VAT 20% as of July 1

Value added tax will increase from 18% to 20% as of July 1, 2009.

Unfortunately no additional information available in English from government sources.

VAT taxation information at the Estonian Tax and Customs Board: telephone +372 880 0813, e-mail: kaibemaksemta.ee

Real Estate Market Report 2009

Read the report here

new business center

new business center

Report published by Ober-Haus real estate agency and Sorainen law office.

A quote from the report:

More than 100,000 sqm of new office space flooded the Tallinn market in 2008, bringing the total to 250,000 sqm. The total stock of A class and B class office space reached 500,000 sqm by the beginning of 2008. The largest developments of 2008 include the first phase of  Ülemiste City (10,000 already delivered but which plans another 160,000 sqm of office over seven years), Delta Plaza (15,500 sqm delivered) and Tammsaare 49 (22,000 sqm delivered). Due to the downturn in the economy, however, almost all future developments has been postponed.

Swedbank to establish Baltic real estate company

Due to a growing number of confiscated properties in the Baltic States, Swedbank “will become a real-estate company” in the region, the bank’s CEO said, The Swedish Wire writes.

In the trail of the financial crisis in the Baltic States, Swedbank, the region’s largest lender, is likely to end up with large assets in real-estates, confiscated from customers that fail to pay interest.

“We will become a real estate company in these countries within a few years”, said Swedbank’s CEO Michael Wolf in a speech at the political event Almedalen Week on the island of Gotland on Tuesday.

Read more from BBN here

Construction of Bauhaus store begins

Real estate developer Häuser Oberschneider has started the construction of international construction goods retailer Bauhaus’ first store in Estonia in the Lasnamäe borough of Tallinn.

The store in the Tähesaju City, located on the crossing of Mustakivi and Laagna roads, will cover 20 000 square meters, making it the largest construction goods shop in the country, said Paul Oberschneider, the CEO of Häuser-Oberschneider OÜ. 

The construction works are due to be completed by April 2010. The building contract has been signed with construction firm OÜ Fund Ehitus and the estimated investment into the development will be EEK 220 million, which will be covered from internal resources, added Oberschneider.

More than 100 000 articles are sold in the Bauhaus shopping centres for workshops, house and garden. Both private customers and small businesses find a wide assortment of quality products with competitive prices under one roof in all Bauhaus countries. All stores across Europe are based on one concept, with a full lineup of goods and a culture of best quality of service, said Marina Vahtola, general manager of Bauhaus in Finland and Estonia.

The choice of products in the Estonian Bauhaus store will be based on the latest trends in European demand and Bauhaus expects to compete by providing Estonian clients with a positive new choice in goods, services, and customer service, said Bauhaus shopping centre manager Priit Jamnes. 

OÜ Häuser Oberschneider, focused on the development of retail space, has since 1999 developed altogether 90 000 square meters of shopping areas, with the Norde Centrum, Lasnamäe Centrum and Lasnamäe Prisma the best known in Estonia.

Bauhaus, established in 1960, is a privately owned, German network of shopping centres with around 200 branches in 14 European countries: Germany, Austria, Spain, Croatia, Denmark, Sweden, Norway, Switzerland, Turkey, Slovenia, Czech Republic, Hungary and Finland. The next Bauhaus centres will be unveiled in Estonia and Iceland, the closest Bauhaus stores to Estonia are currently in Finland in Espoo and Vantaa. 

Upon completion Tähesaju City will house mainly different interior design, construction goods and home electronics stores on 100 000 square meters.

Economist: raise of VAT rate will deepen recession

The upcoming increase of VAT rate and raise of excise duties on motor fuel will deepen economic recession, not ease it, says economist Viktor Trasberg. Trasberg who teaches economics in Tartu University says that Estonian government is doing the same what IMF did in Latvia. “In Latvia, the extremely incompetent recommendations of IMF to increase consumption taxation and decrease income tax put Latvian economy into a state of coma. It seems that we will do the same in Estonia, but without help from IMF,” he writes in Eesti Päevaleht.

According to him, increasing consumption taxes will push up prices and fuel grey economy. Another downside is that tax burden will be even faster shifting from the affluent middle classes to the poorer population and that the state will be depending only on one type of tax revenues. “Richer people can buy goods from abroad, poorer people are stuck with what they have got. This is likely to increase the wealth gap further.”

Read more from BBN here

Estonia invites Germans to the vacation in nature

The Estonian Tourist Board started the summer campaign in Germany, in the frame of which Estonia is for the first time introduced to the Germans as the destination of nature vacation, Enterprise Estonia announced. The campaign organised in the German big cities Berlin and Hamburg and in their close surrounding up to the middle of July sets the objective to introduce diverse opportunities of the Estonian nature vacation to the Germans and thus increase the visiting of different Estonian districts.

According to Tarmo Mutso, the Director of the Estonian Tourist Board, Estonia has never before advertised itself as the attractive destination of nature vacation at the German market. “The aim of this campaign is to emphasize the attraction of compactness and closeness of Estonia – small country two flight hours away involving many exciting experience contrasts. The visual solution of the campaign focuses on the plumpness and diversity of the Estonian nature and responds slyly to the question where such nature can be experienced, “Mutso said. He added that the essential keyword in the campaign is also the expansion of the target group visiting Estonia, especially with younger Germans – the classic visitor of the Baltic countries from Germany is over 50 years old according to the data of Enterprise Estonia.

The main source of communication of the campaign is Internet, the banners inviting to discover Estonia are visible up to 8 July on the most visited Internet sites of Germany: MSN Advertising, Yahoo!Deutchland, MEINESTADT.de. Also the citizens of Hamburg and Berlin see the posters introducing Estonia in the metro stations of their cities.

The prize packages are drawn on the website of the campaign www.visitestonia.com which include both the flights and accommodations and take the winners from Germany to enjoy nature in Lahemaa and Saaremaa from Tallinn. The prizes will be 4 flight tickets for two and 4 holiday packages from the Estonian cooperation partners. The main partner of the campaign in Estonia is Estonian Air which provides the special offers with lower prices specially for the campaign.

Several tourism operators of Germany participate with the packages introducing the Estonian nature tourism in the campaign which is added to the website of the campaign. “The Germans usually book their vacation mostly through the tourism operators and travel agencies, Internet is used mostly as the information source, ” Mutso explained.

According to the information of Enterprise Estonia the German tourists held the second place among the foreign tourists staying overnight in the Estonian accommodation facilities after the Finnish tourists, by making 6.4% of the foreign tourists. As to the number of nights spent they held the third place after the Finnish and Russian tourists. When summing up the last year 91 915 German tourists stayed overnight in the Estonian accommodation facilities, which is 6% more than in 2007. Most of the German tourists travel to Estonia within the time period from May to September.

The German tourists travel around Estonia more than the tourists originating from other Western European countries. Compared to the latter the Germans also visit more naturally beautiful places – 45% of them hiked or stayed in the nature.

Tallinn Old City motivates the German tourists foremost to choose Estonia their holiday destination – three fourths of the holiday tourists names this as the key factor in the survey. Two thirds named the wish to become acquainted with the culture and history very important. Beautiful nature was the third in importance – this was named as very important by half of the respondents.

The campaign is financed by the European Regional Development Fund in the mediation of the programme of promoting Estonia as the tourism destination of Enterprise Estonia.

Source: Enterprise Estonia

The state separates the transmission network from Eesti Energia

Minister of Economic Affairs and Communications Juhan Parts set up a committee on Friday which will prepare the separation of the transmission network from AS Eesti Energia.
“We have set the objective of taking over the transmission system operator Elering OÜ (with the former name OÜ Põhivõrk) from Eesti Energia 100% to direct state ownership by 2010 at the latest. This should be done in a balanced manner in order to achieve a well-functioning electricity market,” added Parts.
According to Parts, separation of the transmission network must not, however, significantly impair the financial capacity of Eesti Energia for making the expected large investments in electricity production which would ensure the required security of power supply. Also the investment capacity of the transmission network operator has to be ensured.
Parts added that the Estonian electricity market should surely be developed by bearing in mind the roles of both the future transmission system operator and Eesti Energia in the future integrated Baltoscandian market that will be developed.
The National Development Plan of the Energy Sector until 2020 has set the goal of creating preconditions to ensure as much as possible the adequate functioning the electricity market. According to Parts, one of the most important activities for the achievement of this long-term goal is to ensure the full independence of the electricity transmission system operator.
Representatives of the Ministry of Economic Affairs and Communications, Riigikogu, Estonian Competition Authority, Ministry of Finance, Eesti Energia and Elering OÜ belong to the committee. Taavi Veskimägi will be the Chairman of the Committee.
The Committee will present to the Ministry the method and time schedule for the separation of the transmission network by 31 August this year at the latest. After that date the committee will continue the provision of advice to the Minister of Economic Affairs and Communications for the implementation of the separation.
The state has set the objective of separating the transmission network from Eesti Energia by 2010 in the National Development Plan of the Energy Sector. Such separation is required by the directive on the common rules for the internal market in electricity, which has been developed in the framework of the EU Third Energy Package.
The main task of the transmission network is the transmission of electrical energy from producers to large industrial users and distribution networks.

Source: Estonian Ministry of Economic Affairs and Communications

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