Budget, Estonia, Financial Services, Legislation, Markets and Companies, Taxation

International Internet Magazine. Baltic States news & analytics Thursday, 28.03.2024, 16:22

Rising turnover threshold for VAT registration to reduce receipts by EUR 6.6 mln in Estonia

BC, Tallinn, 05.05.2016.Print version
According to Estonian Finance Minister Sven Sester, raising to 40,000 euros the annual turnover threshold beyond which businesses are obliged to register as value added tax (VAT) payers would initially reduce tax receipts by 6.6 million euros, but bigger investments will in the end result in bigger tax receipts, informs LETA/BNS.

"As a result of the change small companies would have to pay about 6.6 million euros less taxes next year which could later be used for investments or hiring employees or raising wages. This means that the state's tax receipts would increase and it would have a positive impact on the economy," Sester told BNS.

 

According to Sester, the government initially decided to raise the threshold to at least 25,000 euros and then look for ways for raising it further, but in the course of state budget talks it became clear that the threshold could be raised to 40,000 euros. He added that the change would make the life of microenterprises easier and would influence about 4 percent of the companies paying VAT.

 

The Estonian government has decided to raise to 40,000 euros the annual turnover threshold beyond which businesses are obliged to register as VAT payers. The turnover threshold had been 16,000 euros until now since 1995.






Search site