10 Most Frequently Asked Question Regarding Accounting in Estonia

  1. Why do I need to keep accounting for my company?

Well, it is required by the law. When doing business in Estonia, an entrepreneur undertakes to comply with local accounting standards. The company also needs to maintain accounting records so that creditors and business partners can be confident in the company’s financial position and accurate tax calculations.

  1. What companies need to submit accounting reports?

All active companies and foreign branches registered in Estonia must submit reports. The accountability of every Estonian company must comply with government regulations.

  1. What is an annual report in Estonia?

Annual reports are intended to give shareholders and other interested people information about the company’s activities and finances. The annual report’s mandatory components include the management report on the company’s activities, the balance sheet, the company’s profit and loss statement, and the company’s capital statement.

  1. Does every company need to submit an annual report?

Yes. Each company registered in Estonia must submit an annual report. Even companies with no activity during the financial year.

  1. What is the deadline for submitting an annual report in Estonia?

Annually, no later than 6 months after the end of the financial year (often – the calendar year, from 1 January to 31 December), an annual report should be prepared and submitted to the Commercial Register containing a comprehensive overview of the company’s performance for the previous financial year.

  1. Does my company need a VAT number?

The obligation to register the VAT number with the company arises when the volume of sales in Estonia exceeds 40,000 EUR from the beginning of the calendar year. A company can also apply for VAT registration before this threshold is reached.

  1. Do I need to register a company taxable if the turnover is less than EUR 40,000?

No. If the company’s turnover in Estonia has not exceeded 40,000 EUR, registration as a VAT payer is voluntary. A company can apply for VAT registration before the designated threshold is reached.

  1. Does my company need to be audited?

The audit of the annual report is mandatory if at least two indicators of the financial year are exceeded:

  • Income/profit from sales –  4,000,000 EUR
  • Total assets at the reporting date – 2,000,000 EUR
  • Personnel of the company – 50 people

Or, if at least one of the following indicators is exceeded:

  • Income/profit from sales – 12,000,000 EUR
  • Total amount of assets at the reporting date – 6,000,000 EUR
  • The number of personnel is 180 people
  1. Do I have to pay taxes for employees outside Estonia?

No, you don’t. If the company has employees who are not tax residents of Estonia and work outside Estonia, the salary payments to these foreign employees are not taxed in Estonia, and we do not file tax returns for these employees. Foreign employees must declare their income on behalf of an Estonian company in the country in which they are taxable.

  1. What affects the cost of accounting services for the Estonian company?

The price of accounting depends on VAT availability. The cost can also vary depending on the amount of the processed documents, employees, and other company’s responsibilities.

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