March 2024

Estonia Introduces New VAT Rate Effective January 1, 2024

We’d like to inform you of an important change regarding Estonia’s VAT rate, effective January 1, 2024. The standard VAT rate will be adjusted from 20% to 22%.

To ease the transition, the government has established transitional provisions for transactions completed before January 1, 2024. If payments are received in 2024 for transactions finalized before this date, the VAT rate will remain at 20%, based on the time of income receipt.

Furthermore, for long-term contracts such as lease agreements and real estate contracts concluded before May 1, 2023, parties may continue applying the 20% VAT rate until December 31, 2025. These contracts must explicitly state the inclusion of VAT in the price or the addition of 20% VAT, without provision for price adjustments due to VAT rate changes.

Should you have any questions or require further assistance, please don’t hesitate to contact us at We’re here to provide guidance and support during this transition period.