You may wonder what an invoice should look like once you establish your Estonian company and start trading. Unicount has published a sample sales invoice for clients who are asking us what to write on their first invoices.
In this article, we explain the mandatory fields of an expense invoice depending on whether your company is registered for VAT or not.
Invoices for companies not registered for VAT
Estonian companies do not get a VAT registration or any other tax number automatically when incorporated. This means there won't be any input value added tax (VAT) to deduct and reclaim from the Estonian Tax and Customs Board. Your newly registered company that just started trading and has not registered for VAT loses the input VAT paid on its purchase invoices.
According to the Estonian Accounting Act § 7, the source document has to contain the following information for a non-VAT registered supplier. It applies to the expense documents where your company has no possibility for input VAT deduction because of not being registered for VAT:
the date of the expense document;
the economic substance of the transaction;
the name and number of the expense document;
the numeric figures relating to the transaction (quantity, price and total amount);
identification data of the parties of the transaction (Seller and Buyer Business Register data).
Here are some examples of the most common purchases:
receipt from a store;
receipt from an automatic gas station;
taxi ride which has been paid via a mobile app;
other invoices for various purchases.
If the invoices miss the buyer's name (your company name or your name), then the source document will not directly prove that the expense is related to any business activity. In such cases, the company name has to be written by hand onto the receipt (for an electronic document before taking the picture).
If the document does not have the required fields, the document is considered not to be related to business activities and is taxed with the Estonian income tax. The same thing happens if you do not have the document but the bank statement shows transactions with third parties.
The expense document examples above are missing the service/goods recipient name (your company name) and writing the company name on them would be necessary before making the photos or scans.
A company stamp can also be used with your company data to save time from handwriting the buyer's name. The stamp is not a mandatory item for Estonian companies so only buy it if you think that you have use for it.
In the example above, there is the expense receipt from the store (on the left) and also the card payment receipt (on the right). The card payment receipt itself is not sufficient as there’s no economic substance of the transaction on the receipt.
VAT invoices for VAT-registered companies
In Estonia, the obligation to register for VAT arises when the taxable turnover in a financial period (calendar year for Unicount clients) exceeds €40,000. A voluntary registration before reaching the registration threshold is also possible.
Estonian companies do not get registered for VAT automatically once they are incorporated. If you want to register your company for VAT voluntarily, please contact us.
According to the Estonian VAT Act § 37, the following information needs to be shown on the invoice:
the serial number and issue date of the invoice;
the name and address of the taxable person and the person’s registration number as a taxable person (VAT number);
the name and address of the acquirer of goods or the recipient of services;
the registration number of the acquirer of goods or the recipient of services as a taxable person if the acquirer of goods or the recipient of services has tax liabilities upon the acquisition of goods or receipt of services;
the name or a description of the goods or services;
the quantity of the goods or extent of the services;
the date of dispatch of the goods or provision of the services or the date of receipt of full or partial payment for the goods or services if the date can be determined and differs from the date of issue of the invoice;
the price of the goods or services exclusive of value added tax and any discounts, if these are not included in the price;
the taxable amount broken down by different rates of value added tax together with the applicable rates of value added tax or the amount of supply exempt from tax;
the amount of value added tax payable, except in the cases provided by law. The amount of value added tax shall be indicated in euros.