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The rule is quite simple and depends on the type of service your company offers and whether it is subject to VAT or not.

First of all, if your company is NOT subject to VAT, that is, it does not have a VAT number starting with EE, you will NEVER add VAT to your invoices.

If your services require your direct intervention (eg software development, consulting, marketing, etc.) the following rules are applied:

If your customer is a B2B (a company) in Europe, with a VAT number, you will not have to add VAT to the invoice (0%). Instead, you add a clause to your invoice like this: “The purchase is liable to Intra-Community supply 0%, Reverse charge”.

If your customer is B2C (individual), or B2B without a VAT number, you add Estonian VAT (20%) to the invoice.

Finally, if your customer is outside of Europe (eg. the United States), you do not add VAT (0%).

On the contrary, if your services do not require your intervention, that is, they are automated (for example, you have created a web application or a downloadable eBook), these rules are applied:

If your customer is a European B2B (a company) with a valid VAT number, you do not add VAT (0%) and write the same clause.

On the contrary, if your customer is B2B or B2C and does not have a VAT number, but is from Europe you add the VAT of your country of origin to the invoice. For a Spanish customer, that would be 21%.

Finally, if your customer is outside of Europe, you do not add VAT (0%).

IMPORTANT EXCEPTION: Remember that your company needs to add Estonian VAT (20%) to any invoice you make to another Estonian company (since it is an internal operation within the Estonian tax system).



You have more information about how Estonian VAT and taxes work here.
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