The Estonian Tax and Customs Board has announced a revised timeline for mandatory B2B e-invoicing, setting it to 2027. This decision provides businesses and authorities with additional time to adapt to the necessary technological and procedural changes.
By mid-2025, draft legislation to amend the VAT Act and Accounting Act is expected, with public consultations planned to involve stakeholders in the process. The amendments will align with the EU’s “VAT in the Digital Age” initiative, which mandates cross-border e-invoicing by 2030.
Key Reforms
The updated e-invoicing system will require resident businesses in Estonia to declare B2B sales via a new platform. Tax authorities will approve invoices before they reach customers.
In parallel, the Ministry of Finance has proposed eliminating the €1,000 transaction reporting threshold. This change will ensure that all business transactions, regardless of value, are reported. This change is expected to close gaps in tax collection and increase government revenue.
The government also emphasises its broader objective of simplifying administrative burdens for taxpayers, with the centralisation and automation of tax reporting allowing businesses to focus on their core operations, rather than on compliance.
Implementation Timeline
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By July 2025, businesses will be able to register in the commercial registry to receive and request machine-readable e-invoices in formats such as EN16931, UBL – BIS 3.0, and the local eXML 1.2. This will initiate a voluntary phase during which companies can familiarise themselves with the new system and start integrating it into their workflows.
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In 2027: Mandatory e-invoicing and the elimination of the €1,000 reporting threshold will take effect, contributing an estimated €16 million annually to state revenue. This increase in revenue is expected to come from improved VAT collection and decreased tax evasion.
The government plans to implement the EU’s EN 16931 framework for unifying e-invoicing formats, with the aim of reducing complexity and error rates and creating a more integrated system for both the public and private sectors. These reforms modernize Estonia’s tax system, enhance VAT collection, and reduce administrative burdens.
