Estonia, Financial Services, Taxation

Starting from 2020, rules in the VAT system for the taxation of trade between member states will be harmonized and simplified insofar as it concerns call-off stock arrangements, that is a situation where, at the time of the transport of goods to another member state, the supplier already knows the identity of the person acquiring the goods, to whom these goods will be supplied at a later stage and after they have arrived in the member state of destination.

Pursuant to the simplified VAT system, the supplier will not be subject to tax and reporting obligations at the time of transporting call-off stock to another member state. The transaction must be declared and the tax liability fulfilled when the stock is sold to the person acquiring the goods in the destination state.

The taxation of chain transactions, which so far has varied from one member state to another, will also be harmonized. Tax liabilities imposed on businesses will remain unchanged; however, the amendments will allow to prevent double taxation and non-taxation.