Estonia’s VAT Rate Is Changing to 24%: What It Means for Your Business

Starting July 1st, 2025, Estonia will increase its standard VAT rate from 22% to 24%. This change affects all companies registered for VAT in Estonia and applies to all taxable goods and services.

What You Need to Know:

• Any invoice dated on or after July 1st, 2025 must apply the new 24% VAT rate.

• Invoices dated before July 1st can still use the current 22% rate.

• If you use Companio’s dashboard, your invoices will automatically apply the correct rate based on the date — no manual changes needed.

• If you use another tool, remember to update your VAT settings before July.

• We recommend that you notify your clients about this change so they can adjust their systems accordingly.

Estonia’s Ministry of Finance has also specified a shortened transition period for contracts signed before May 1st, 2023 without VAT change clauses — the 20% VAT can be applied only until June 30th, 2025.

We’ll keep you updated with any further developments. Meanwhile, if you have questions about how this affects your business, don’t hesitate to reach out to our team.

This VAT change is not isolated — it follows a broader fiscal reform package that Estonia announced earlier. We discussed these updates in detail in a previous article: Estonia’s Tax Changes – Impact on Digital Businesses and How Companio Can Help. Be sure to review it if you want to fully understand the fiscal outlook.