Estonia raises its standard VAT rate from 20% to 22% from 1 January 2024

What changed in detail

From 1 January 2024 Estonia’s standard VAT rate was 22%, up from 20%. The increase was made by the Käibemaksuseaduse muutmise seadus (Act amending the Value Added Tax Act), adopted by the Riigikogu on 19 June 2023, proclaimed by the President on 27 June 2023 (decision no. 317) and published in Riigi Teataja on 1 July 2023 as RT I, 01.07.2023, 2. Section 1 point 1 replaces “20” with “22” in § 15(1) of the VAT Act; § 2(1) puts the Act in force on 1 January 2024.

The reduced rates of 9% and 5% did not change in 2024. The same Act scheduled separate changes to them from 1 January 2025.

Two transitional rules were added to § 46 of the VAT Act, each running to 31 December 2025:

• a taxpayer using cash-basis VAT accounting could pay 20% on supplies taxed after 31 December 2023 if the invoice was issued and the goods or services delivered before 1 January 2024;
• a taxpayer could keep applying 20% under a written contract concluded before 1 May 2023 whose price included 20% VAT and which did not provide for a price change if the VAT rate changed.

What it means

The 22% rate is spent. The Security Tax Act (RT I, 02.01.2025, 2) raised the standard rate again, to 24% from 1 July 2025, and cut both transitions (cash basis and pre-1 May 2023 contracts) from 31 December 2025 to 30 June 2025 (Estonia raises VAT to 24%).

The 22% rate still matters for supplies whose tax point fell between 1 January 2024 and 30 June 2025: corrections, credit notes and audits of that period use 22%, not today’s 24%. The same 2023 Act also moved accommodation to 13% and press publications to 9% from 1 January 2025 (accommodation and press rates).