Estonia has increased the VAT rate for accommodation services and press publications. Additionally, the Estonian Parliament has adopted a raise in the standard VAT rate from 22% to 24% by July 2025.

VAT Rate Changes in Estonia by 2025
Estonia has approved several VAT rate changes that will take effect from January 2025:

• The VAT rate on accommodation services, including those with breakfast, will rise from the current 9% to 13%.
• The VAT rate for press publications will increase from 5% to 9%, returning to the VAT rate applicable before August 2022.

To ease the transition, special provisions have been introduced for users of the VAT cash accounting scheme. These provisions allow businesses to continue paying lower VAT rates until December 31, 2026, under certain conditions:

• A 9% VAT can be applied to accommodation services invoiced before January 1, 2025, but delivered after that date.
• A 5% VAT can be applied to press publications invoiced before January 1, 2025, even if delivered later.

Furthermore, the Estonian Parliament has adopted a regulation raising the standard VAT rate from 22% to 24% by July 2025. This new VAT rate is part of a development plan to enhance the country’s defense capabilities and is designed to be a temporary measure until the end of 2028. The regulation is still pending publication as an official law. The standard VAT rate in Estonia was previously raised from 20% to 22% in January 2024.

These changes may significantly affect businesses, especially those involved in VAT reporting. It’s essential for companies to assess the impact of these shifts on their VAT compliance and reporting obligations.