Estonian VAT Rates in 2026: Which Ones Apply, and When?

Four VAT rates apply in Estonia in 2026: the standard rate of 24%, the accommodation rate of 13%, the reduced rate of 9% and the 0% rate. According to the Tax and Customs Board’s overview of 2026 tax changes, there are no VAT rate changes this year, and none of these rates moves during the year ^[2]. So the confusion no longer comes from the rates themselves — it comes from the old 20%, 22% and 5% rates, which can still surface on a correction invoice or in cash-basis accounting.

This piece is written for directors and accountants of Estonian OÜs, for e-resident companies, and for Latvian and Lithuanian sellers who invoice Estonian customers. The mental model that matters most is simple: you don’t pick the rate by the date on the invoice, but by when the supply is created. And crossing the registration threshold never changes which rate goes on the invoice.

The short answer: four rates that don’t move mid-year

Rate	Mainly applies to	From	Main exception
24%	Standard rate — all goods and services with no special provision	1 July 2025 [2]	Applies whenever there is no basis for a reduced rate, 0% or exemption
13%	Accommodation, and accommodation with breakfast	1 January 2025 [2]	Other goods or services bundled with accommodation don’t automatically fall under 13%
9%	Books and study literature, medicines and certain medical devices, press publications	–	Publications with advertising, classifieds, video, music or erotic content are excluded [3]
0%	Exports, intra-Community supply of goods, certain international transport services	–	Not the same as exempt turnover — it still has to be declared [3]

The standard rate applies whenever the VAT Act does not provide a reduced rate, a 0% rate or an exemption for a specific good or service ^[2].

Why is 24% the default rate, not a separate „security tax“ line on the invoice?

Estonia’s standard VAT rate has been 24% since 1 July 2025 ^[2]. You don’t need to split it on the invoice. There is no 22% base rate with a separate 2% „security tax“ line. There is one standard rate, 24%, and it goes on the invoice like any other VAT.

One common misconception is worth clearing up right away. On 18 June 2025 the Riigikogu passed bill 645 SE, which abolished the security tax that had originally been planned to run until 2028 — but the VAT rate raised to 24% from July 2025 stayed in force and became permanent ^[5]. In other words, 24% is not a temporary number that drops back at the end of 2028. It is the permanent standard rate.

In practice, 24% covers the bulk of sales invoices: consulting, software development, construction, retail, equipment sales. If you can’t point to a reduced rate, a 0% rate or an exemption in the law for a specific transaction, the answer is 24%.

13%: accommodation, and accommodation with breakfast

Accommodation and accommodation with breakfast have been taxed at 13% since 1 January 2025 ^[2]. Before that, accommodation was 9%. That gap matters, because for older transactions the 9% rate can still appear once more (I’ll come back to that under cash-basis accounting).

Where’s the line between 13% and 24%?

Other goods or services bundled with accommodation don’t automatically fall under 13%. Breakfast included in the room price is part of the accommodation service and stays at 13%. But dinner in the restaurant, the minibar, spa treatments, conference room rental, parking or souvenirs from the hotel shop are separate supplies, and they are generally taxed at 24%. If a single invoice pulls accommodation and extra services together, the rates have to be separated on the invoice — you can’t run the whole amount through at 13%.

The cash-basis transition until 31 December 2026

A company using cash-basis VAT accounting may, under certain conditions, still pay 9% VAT on accommodation services supplied and accounted for before 1 January 2025. This transitional option (VAT Act § 46(26)) applies until 31 December 2026 ^[3]. It’s the only place 9% legitimately turns up on accommodation in 2026 — and even then only on an earlier, already-supplied service, never on a new booking.

9%: books, study literature, medicines and press

The 9% reduced rate applies to three larger groups ^[3]:

• books and study literature, both on physical media and in electronic form;
• medicines listed in the regulation of the Minister of Social Affairs, plus certain medical devices and aids;
• press publications.

The rate for press publications deserves its own note. Since 1 January 2025 it is 9% again. In between, from 1 August 2022 to 31 December 2024, press was taxed at 5% ^[3]. As with accommodation, the cash-basis transition can allow the 5% rate here too, until 31 December 2026, but only on earlier turnover (VAT Act § 46(27)) ^[3].

What doesn’t fall under 9%?

Digital form by itself doesn’t earn the 9% rate — what matters is the content. Publications that consist mainly of advertising, private classifieds, erotic or pornographic content, video or music don’t qualify for the 9% reduced rate ^[3]. The same logic usually rules out software and game content. An e-book is 9%, but a streaming service, a gaming platform subscription or an advertising publication is 24%.

Why doesn’t 0% mean VAT-exempt turnover?

This is where accounting most often goes off the rails. On the invoice, 0% turnover and exempt turnover both look like „no VAT added“, but under tax law they are completely different.

The 0% rate rests on VAT Act § 15(3) and (4). The Tax and Customs Board’s examples include goods being exported, a compliant intra-Community supply of goods, and certain services relating to international transport, seagoing vessels and aircraft ^[3]. Turnover at 0% is taxable turnover — just at a rate of zero. It has to be declared on the VAT return, and you keep the right to deduct input VAT.

Exempt turnover (for example certain financial and insurance services, or healthcare services) is something else entirely — outside taxation altogether. And it doesn’t give you a deduction right to the same extent. Mixing the two categories leads either to a wrongly completed return or to an unjustified input VAT deduction. The tax authority notices both.

For cross-border sales this becomes a practical rule: you declare exports and correct intra-Community supply at 0%, not as exempt. For Latvian and Lithuanian sellers invoicing an Estonian VAT-registered customer, this matters especially. The rules for reverse charge and 0% intra-Community supply demand proper documentation, not just an empty VAT line.

Which rate goes on the invoice?

The rate is chosen by when the supply is created ^[2]. This is the most important sentence in the whole piece: not the date the invoice is issued, but the moment the goods are delivered or the service is supplied (or payment is received, if that comes first) decides which rate applies.

That rule settles most of the borderline cases:

• Advance payment. When a customer pays in advance, the supply is created at the moment the payment is received, and the rate in force at that moment applies.
• Period and continuous services. When a service is supplied over a longer period, the turnover is split by period. That’s why transactions in the first and second halves of 2025 can carry different standard rates.
• Returns and credit invoices. A credit invoice or correction uses the same rate as the original invoice. If the original sale happened in 2024 at 22%, or earlier still at 20%, that transaction is corrected at the same rate. So in 2026 you may well see a perfectly correct 20% or 22% line on a correction invoice.

The 20% rate no longer fits new, ordinary 2026 turnover: the transitional provisions tied to the standard rate at 20% (including the exceptions in VAT Act § 46(24) and (25)) ended on 30 June 2025 ^[2]. The old rates live on only when you’re correcting an old transaction or closing out a cash-basis transition — never on a new sale.

Why not confuse the threshold with the VAT rate?

The registration threshold and the VAT rate are two different things. The threshold tells you whether you have to account for VAT at all; the rate tells you how much. Crossing the threshold doesn’t change the tax rate of any transaction.

The general obligation to register arises when your turnover with an Estonian place of supply, created since the start of the calendar year, exceeds €40,000 (VAT Act § 19¹(3)) ^[4]. No obligation to register arises if the entire calendar-year turnover consists of exempt turnover and turnover taxed at 0%, except for intra-Community supply of goods ^[4].

For foreign small businesses, an EU small-business special scheme has been available since 1 January 2025. It can be used by a business whose turnover across the European Union stays below €100,000 and which does not exceed the exemption threshold in the countries where it operates ^[4]. For Latvian and Lithuanian sellers this is a practical choice: the scheme can save you from registering in Estonia, but it doesn’t change the rate at which goods or services sold to an Estonian consumer are taxed.

The 2026 VAT logic is stable: four rates that don’t move during the year. Keep in mind that the rate depends on when the supply is created, that 0% is not the same as exempt, and that the threshold has nothing to do with the rate — and the old 20%, 22% and 5% stay exactly where they belong: on correction invoices and in the closing of cash-basis accounting, not on your new sales invoice.