When an Estonian enterprise sells goods to private persons in another Member State via its website and sends the goods to the client by post, it must keep in mind that the sales of goods are subject to Estonian VAT until the maximum distance selling limit of the other Member State has been exceeded. The maximum distance selling limits in European Union Member States are different. In many cases (incl. Estonia), the maximum limit is 35,000 per calendar year, but this is not an absolute rule. I advise finding out what the maximum distance selling limit of each specific state is. If the maximum limit is exceeded, the Estonian enterprise will have to register as a taxable person in the country of destination and add the VAT of the local country to the sales.
This is also the way the system works when goods are sold to Estonia. If a taxable person of another Member State is engaged in distance selling to a person of Estonia and the taxable value of the supply of the distance selling exceeds 35,000 euros (subsection 19 (4)), the taxable person must register here as a taxable person and, after registration, pay VAT in Estonia on the distance sales carried out here. As in the case of distance selling, the taxable person of another Member State only registers here as a taxable person but usually does not do business in Estonia (e.g. mail order sales), so it is useful for this person to appoint a tax representative in Estonia to carry out their obligations in Estonia.
When a taxable person carrying out distance selling exceeds the maximum limit in one Member State and has to register in that Member State and pay VAT in that member state, the taxable person still has to pay tax in Estonia on the distance selling carried out in those Member States where the maximum limit is not yet exceeded.
We will send you articles keeping you up to date with the latest trends and developments in accounting, taxation or legal fields.