How to Check Your Readiness for Estonia’s 2027 VAT Reform

Estonia’s VAT Act changes on 1 January 2027, moving the mandatory reporting of invoice data out of the VAT return’s Annex, known as KMD INF, and into the VAT return itself. But according to the Estonian Tax and Customs Board’s explainer updated on 16 July 2026, the new file logic and taxonomy only take effect from the April 2027 tax period. Old CSV and XML files won’t be accepted once that period starts. In practice, that’s two deadlines, not one: the legal framework shifts in January, and the technical reality shifts in April. You can test your readiness now by checking four things: whether your source data holds up invoice by invoice, whether your software can actually produce the right file, how access rights are assigned, and how the correction process works.

Start With the Dates: 1 January and April 2027 Are Not the Same Thing

The Legal Change on 1 January 2027

The new wording of § 27 of the VAT Act takes effect on 1 January 2027. From that date, KMD INF and the intra-Community supply report, filed separately today as Form VD, disappear as standalone forms. Their data folds into the main VAT return. That’s a legal change, not a technical one.

The Technical Change From April 2027

The Tax and Customs Board says in its explainer that the new taxonomy actually applies from the April 2027 tax period. January, February and March can still be filed the old way. The normal filing deadline for the April period is 20 May 2027. That three-month gap between January and April is exactly the window to run your own readiness check.

Three Things to Keep Separate: VAT Return, Invoice Data, and E-Invoices

What the Reform Actually Reports

Most of the confusion comes from the word “invoice.” This reform is about sending invoice source data, such as counterparty, amount, and VAT rate, to the Tax and Customs Board. It has nothing to do with sending an invoice to your customer.

What an E-Invoice Is (and Isn’t)

An e-invoice, per the Ministry of Finance’s explainer, is a machine-readable file built on a shared standard that moves directly from the seller’s software into the buyer’s software. It’s not a PDF, and it’s not a scanned image of an invoice. KMD and KMD INF data is something else entirely: reporting information that flows from a company’s accounting records to the tax authority. You can keep issuing customers exactly the invoices you issue today. Sending them an e-invoice is governed by a different rule, on a different timeline.

Readiness Test #1: Is Your Source Data Clean, Invoice by Invoice?

The Fields Each Record Needs

The Tax and Customs Board’s technical material specifies that each transaction record has to describe at least:

• transaction type and invoice identifiers, such as number, date, and type;
• counterparty data;
• taxable value broken down by VAT rate;
• input VAT and the applied VAT rate;
• advance payments and credit invoices, recorded separately.

Check whether every invoice has these fields filled in the same way. If three different people enter purchase invoices in three different formats, this is exactly where the gaps show up.

The €1,000 Threshold Still Applies

The threshold for when invoice data becomes mandatory hasn’t moved in the new wording: at least €1,000 excluding VAT in total per counterparty per tax period, with purchase and sales invoices counted separately. Invoices covered by professional or official secrecy aren’t reported, though the recipient of the service can still choose to show them.

Readiness Test #2: Can Your Software Actually Produce the Right File?

Ask Your Vendor Three Questions

Data exchange runs through XBRL GL, an XML-based format (a structured, machine-readable text format built on tags) that describes business transaction data in one shared structure. If you’re running foreign accounting software, or multiple systems at once, say a separate tool for sales invoices and another for purchases, ask your software vendor three things in writing. Does the software already support XBRL GL? Is the vendor taking part in the Tax and Customs Board’s testing round running from September to December 2026? And how will data from multiple sources be assembled before it’s sent? A vendor who won’t answer in writing has, in effect, already answered.

Readiness Test #3: Who Sends It, Who Sees It, and Who Confirms It?

Access Rights Through X-Road

When software submits data automatically, it goes through a secure server: your company’s technical connection point into the state’s X-Road data exchange layer, the shared infrastructure Estonian public services use to move data between systems. That connection needs its own access rights assigned. The Tax and Customs Board doesn’t pull data out of your software on its own. Your company decides when to send it, but the deadline still has to be met. The new setup splits this into separate services: submitting data, requesting a feedback report, confirming the return, and requesting detailed data.

Confirmation Still Sits With a Person

Per the Tax and Customs Board’s explainer, data only reaches the office once your accountant has confirmed the submission inside your company’s software. Anything added after that confirmation doesn’t move automatically. If your accounting is handled by an outside provider, settle now who holds confirmation rights in the software and who’s tracking the deadline.

Run a Trial Round Before the Real Deadline

The most reliable way to test readiness is to walk one month’s data through the whole process without ever actually submitting it:

1. Generate one tax period’s worth of data from your software in the new format.
2. Compare the resulting totals against your current KMD and KMD INF figures. Mismatches point to where your source data is thin.
3. Read through the validation error messages.
4. Test the correction process. Per the Tax and Customs Board’s technical material, you can’t edit a single line on its own. A mistake means resubmitting the entire tax period’s data, and the previous version gets cancelled.
5. Agree who’s responsible for checking, sending, and confirming the data once this goes live.

A trial round costs you mostly time, not money, and it shows you exactly where the real gaps sit: in the software, in data entry, or in who’s supposed to be doing what.

What This Doesn’t Mean Yet

No Mandatory Machine Interface Yet

First: automatic data transfer through a machine interface (a direct system-to-system connection, as opposed to manual upload) isn’t mandatory. The Tax and Customs Board says so directly: during the transition period, e-MTA still allows file upload and manual entry.

The €1,000 Threshold Hasn’t Been Scrapped

Second, the €1,000 threshold hasn’t been scrapped as of 17 August 2026. It still applies per counterparty per tax period under the new wording.

No General B2B E-Invoicing Mandate

Third, this reform doesn’t create a general B2B e-invoicing mandate for every Estonian company. Under § 7¹ of the Accounting Act, the format of a machine-processable source document is agreed between the parties to a transaction, and only an accounting entity that has registered itself as an e-invoice recipient in the Business Register can require one as a matter of obligation. For everyone else, e-invoicing remains a matter of agreement.

That also sets this apart from the EU’s ViDA package, VAT in the Digital Age, which introduces a mandatory digital real-time reporting requirement for cross-border B2B transactions, but not until 1 July 2030. Estonia’s VAT return data reform is a separate and earlier step. The readiness you can check right now is only about how invoice data travels from your company’s accounting records to the tax authority, not about what format invoices take when they move between business partners.