor. Based on the Supreme Court decision the unequal treatment of taxpayers as regards taxation of a bequest received either in cash or in the form of any other property is likely to be abolished.


The question discussed in this case is whether or not the term "expenses incurred by the taxpayer" also encompasses expenses incurred by a predecessor (bequeather). According to the tax authorities' practices so far, and based on the decisions by lower courts the expenses incurred by a bequeather are not transferred to the successor. The Administrative Law Chamber of the Supreme Court explained that the right to reduce gains derived from transfer of property by the acquisition cost of that property is a common proprietary right that is not inseparably bound to the person of the bequeather. The tax law does not stipulate any specific provision that would preclude transfer of the right to deduct the acquisition cost to the successor. Consequently, based on the principle of equal treatment the successor must be taxed in the same way the bequeather would have been taxed if the latter had transferred the flat during his or her lifetime.


For further information, please contact Regina Valge,







InfoCourier does not cover all amendments to Estonian legislation.