E-Commerce & B2C Services in Estonia
The EU VAT reform, which took effect on July 1, 2021, affects e-commerce firm owners that conduct cross-border transactions within the EU or import items from outside the EU. The new VAT plan called One-Stop-Shop (OSS) allows enterprises to register for VAT and file quarterly VAT returns in a single EU country. Another concept, the IOSS or the Import One-Stop-Shop, is created for imported items.
Read more about B2C services & E-Commerce in Estonia in our comprehensive guide.
B2C Services in Estonia
A digital product encompasses any item or service that is stored, transported, and utilized in an electronic format. These products are typically acquired by consumers through means such as email delivery, Internet downloads, or website access. To sell digital products in any EU member state, including Estonia, it is necessary to register with the One-Stop Shop (OSS).
The VAT One-Stop Shop (OSS) is a voluntary system that enables you to manage VAT obligations in a single EU country. Eligibility for this arrangement is based on providing cross-border telecommunications, broadcasting, or digital services to non-taxable individuals.
Among the OSS services are:
- Website hosting.
- Supply of software.
- Access to databases.
- Downloading apps or music.
- Online gaming.
- Distance teaching.
- Accommodation services carried out by non-established persons.
- Admission to cultural, artistic, sporting, scientific, educational, entertainment events, fairs & exhibitions.
The OSS eliminates the need for you to register with tax authorities in each EU country where you sell. Instead, you can register for VAT, file VAT returns, and make payments in a single location under the OSS framework. You must apply the rules of the OSS scheme to all your clients in all the EU nations to which you provide services or products.
Currently, there are two schemes in operation under OSS:
- The union scheme, which is available to enterprises that have been formed in the EU or that have at least one branch in an EU country.
- The non-union scheme is intended for enterprises that have not been created in the EU and do not have any branches in the EU.
Selling in Estonia?
Ecommerce in Estonia
The VAT overhaul in the EU, implemented on July 1, 2021, impacts e-commerce business owners engaging in cross-border sales within the EU or importing goods from outside its borders. The updated VAT system, known as the One-Stop-Shop (OSS), enables companies to register and submit VAT returns quarterly in just one EU nation. Additionally, for imported goods, there’s the IOSS, which stands for the Import One-Stop-Shop.
For VAT on some digital products in the EU, the One-Stop Shop (OSS) model extends the previous Mini One-Stop Shop (MOSS) scheme. Both aim to simplify tax compliance and reduce the administrative load on businesses while increasing tax collection. Using the OSS scheme allows you to register for VAT and file your VAT returns within a single nation. If you have consumers in many countries, you no longer need to keep track of varied distance selling thresholds in each country. The annual EU distance selling threshold for Estonia was EUR 35,000. Instead, an EU-wide EUR 10,000 threshold will apply.
The OSS (One-Stop-Shop) is developed for EU enterprises selling goods to customers within the EU. In the EU, IOSS is meant for non-EU enterprises selling items worth up to EUR 150 to EU clients. In this case, ordinary VAT import regulations apply.
Last Updated: 01/11/2023
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