Accounting geeks, be aware – Estonia’s VAT has just increased!

Hey, fellow Estonians and e-residents! Nothing “fun”  to share but still very useful – let’s chat about accounting and VAT in particular. So, buckle up for a quick ride on the upcoming VAT changes hitting us from January 1, 2024.

So what is happening with VAT?

Alright, here’s the summary. Estonia decided to spice things up by turning the VAT dial from 20% to 22%. Why? Well, no red carpet was rolled out for the ‘why,’ but change is the only constant, right?

Not going to sugarcoating it will have an impact on all parts of our company and management groups, You, and Everyone.

Now, what’s this change mean for us at Introduct, our clients, and other businesses  in Estonia? Picture this: you’re chilling in December, sipping hot chocolate, and posting invoices. Life’s good, right? Wrong! Fast forward to January, and bam – your invoices are rocking a 22% VAT, not the cosy 20% from December. Ouch…

For those with long-term contracts signed before May 1, 2023 – good news! You can still rock the 20% VAT until December 31, 2025. Just make sure your contract shouts out loud that it’s all about that 20% life and doesn’t hint at a sneaky change due to VAT rate shenanigans.

Friendly Advice to Accounting teams and Companies!

Here’s a nugget of wisdom – pay attention to the calendar when posting those invoices. If it’s hitting January 1, 2024, or later, cue the 22% VAT. Don’t let your December dreams turn into a January VAT nightmare.

Now, we know change can be a tough sell. Will this 2% hike affect our relationship with you, our awesome clients? We hope not! We’re crossing our fingers that it’s just a minor hiccup. But hey, let’s all be vigilant – post those invoices by December 31, and we can dodge the VAT drama together.

Change is inevitable, and so are tax hikes. Let’s roll with it, Estonia! Here’s to hoping the VAT vibes in 2024 are super smooth!