Tax rates in Estonia

Income tax
Decrease of the income tax rate:
Until the year 2004 – 26%
Income of the year 2005 – 24%
Income of the year 2006 – 23%
Income of the year 2007 – 22%
Income of the year 2008 – 21% 
Income of the year 2009 – 21%

Period of taxation for natural persons is a calendar year.

In Estonia, annual basic exemption (non-taxable amount) per year is
Income of the year 2000 – 9 600 EEK
Income of the year 2001 – 12 000 EEK
Income of the year 2002 – 12 000 EEK
Income of the year 2003 – 12 000 EEK
Income of the year 2004 – 16 800 EEK
Income of the year 2005 – 20 400 EEK
Income of the year 2006 – 24 000 EEK
Income of the year 2007 – 24 000 EEK
Income of the year 2008 – 27 000 EEK
Income of the year 2009 – 27 000 EEK

The moment of corporate income taxation is shifted until the distribution of profits in Estonia. Period of taxation for legal entities and non-residents with registered permanent establishments in Estonia is one calendar month.

Decrease of the corporate income tax rate in Estonia:
Until the year 2004 – 26/74 of the net amount (equals to 26% of gross profit)
Distribution in the year 2005 – 24/76
Distribution in the year 2006 – 23/77
Distribution in the year 2007 – 22/78
Distribution in the year 2008 – 21/79
Distribution in the year 2009 – 21/79
…of the net amount.

Unemployment insurance premiums
An unemployment insurance premium is withheld at a rate of 0.6% (was 1% until 1 January, 2006) of the gross salary of the employee. In addition to this, employers pay the unemployment insurance premium at a rate of 0.3% (was 0.5% until 1 January, 2006) of the sum of gross salaries monthly.
From 1 July 2009 an unempoloyment insurance premium is withheld at a rate of 1%.
From 1 July 2009, employers pay the unemployment insurance premium at a rate of 0,5%.

 

Funded pension payment 
A funded pension payment is withheld at a rate of 2% of the gross salary of the employee.  

December 2008

Source: Estonian Tax and Customs Board

Estonian Value Added Tax Act

Value Added Tax Act1

Passed 10 December 2003

(RT2 I 2003, 82, 554),

entered into force 1 May 2004,

amended by the following Act:

07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528;

12.10.05 entered into force 18.11.05 – RT I 2005, 57, 451;

09.02.2005 entered into force 01.05.2005 – RT I 2005, 13, 63;

08.12.2004 entered into force 01.01.2005 – RT I 2004, 89, 603;

20.10.2004 entered into force 01.05.2004 – RT I 2004, 75, 523;

12.05.2004 entered into force 27.05.2004 – RT I 2004, 45, 315;

06.05.2004 entered into force 20.05.2004 – RT I 2004, 43, 299;

21.04.2004 entered into force 01.06.2004 – RT I 2004, 41, 278.

 

Chapter 1

General Provisions

 

§ 1. Object of taxation

(1)       The following shall be subject to value added tax:

1)         supply created in Estonia, except supply which is exempt from tax;

2)         import of goods into Estonia (§ 6), except imports exempt from tax (§ 17);

3)         provision of services the place of supply of which is not Estonia (subsection 10 (5)), except supply exempt from tax;

4)         supply of goods or services specified in subsection 16 (3) of this Act if the taxable person has added value added tax to the taxable value of such goods or services;

5)         intra-Community acquisitions of goods (§ 8), except intra-Community acquisitions of good which are exempt from tax (§ 18).

(2)       Value added tax is applied as tax on added value, with the exception of special cases arising from this Act.

 

§ 2. Definitions

(1)       In this Act, terms relating to countries and territories are used as follows:

1)         “Estonia” means the territory under the jurisdiction of the Republic of Estonia;

2)         “European Community” (hereinafter the Community) means the territory comprising the territories of the Member States specified in clause 3) of this subsection;

3)         “Member State” means the territory of a Member State of the Community pursuant to Article 3 (2)-(4) of the Sixth Council Directive 77/388/EEC on the harmonization of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ L 145, 13.06.1977, pp. 1–40) (hereinafter Sixth Directive);

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

4)         “foreign country” means a state or a territory under the jurisdiction thereof, with the exception of Estonia;

5)         “third country” means a state or a territory under the jurisdiction thereof, other than those defined in clause 3) of this subsection as Member States.

(2)       For the purposes of this Act, “business” means the independent economic activity of a person (§ 3), in the course of which goods are transferred or services provided, whatever the purpose or results of that activity. The professional activities of a notary, bailiff and sworn translator are also deemed to be business. Provision of services between a company and its permanent establishment is not deemed to be business. The activities of state, rural municipality and city authorities and legal persons in public law are deemed to be business only where such authorities or persons engage in economic activities listed in Annex D to the Sixth Directive or where their activities involve transactions and acts listed in subsection 1 (1) of this Act which may also be performed by other taxable persons and where non-taxation would lead to significant distortions of competition.

(3)       In this Act, the terms “goods” and “services” are used in the following meaning:

1)         “goods” means things, livestock, gas, electric power, heat and refrigeration. Immovables, as defined in the General Part of the Civil Code Act (RT I 2002, 35, 216; 2003, 13, 64; 78, 523), right of superficies, utility networks and utility works, as defined in the Law of Property Act (RT I 1993, 39, 590; 1999, 44, 509; 2001, 34, 185; 93, 565; 2002, 47, 297; 53, 336; 99, 579; 2003, 13, 64; 17, 95; 78, 523), structures as movables, as defined in the Law of Property Act Implementation Act (RT I 1993, 72/73, 1021; 1999, 44, 510; 2000, 51, 325; 88, 576; 2001, 31, 171; 42, 234; 94, 582; 2002, 47, 297; 53, 336; 99, 579; 2003, 13, 64; 51, 355; 78, 523), and apartment ownership and right of superficies in apartments, as defined in the Apartment Ownership Act (RT I 2000, 92, 601; 2001, 93, 565; 2002, 47, 297; 99, 579), are deemed to be immovables. Data media which are freely available to all purchasers and which carry standard software or standard information intended to perform the same functions are also deemed to be goods;

2)         “goods installed or assembled” are goods which are transferred and installed or assembled by or on behalf of the transferor in another Member State and in the case of which the cost of installation or assembly exceeds 5 per cent of the taxable value of the transaction;

3)         “services” means the provision, in the course of business activities, of benefits or the transfer of rights, including securities, which are not goods according to clause 1) of this subsection, and obligations to refrain from economic activity, to waive the exercise of a right or to tolerate a situation for a charge. Software and information transmitted by electronic means, and data media carrying software or information which are especially compiled or adjusted according to the purchaser’s specifications are also services.

(4)       For the purposes of this Act, the following are electronically supplied services:

1)         website supply;

2)         web-hosting;

3)         distance maintenance of programmes and equipment;

4)         transfer and updating of software transmitted by electronic means;

5)         images, text and information transmitted by electronic means, and making electronic databases available;

6)         music, films and games, including gambling games, transmitted by electronic means;

7)         political, cultural, sporting, scientific and entertainment broadcasts transmitted by electronic means;

8)         distance education and other services similar to the services specified above.

Where the provider of a service and the recipient of the service communicate using electronic means, this shall not of itself meant that the service is deemed to be an electronically supplied service.

(5)       “Transfer” means the transfer of possession of goods together with the risk of accidental loss of the goods and the right to dispose of the goods and enjoy the economic benefits related to the goods as owner, regardless of the status of the goods in property law. For the purposes of this Act, “transfer” also means the transfer of goods pursuant to a commission contract and the handing over of goods pursuant to a transaction which provides that ownership of the goods is to pass to the contractual user of the goods upon termination of the contract.

(6)       “Self-supply” means the provision of goods or services by a taxable person to an employee, a servant or a member of the management or control body of the person or the use of services or goods forming part of the business assets by a taxable person or an employee, a servant or a member of the management or control body of the person for purposes other than business. The use of goods in the abovementioned cases shall be deemed to be self-supply if the taxable person has deducted the input value added tax on the goods from the value added tax payable by the person.

(7)       For the purposes of this Act, “new means of transport” means:

1)         a vessel exceeding 7.5 metres in length which is transferred within three months as of the date of first entry into service or which has sailed for less than 100 hours, with the exception of sea-going vessels specified in clause 15 (3) 3) of this Act;

2)         aircraft the take-off weight of which exceeds 1550 kilograms which is transferred within three months as of the date of first entry into service or which has flown for less than 40 hours, with the exception of aircraft specified in clause 15 (3) 4) of this Act;

3)         a motorised land vehicle the capacity of which exceeds 48 cubic centimetres or the power of which exceeds 7.2 kilowatts and which is transferred within six months as of the date of first entry into service or which has travelled less than 6000 kilometres;

(8)       “Triangular transaction” means a transaction for the transfer of goods which involves taxable persons from three different Member States and meets all of the following criteria:

1)         a taxable person established in Member State A (hereinafter the transferor in the triangular transaction) transfers a good to a taxable person established in Member State B (hereinafter the reseller in the triangular transaction) which then in turn transfers it on to a taxable person established in Member State C (hereinafter the acquirer in the triangular transaction);

2)         the goods in question are transported directly from Member State A to Member State C to the acquirer in the triangular transaction;

3)         the reseller in the triangular transaction is not registered in Member State C as a taxable person or a taxable person with limited liability;

4)         the acquirer in the triangular transaction pays value added tax on the acquisition of goods by the triangular transaction.

(9)       “Distance selling” means the transfer and delivery of goods, other than a new means of transport or goods installed or assembled, by or on behalf of the transferor to another Member State to a person who is not registered in that Member State as a taxable person or a taxable person with limited liability.

(10)     For the purposes of this Act, “investment gold” means gold, in the form of a bar or a wafer, of a purity equal to or greater than 995 thousandths, and gold coins which are minted after 1800, are or have been legal tender, are of a purity equal to or greater than 900 thousandths and are not sold for numismatic interest.

(11)     “Intermediation” means the activity of a taxable person in the name and for the account of another person. At least the following requirements must be met for acting in the name and for the account of another person:

1)         the intermediary and the transferor or acquirer of the goods or the provider or recipient of the service have concluded a contract for the intermediation of the goods or services;

2)         the transferor of the goods or provider of the service is liable for the transfer of the goods or provision of the service;

3)         the goods are transferred or the service is provided at a price established or approved by the transferor of the goods or provider of the service under the terms and conditions established thereby for the recipient of the goods or service;

4)         only the commission fee shall be shown in the accounts of the intermediary as supply of the intermediary;

5)         if the recipient of the goods or service is entitled to an invoice, such invoice shall be issued by the transferor of the goods or provider of the service or another person, including the intermediary, in the name of the transferor of the goods or provider of the service.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

 

§ 3. Taxable person and tax liability

(1)       A person liable to value added tax (hereinafter taxable person) is a person, including a legal person in public law or a state, rural municipality or city authority (hereinafter person), who is engaged in business and is registered or required to register as a taxable person (§ 19). A person is a natural person or a legal person, including a legal person in public law or a state, rural municipality or city authority. A taxable person of a foreign state or another Member State is a person, including a pool of assets or association of persons without the status of legal person, treated as a person liable to value added tax according to the legislation of the state in question.

(2)       A person liable to value added tax with limited liability (hereinafter taxable person with limited liability) is a person, except a natural person not engaged in business, who is registered or required to register as a taxable person with limited liability (§ 21). A taxable person with limited liability of another Member State is a person, including a pool of assets or association of persons without the status of legal person, who is registered for value added tax in that Member State and whose tax liabilities correspond to the tax liabilities of a taxable person with limited liability.

(3)       A taxable person or taxable person with limited liability shall pay value added tax as of the date of registration as a taxable person or taxable person with limited liability.

(4)       A taxable person shall calculate value added tax on the transactions and acts specified in subsection 1 (1) of this Act and, in the case of supply specified in clause 1 (1) 1) of this Act, the taxable person shall pay value added tax on the following:

1)         supply subject to taxation (hereinafter taxable supply);

2)         the services listed in subsection 10 (2) of this Act received from a foreign person engaged in business who is not registered as a taxable person in Estonia;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

3)         the acquisition of goods to be installed or assembled in Estonia from a person of another Member State engaged in business who is not registered as a taxable person in Estonia.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

4)         the acquisition of goods as the acquirer in a triangular transaction;

5)         the acquisition of goods or receipt of services not listed in clauses 2)-4) of this section from a foreign person engaged in business who is not registered as a taxable person in Estonia and who has no permanent business establishment in Estonia through which the person engages in business in Estonia.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

(5)       A taxable person with limited liability shall pay value added tax on acts specified in clauses 1 (1) 2) and 5) of this Act and acts listed in clauses (4) 2)-5) of this section.

(6)       The following shall also pay value added tax:

1)         a debtor within the meaning of the Community Customs Code (Council Regulation (EEC) No 2913/92);

2)         a person not registered as a taxable person, on transactions concerning which the person has issued an invoice or other sales document in which the amount of value added tax is indicated;

3)         a person not registered as a taxable person or taxable person with limited liability, except the persons specified in subsections 39 (1) or (2) of this Act who acquires a new means of transport from another Member State;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

4)         a person not registered as a taxable person or taxable person with limited liability who acquires excise goods within the meaning of the Alcohol, Tobacco and Fuel Excise Duty Act (RT I 2003, 2, 17; 48, 345) from another Member State, except for a natural person who acquires excise goods for personal use.

5)         the owner of the goods upon the termination thereby of the tax warehousing (§ 441) of the goods without transfer of the goods.  This provision does not apply in cases where a person was the owner of the goods already at the time the goods were placed in the tax warehouse, except if the goods were stored at a tax warehouse following the import or intra-Community acquisition of the goods, and the goods were not transferred during the time they were stored at the tax warehouse.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

 

Chapter 2

Taxable Transactions and Acts

 

§ 4. Supply

(1)       The following are supply:

1)         the transfer of goods and provision of services in the course of business activities;

2)         self-supply of goods or services;

3)         the transport of goods to another Member State, without transferring them, for them to be used for business purposes there (clause 7 (1) 3)).

(2)       The following are not deemed to be supply:

1)         the transfer of an enterprise or a part thereof within the meaning of the Law of Obligations Act (RT I 2001, 81, 487; 2002, 60, 374; 2003, 78, 523), if the enterprise or part thereof is only used for the purposes of taxable supply;

2)         the owner taking goods out of Estonia without transferring them, except in the case specified in clause (1) 3) of this section;

3)         granting use of state assets without charge within the meaning of the State Assets Act (RT I 1995, 22, 327; 1996, 36, 738; 40, 773; 48, 942; 81, 1446; 1997, 45, 724; 1998, 30, 409; 1999, 10, 155; 16, 271; 2000, 39, 239; 49, 306; 51, 319; 2001, 7, 17; 93, 565; 2002, 53, 336; 64, 393; 2003, 13, 69) and privatisation of state, rural municipality or city assets;

4)         handing over the assets of a company, non-profit association or foundation to another company, non-profit association or foundation upon the merger, division or transformation of the company, non-profit association or foundation;

5)         transactions between persons registered as a single taxable person, where the person who acquired goods or services as a result of the transaction uses the goods or services entirely for the purposes of the person’s taxable supply;

6)         handing over, in business interests, goods free of charge as product samples not for sale or handing over goods the value of which does not exceed 150 kroons for advertising purposes;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

7)         the provision of services relating to the exchange or repair of goods to the third country manufacturer of the goods or the third country seller of the goods during the warranty period.

 

§ 5. Export of goods

(1)       The export of goods means the following:

1)         the transfer of Community goods by the transferor of the goods or foreign acquirer of the goods with transport of the goods to a destination outside the customs territory of the Community;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

2)         the re-export of non-Community goods placed under the temporary importation procedure with partial relief from import duties from the Community customs territory under the customs-approved treatment of re-exportation;

3)         the re-export from the Community customs territory of non-Community goods placed under the inward processing procedure applying the suspension system or the procedure for processing under customs control, or the delivery of non-Community goods as take-away supplies or consumption supplies on board a vessel or aircraft bound for a third country under the customs-approved treatment of re-exportation;

4)         the transfer of goods exported from the Community customs territory under the outward processing procedure and the discharge of the procedure for the goods;

5)         the transfer of goods by the transferor of the goods or foreign acquirer of the goods to a third country which belongs to the customs territory of the Community;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

(2)       The transfer of goods to a third country natural person for transportation to the third country in baggage with which the person is travelling may also be treated as the export of goods, if all of the following criteria are met:

1)         the natural person is resident in the third country;

2)         the sales price of the goods in the packaging transferred to the person by the same taxable person at the same point of sale on the same date, together with value added tax, exceeds 2500 kroons;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

3)         the purchaser takes the goods in unopened packaging out of the Community not later than by the end of the third month following the transfer of the goods;

4)         the taxable person has a document with customs confirmation certifying that the purchaser has taken the goods out of the Community.

(3)       The procedure for treating goods transferred to third country natural persons as exports shall be established by a regulation of the Minister of Finance.

(4)       The transfer of goods to a traveller bound for a third country at sales facilities located in the customs control zone of an international airport open for passenger traffic is also treated as the export of goods.

(5)       The export of goods is certified by the documents in proof of taking the goods out of the Community and transfer of the goods. The tax authority has the right to request additional documents in proof of the export of goods.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

(6)       The procedure for treating goods transferred at sales facilities located in the customs control zone of an international airport open for passenger traffic as exports shall be established by a regulation of the Minister of Finance.

 

§ 6. Import of goods

(1)       The import of goods means the following:

1)         the placing of non-Community goods under the customs procedure of release for free circulation, the temporary importation procedure with partial relief from import duties, the inward processing procedure applying the drawback system or the procedure for processing under customs control;

2)         the placing of goods covered by the outward processing procedure under the customs procedure of release for free circulation;

3)         other cases which result in a customs debt within the meaning of the Community Customs Code;

(2)       The placing of non-Community goods under the customs procedure of release for free circulation is not deemed to be import if it:

1)         was preceded by the placing of the goods under the temporary importation procedure with partial relief from import duties;

2)         is directly followed by the transport of the goods to a third country which is a part of the customs territory of the Community, and the goods are to remain under customs supervision until they are carried out of Estonia.

(3)       The goods are deemed to be imported in Estonia if the goods are placed under the customs procedures specified in subsection (1) of this section in Estonia.

(4)       The transport of goods which have been assigned customs status as being European Community goods from a third country to Estonia is also deemed to be import of goods in Estonia.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

 

§ 7. Intra-Community supply of goods

(1)       Intra-Community supply of goods means the following:

1)         the transfer of goods to a taxable person or taxable person with limited liability of another Member State together with the transport of the goods from Estonia to the other Member State, except in the cases specified in subsection (2) of this section;

2)         the transfer of excise goods or a new means of transport to a person of another Member State together with the transport of the goods or means of transport from Estonia to the other Member State;

3)         the transport of goods from Estonia to another Member State for them to be used for business purposes there, including the transfer of goods between a company and its permanent establishment located in another Member State, except in the cases specified in subsection (2) of this section.

(2)       The following are not deemed to be intra-Community supply of goods:

1)         temporary transport of goods from Estonia to another Member State for the provision of services there, including the transport of a movable to another Member State for hiring or leasing of the movable or establishment of a usufruct on the movable;

2)         temporary transport of goods from Estonia to another Member State for up to twenty-four months for purposes which comply with the purposes of applying the temporary importation procedure with total relief from import duties;

3)         the transport of movables from Estonia to another Member State for the purposes of them to be used in work, including for repair, evaluation, processing or installation (hereinafter work with movable) if, after the provision of the service, the movable is returned to the taxable person in Estonia who transported the movable to the other Member State;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

4)         the transfer of goods to be installed or assembled in another Member State;

5)         distance selling of goods from Estonia to another Member State;

6)         delivery of goods to a vessel or aircraft specified in clauses 15 (3) 3) or 4) of this Act to be consumed or sold on board;

7)         the transport of goods from Estonia to another Member State for the purpose of taking them out of the Community if the goods are placed under the customs procedure of export in Estonia and the goods are taken out of the Community within two months after the goods were conveyed to the other Member State;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

8)         the transfer of goods to the acquirer in a triangular transaction;

9)         the conveyance of natural gas and electricity transmitted via network from Estonia to another Member State;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

10)       the transport of goods from Estonia to another Member State if the goods are transported to Estonia temporarily for up to twenty four months for a purpose which complies with the purposes of applying the temporary importation procedure with total relief from import duties;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

11)       the transport of movables from Estonia to another Member State if the movables are transported to Estonia temporarily for the purpose of work with the movables.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

(3)       Where the grounds for a transaction or act specified in subsection (2) of this section cease to exist, the transaction shall be deemed to constitute an intra-Community supply of goods in accordance with subsection (1) of this section and the intra-Community supply of goods shall be deemed to have been created on the date on which the grounds ceased to exist.

(4)       An intra-Community supply of goods shall be certified by documents certifying the transfer of the goods and the transport of the goods to another Member State.

 

§ 8. Intra-Community acquisition of goods

(1)       Intra-Community acquisition of goods is the acquisition of goods from a taxable person of another Member State together with the transportation of these goods from the other Member State to Estonia and the acquisition of a new means of transport from a taxable person of another Member State together with the transportation of that means of transport from the other Member State to Estonia, except in the cases specified in subsection (3) of this section.

(2)       Intra-Community acquisition of goods also includes the transport of goods used for business purposes from another Member State to Estonia for the purpose of business being carried out in Estonia, except in the cases specified in subsection (3) of this section.

(3)       The following are not deemed to be intra-Community acquisition of goods:

1)         temporary transport of goods to Estonia for the provision of services, including the transport of a movable to Estonia for it to be hired or leased;

2)         temporary transport of goods to Estonia for up to twenty-four months for purposes which comply with the purposes of applying the temporary importation procedure with total relief from import duties;

3)         temporary transport of movables to Estonia for the purpose of work with the movables if the movables are transported to Estonia for the purposes of taking the movables out of the Community;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

4)         the acquisition of goods installed or assembled in Estonia from a taxable person of another Member State;

5)         the transport of goods to Estonia for distance selling;

6)         the acquisition of goods, except a new means of transport, by a natural person for personal use;

7)         the acquisition of goods from a person not registered as a taxable person for a total amount not exceeding the threshold specified in subsection 21 (2) of this Act;

8)         the acquisition of second-hand goods, original works of art, collectors’ items or antiques from a taxable person of another Member State who applies the procedure for the calculation of taxable value provided for in § 41 of this Act when calculating the tax liabilities of that person in the other Member State;

9)         the acquisition of goods by the acquirer in a triangular transaction.

10)       the transport of natural gas and electricity transmitted via a network from another Member State to Estonia;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

11)       the transport of goods from another Member State to Estonia for the purpose of taking them out of the Community if the goods are placed under the customs procedure of export in the other Member State and the goods are taken out of the Community within two months after the goods were conveyed to Estonia;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

12)       the transport of goods to Estonia if the goods are transported to another Member State temporarily for up to twenty four months for a purpose which complies with the purposes of applying the temporary importation procedure with total relief from import duties;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

13)       the transport of movables from another Member State to Estonia if the movables are transported to Estonia temporarily for the purposes of work with the movables.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

(4)       Where the grounds for an act specified in subsection (3) of this section cease to exist, the act shall be deemed to constitute intra-Community acquisition of goods in accordance with subsection (1) of this section and the intra-Community acquisition of goods shall be deemed to have been effected on the date on which those grounds ceased to exist.

(5)       Intra-Community acquisition of goods also includes the acquisition of goods from a taxable person of another Member State if the taxable person uses its number of registration as a taxable person in Estonia when acquiring the goods and if the goods are transported from the Member State of the transferor to another Member State, unless the taxable person proves that:

1)         value added tax on the intra-Community acquisition of goods will be paid in the Member State to which the goods are transported, or

2)         the taxable person was the reseller in a triangular transaction.

 

Chapter 3

General Principles of Taxation

 

§ 9. Place of supply of goods

(1)       The place of supply of goods is Estonia if:

1)         the goods are transported or made available to the recipient in Estonia, are exported from Estonia or if intra-Community supply of goods is effected or distance selling takes place from Estonia to a person of another Member State who is not a taxable person or taxable person with limited liability of the other Member State, except in the case specified in subsection (2) of this section;

2)         a person of another Member State engaged in business who is registered as a taxable person in Estonia engages in distance selling to a person of Estonia who is not a taxable person or a taxable person with limited liability;

3)         a person of another Member State engaged in business transfers goods to be installed or assembled, and installs or assembles them in Estonia or such goods are installed or assembled in Estonia on the person’s behalf;

4)         the goods, including goods consumed or sold on board, are transferred on board a vessel or aircraft departing on an international route from Estonia.

5)         natural gas or electricity is transferred via a network to an Estonian taxable person located in Estonia;

6)         natural gas or electricity transmitted via a network is transferred to the acquirer of the goods who will use the goods in Estonia. If the acquirer of the goods does not use all or a part of the goods, the unused goods are still deemed to be goods used in Estonia if the acquirer of the goods has a seat or permanent business establishment in Estonia for which the goods were transferred. This provision does not apply in the case specified in clause 5) of this section.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

(2)       The place of supply of goods is not Estonia if the taxable person:

1)         is registered as a taxable person in another Member State and is engaged in distance selling to a person of that other Member State who is not a taxable person or taxable person with limited liability of another Member State;

2)         transfers goods and installs or assembles the goods in another Member State.

3)         transfers natural gas or electricity transmitted via a network to a reseller or another person of another Member State who will not use the goods in Estonia.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

(3)       For the purposes of clause (1) 5) and (2) 3) of this section, “reseller” means a person engaged in business who generally transfers the natural gas or electricity acquired thereby and uses such goods for own purposes only to an insignificant extent.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

 

§ 10. Place of supply of services

(1)       The place of supply of services is Estonia if:

1)         the services are connected with an immovable located in Estonia, including construction, valuation or maintenance, or services for the transfer of the immovable, for preparing or co-ordinating construction works, and accommodation services;

2)         cultural, artistic, sporting, educational, scientific or entertainment services, including the organisation of related events, are provided in Estonia;

3)         work is performed with movables located in Estonia, except in the case specified in clause (5) 8) of this section;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

4)         transport services are carried out in Estonia, including the carriage of means of transport related to the carriage of goods, the carriage of passengers, including their personal luggage and personal means of transport, or such carriage of goods or passengers is organised. This provision does not apply to the cases provided in clause 5) of this subsection, clauses (2) 12) and 13) and clause (5) 5) of this section;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

5)         transport services for goods from Estonia to another Member State, services for the organisation of such transport of goods or ancillary services related to such transport of goods are provided to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

6)         ancillary services related to transport of goods are provided in Estonia, except for the ancillary services related to transport services specified in clause 5) of this subsection and clauses (2) 12) and 13) of this section;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

7)         a transaction or other act the place of supply is Estonia is mediated and the intermediation service is provided to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States.

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

(2)       The place of supply of services is Estonia if the following services are provided to a taxable person or taxable person with limited liability registered in Estonia:

1)         grant of the use of intellectual property or transfer of the right to use intellectual property;

2)         advertising services;

3)         services of consultants, accountants, lawyers, auditors and engineers, and translation services, as well as data processing and the supplying of information;

4)         financial services, except for leasing safes, or insurance services, including reinsurance and insurance intermediation services;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

5)         allowing use of manpower;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

6)         the hiring or leasing of or establishment of a usufruct on movables, except means of transport;

7)         electronic communications services, including assignment of rights to use transmission lines;

8)         (Repealed – 07.110,96 entered into force 01.01.06 – RT I 2005, 68, 528)

9)         electronically supplied services;

10)       intermediation;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

11)       work with movable located in another Member State if after the provision of the service, the movable is taken out of that Member State;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

12)       transport services for goods from one Member State to another, including the carriage of goods to or from Estonia, services for the organisation of such transport of goods and ancillary services related to such transport of goods;

13)       transport services for goods provided within Estonia if they are part of carriage operations which begin or end in another Member State, services for the organisation of such transport of goods and ancillary services related to such transport of goods;

(20.10.2004 entered into force 01.05.2004 – RT I 2004, 75, 523)

14)       allowing access to natural gas and electricity network connections, or transmission of natural gas or electricity through networks and services directly related thereto;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

15)       refraining from receipt of the services specified in clauses 1)-10), 14) and 16) of this subsection, waiving the exercise of a right or tolerating a situation for a charge;

(07.12.05 entered into force 01.01.06 – RT I 2005, 68, 528)

16)       transfer of permitted limit values of emissions of greenhouse gases regulated by the Ambient Air Protection Act.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(3)       The place of supply of services is Estonia also if a third country taxable person who is not registered as a taxable person in any of the Member States provides electronic communications services or electronically supplied services to a natural person of Estonia for personal use.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(4)       In the case of services not specified in subsections (1), (2) and (5) of this section and the hiring or leasing of or establishment of a usufruct on a means of transport, the place of supply of the services is Estonia if the services are provided through a seat or permanent establishment located in Estonia.

(5)       The place of supply of services is not Estonia if a taxable person provides the following services:

1)         services connected with an immovable located in a foreign country, including construction, valuation or maintenance, or services for the transfer of the immovable, for preparing or co-ordinating construction works, and accommodation services;

2)         cultural, artistic, sporting, educational, scientific or entertainment services provided abroad, including the organisation of related events;

3)         work with movables located in Estonia, except in the case specified in clause (2) 11) of this section;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

4)         transport services for goods provided outside Estonia, including carriage of means of transport related to the carriage of goods and organising such carriage, ancillary services related to such carriage of goods, carriage of passengers provided outside Estonia, including carriage of personal luggage and personal means of transport of passengers, and organising such carriage. The provision does not apply to the carriage of goods from one Member State to another, to organising such carriage or to ancillary services related to such carriage;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

5)         transport services for goods from another Member State to Estonia or from one Member State to another outside Estonia, services for the organisation of such transport of goods, if the services are provided to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

6)         (Repealed – 07.12.2005 entered into force 01.01.06 – RT I 2005, 68, 528)

7)         a service specified in clauses (2) 1)-10) and 12)-16) of this section provided to a taxable person or taxable person with limited liability of another Member State, or a service specified in clauses (2) 1)-9) or 14)-16) of this section and intermediation of such services to third country persons.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

8)         work with movables located in Estonia if after the provision of the service, the movable is taken out of Estonia and the service is provided to a taxable person or taxable person with limited liability of another member State;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

9)         intermediation of a transaction or act to a person who is not registered as a taxable person or taxable person with limited liability in any of the Member States if the place of supply of the transaction or act being mediated is not Estonia.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(6)       For the purposes of this section, “means of transport” means a vehicle, aircraft, vessel or other means of transport with a code in the Combined Nomenclature established by Council Regulation (EEC) No 2658/87 (hereinafter CN-code) beginning with the numbers 86, 87, 88 or 89.

(7)       Ancillary transport services include the loading, unloading, handling and warehousing of goods within the framework of carriage, as well as insurance, the preparation and obtaining of documents relating to goods and the completion of customs formalities.

(20.10.2004 entered into force 01.05.2004 – RT I 2004, 75, 523)

 

§ 11. Time of supply, import of goods, receipt of services and intra-Community acquisition of goods

(1)       The time of supply or the time of receipt of services is deemed to be the date on which the first of one of the following acts is performed:

1)         the goods are dispatched or made available to the purchaser, or the services are provided;

2)         full or partial payment is received for the goods or services or, in the case of the receipt of services, full or partial payment is made;

3)         in the case of self-supply, the goods or services are provided by a taxable person to an employee, a servant or a member of the management or control body of the person and the services are used or the goods forming part of the business assets are put into service by a taxable person or an employee, servant or a member of the management or control body of the person for purposes other than business.

(2)       Intra-Community supply is created or intra-Community acquisition of goods is effected on the fifteenth day of the month following the month in which the goods obtained by intra-Community acquisition of goods are dispatched or made available or on the date on which an invoice is issued for the goods if the invoice is issued prior to the fifteenth day of the month following the month in which the goods are dispatched or made available to the purchaser, except in the cases specified in subsections 7 (3) and 8 (4) of this Act.

(3)       If, according to subsection (1) of this section, the time of supply is the time at which full or partial payment is received or made for the goods or services, supply is deemed to have been effected in the amount of the payment. Receipt of a grant for the transfer of goods or services for a price lower than their usual value shall not be considered as receipt of payment for the goods or services.

(4)       If the provision of services continues for longer than a period of taxation, the services are deemed to have been provided and received during the taxable period in which the provision of the services terminates. In the case of regular provision of services or regular transfers of goods to the same purchaser, the time at which the goods are dispatched or made available to the purchaser or the time at which the services are provided and received is deemed to be the taxable period overlapping with the end of the period of time for which an invoice is submitted or during which payment for goods or services received is to be made as agreed.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(5)       If any of the acts specified in subsection (1) of this section are performed before the obligations of a taxable person (§ 24) arise, the taxable person is required to calculate value added tax on the taxable value of the transaction only if the goods are dispatched or made available to the purchaser or the services are provided during the period in which such obligations apply to the taxable person.

(6)       Upon the import of goods, the time of supply is, in the cases specified in clauses 6 (1) 1) and 2) of this Act, the date of release of the goods within the meaning of the Community Customs Code or, in the cases specified in clause 6 (1) 3), the date on which the customs debt is incurred or, in the case specified in subsection 6 (4), the date on which the goods are transported to Estonia.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(7)       The supply of returnable packaging on which a deposit has been established pursuant to the Packaging Act which is not included in the taxable value of the goods and which is not returned to the producer who is a taxable person within a calendar year is deemed to be effected on 31 December. The supply shall be equal to the sum total of the deposits of returnable packages not returned during a calendar year.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

 

§ 12. Taxable value of supply, intra-Community acquisition of goods and services received

(1)       The taxable value of goods or the taxable value of the intra-Community acquisition of goods and services received is comprised of the sales price of the goods or services and other amounts which the purchaser of the goods, the recipient of the services or a third party is to pay to the seller of the goods or the provider of the services for the goods acquired or services received. This provision does not apply to cases specified in subsections (3)–(7) and (10)–(13) of this section. Interest payable upon the transfer of goods is not included in the taxable value of the goods. Value added tax payable in Estonia or a foreign country is also not included in the taxable value of the goods.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(2)       Grants allocated to a taxable person for the transfer of goods or services for a price lower than their usual value shall be included in the taxable value. The procedure for including grants in taxable value and for the taxation thereof shall be established by a regulation of the Minister of Finance.

(3)       In the case of the transfer of goods without charge or the transport of goods to another Member State which is deemed to be intra-Community supply, the taxable value shall be the purchase price of the goods or, in the absence thereof, the cost price or usual value of the goods if this is lower than the purchase price or cost price.

(31)      In the case of intra-Community acquisition of goods, the taxable value shall be the purchase price or the cost price of the good, or the usual value of the goods if this is lower than the purchase price or cost price

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(4)       In the case of the transfer of goods for a price lower than their usual value, the taxable value shall be the sales price of the goods and other amounts which the purchaser of the goods or a third party is to pay to the seller of the goods for the goods acquired. Where the sales price mentioned above together with the other amounts is lower than the purchase price of the goods or, in the absence thereof, the cost price, the taxable value of the goods shall be the purchase price of the goods or, in the absence thereof, the cost price. In the case of the transfer of goods for a price lower than their usual value and where the usual value of the goods is lower than the purchase price of the goods or, in the absence thereof, the cost price, the taxable value of the goods shall be the usual value of the goods.

(5)       In the case of the provision of services for a price lower than their usual value, the taxable value shall be the sales price of the services and other amounts which the recipient of the services or a third party is to pay to the provider of the services for the services received. Where the sales price together with the other amounts is less than the purchase price of the services or, in the absence thereof, the cost price excluding value added tax, the taxable value of the services shall be the purchase price of the services or, in the absence thereof, the cost price. In the case of the provision of services for a price lower than their usual value and where the usual value of the services is lower than the purchase price of the services or, in the absence thereof, the cost price, the taxable value of the services shall be the usual value of the services.

(6)       In the case of self-supply, the taxable value shall be the purchase price or, in the absence thereof, the cost price of the goods or the cost price of the services, except in the case specified in subsection (7) of this section.

(7)       Where the use of an automobile of the employer free of charge or at a preferential price for activities not related to employment or service duties or to the employer’s business constitutes self-supply, the taxable value of such supply is the price of the fringe benefit calculated pursuant to subsection 48 (8) of the Income Tax Act with value added tax.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(8)       Taxable value shall not include price discounts allowed to the customer if such discounts are applied for commercial purposes at the time of selling the goods or providing the services.

(9)       Taxable value shall not include the amounts received from the purchaser of goods or the recipient of services as repayment for expenses incurred in the name and for the account of the purchaser or recipient which are entered in the books in a suspense account. Proof of the actual amount of this expenditure must be furnished. A taxable person shall not deduct the input value added tax included in the expenses paid out in the name and for the account of the purchaser of goods or the recipient of services.

(10)     The taxable value of a factoring service shall be the contract fee and the fee for handling the accounts.

(11)     The value of returnable packaging specified in subsection 11 (7) of this Act is not included in the taxable value of goods if the producer who is a taxable person does not transfer the returnable packaging.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(12)     Deposits established on packaging pursuant to the packaging Act is not included in the taxable value of goods.

(21.04.2004 entered into force 01.06.2004 – RT I 2004, 41, 278)

(13)     In the case of termination of the tax warehousing of goods without transfer of the goods, the taxable value shall be the purchase price or the cost price of the goods, or the usual value of the goods if this is lower than the purchase price or cost price. Only in justified cases, the taxable value of goods may be lower than the value of the goods entered in the warehouse stock at the time of placing such goods in the tax warehouse.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

 

§ 13. Taxable value of imported goods

(1)       The taxable value of imported goods, except in the cases specified in subsections (3)-(6) of this section, is comprised of the customs value of the goods according to the Community Customs Code and all duties payable upon import (hereinafter import duties), as well as other costs related to the carriage of the goods to destination, such as commission, packing, transportation and insurance costs which have not been included in the customs value, up to the first place of destination in the territory of Estonia

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(2)       The first place of destination in the territory of Estonia is the place indicated on the accompanying documents or other documents on the basis of which the goods are imported. If this is not indicated, the first place at which the goods are loaded in the territory of Estonia is deemed to be the first place of destination. The other costs specified in subsection (1) of this section shall also be included in the taxable value if the costs arise from transportation of the goods to another place of destination within the territory of the Community territory and if that place is known at the time supply is effected.

(3)       If a traveller imports goods in excess of the duty-free cost limit, the taxable value of the imported goods is comprised of the purchase price of the goods and all import duties. The traveller shall prove the purchase price on the basis of the payment documents. If such documents are missing or the customs authorities have reason to believe that the declared value does not correspond to the price actually paid, the customs authorities shall determine the customs value using other customs valuation methods specified in the Community Customs Code.

(4)       If goods conveyed into the customs territory are imported after being assigned a different customs-approved treatment or use, the taxable value of the imported goods shall not be less than the taxable value of the imported goods had the goods been imported directly after having been conveyed into the customs territory. If a lower taxable value is declared upon import of the goods after being assigned a different customs-approved treatment or use, the customs authorities shall determine the customs value of the goods using the customs valuation methods specified in Articles 30 and 31 of the Community Customs Code.

(5)       In the case of the import of goods covered by the outward processing procedure, the taxable value is comprised of the value added during such processing and the loading, packing, transportation and insurance costs added to the price of the goods, including all import duties. Under the standard exchange system, the taxable value of the replacement product shall be determined pursuant to the provisions of subsection (1) of this section and it shall not be less than the taxable value of the exported goods.

(6)       Where goods are transported into Estonia from a third country which is part of the Community customs territory (subsection 6 (4)), the taxable value of the goods shall be determined pursuant to the provisions of § 12 of this Act.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(7)       The tax established by this Act is not included in the taxable value of imported goods.

 

§ 14. Taxable value of exported goods

(1)       In the case of export, the taxable value of the goods shall be determined pursuant to the provisions of § 12 of this Act but, in the case of the transfer of goods for a price higher than their usual value, the usual value of the goods is deemed to be the taxable value of the goods.

(2)       Upon the re-export of goods brought to Estonia under the inward processing procedure applying the suspension system, the taxable value shall not include the value of the goods imported for processing, and upon prior export the taxable value of compensating products produced from equivalent goods shall be determined pursuant to the provisions of § 12 of this Act.

 

§ 15. Value added tax rates

(1)       The rate of value added tax shall be 18 per cent of the taxable value, except in the cases provided for in subsections (2)-(4) of this section.

(2)       The rate of value added tax on the following goods and services shall be 5 per cent of the taxable value:

1)         books and work exercise-books used as learning materials, excluding learning materials specified in clause 16 (1) 6) of this Act;

(07.12.2005 entered into force 01.01.07 – RT I 2005, 68, 528)

2)         medicinal products, contraceptive preparations, sanitary and toiletry products, and medical equipment or medical devices intended for the personal use of disabled persons within the meaning of the Social Welfare Act and specified in the list established by a regulation of the Minister of Social Affairs, and the grant of the use of such medical devices to disabled persons;

(07.12.2005 entered into force 01.01.07 – RT I 2005, 68, 528)

3)         chemical pest control agents (biocides) registered with the Chemicals Notification Centre, specified in the list established by a regulation of the Minister of Social Affairs, if the purchaser is a social welfare institution or health care provider;

(12.05.2004 entered into force 27.05.2004 – RT I 2004, 45, 315)

4)         handling of hazardous waste;

5)         funeral items and services;

6)         organisation of performances or concerts by a state, municipal or private performing arts institution or the national opera on the condition that the funds received by the organiser of the performance or concert from the state, rural municipality or city budget or the Cultural Endowment of Estonia amount to at least 10 per cent of its budget revenue for the calendar year;

7)         heat sold to natural persons for personal use, heat sold to housing associations, apartment associations, churches, congregations, persons who own hospitals, and legal persons or bodies financed from the state budget or a rural municipality or city budget for own use, and peat, fuel briquettes, coal or firewood sold to natural persons for personal use;

8)         accommodation services or accommodation services with breakfast, excluding any goods or services accompanying such services;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

9)         periodic publications, excluding publications mainly containing advertisements or personal announcements, or publications the content of which is mainly erotic or pornographic.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(3)       The rate of value added tax on the following goods shall be 0 per cent of the taxable value:

1)         exported goods, excluding cases where the supply of such goods is exempt from tax pursuant to § 16 of this Act;

2)         goods where their transfer and transport to another Member State or transport to another Member State without transfer is deemed to be intra-Community supply of goods. This provision does not apply in cases where the supply of goods is exempt from tax pursuant to § 16 of this Act or the acquirer of the goods, except for new means of transport or excise goods, or the transferor of own goods to another Member State has no valid number of registration as a taxable person or taxable person with limited liability issued in the other Member State;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

3)         sea-going vessels navigating in international waters, except pleasure craft used for purposes other than those of business interests, and equipment, spare parts, fuel and other supplies used on such sea-going vessels and goods to be transferred to passengers for consumption on board, except goods sold on board sea-going vessels during intra-Community passenger transport to be taken away;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

4)         aircraft used by an air carrier operating mostly on international routes and equipment, spare parts, fuel and other supplies used on such aircraft and goods to be transferred to passengers for consumption on board, except goods sold on board of such aircraft during intra-Community passenger transport to be taken away;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

5)         goods transferred and transported to another Member State to a diplomatic representative, a consular agent (except an honorary consul), a representative or representation of a special mission or an international organisation recognised by the Ministry of Foreign Affairs, a diplomatic representation or consular post, a special mission or a Community institution;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

6)         goods transferred and transported to another Member State which is a Member State of the North Atlantic Treaty Organisation (hereinafter NATO) and intended either for the use of the armed forces of any other NATO Member State or the civilian staff accompanying them, or for supplying their messes or canteens when such forces take part in the common defence effort;

7)         non-Community goods (as defined in the Community Customs Code) placed in a free zone or free warehouse, where such goods have not been placed under any customs procedure and have not been consumed or used under conditions other than those prescribed by the customs rules;

8)         non-Community goods placed in a free zone or free warehouse or other non-Community goods, placed under the customs warehousing procedure, the inward processing procedure applying the suspension system, the transit procedure or the temporary importation procedure with total relief from import duties, and non-Community goods in temporary storage on the condition that the goods have not been unlawfully removed from under customs supervision or consumed or used under conditions other than those prescribed in the customs rules;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

9)         Community goods transported to a free zone or free warehouse for export purposes and Community goods placed in a free zone or free warehouse which are exported within fifteen days as of transportation to the free zone or free warehouse.

(06.05.2004 entered into force 20.05.2004 – RT I 2004, 43, 299)

10)       gold transferred to Eesti Pank;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

11)       the goods specified in Annex J to the Sixth Directive if the goods are immediately placed in a tax warehouse or have been placed in a tax warehouse (§ 441) and the transaction does not involve termination of tax warehousing.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(4)       The rate of value added tax on the following services shall be 0 per cent of the taxable value:

1)         services where the place of supply is not Estonia, excluding cases where the supply of such services is exempt from tax pursuant to § 16 of this Act;

2)         the provision of services necessary for the journey to passengers on board vessels or aircraft during the international transport of passengers;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

3)         the provision of port services to meet the direct needs of vessels navigating in international waters;

4)         the provision of navigation services and airport services to meet the direct needs of aircraft used mostly on international routes;

5)         (Repealed – 07.12.2005 entered into force 01.01.06 – RT I 2005, 68, 528)

6)         the repair, maintenance, chartering and hiring of or establishment of a usufruct on sea-going vessels navigating in international waters, except pleasure craft used for purposes other than business, and aircraft used by an air carrier operating mostly on international routes, and the repair, maintenance and hiring of or establishment of a usufruct on equipment used on such vessels or aircraft;

7)         intermediation, if the place of supply of the transaction being mediated is a third country, or the goods being mediated are the goods specified in clauses (3) 1), 3)-6) or 10) of this subsection, or the services being mediated are the services specified in clauses 2)-4), 6), 9), 10) 12) or 14) of this subsection;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

8)         transport service for goods placed under an external transit procedure, services for the organisation of such transport of goods and ancillary services related to such transport of goods if the carriage is a part of the carriage which begins or ends in a third country.

(20.10.2004 entered into force 01.05.2004 – RT I 2004, 75, 523)

9)         transport services for the export of goods, and ancillary services related to such transport of goods;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

10)       transport services for the import of goods, services for the organisation of transport of goods and ancillary services related to such transport of goods, if the cost of such services is included in the taxable value of the goods to be imported;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

11)       carriage of goods to the Azores or Madeira, or from the Azores or Madeira to Estonia or another Member State;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

12)       work with movables which are brought to Estonia for the purpose of provision of such service and which are taken out of the Community after the service has been provided;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

13)       carriage of passengers specified in clause 10 (1) 4) of this Act, including their personal luggage and personal means of transport, and organising such carriage, if the carriage of passengers in Estonia constitutes a part of international transport of passengers;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

14)       services provided to persons, representations, agencies, special missions, Community institutions or armed forces located in a foreign state and specified in clause (3) 5) or 6) of this section.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(5)       Provision of services with the 0 per cent value added tax rate shall be certified by a contract concluded for the provision of such service, a written order, invoice or other document in proof of the provision of the service.  The tax authority has the right to request additional documents in proof of the provision of the service.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(51)      In the cases specified in clauses (3) 5) and 6) and clause (4) 14) of this section, the document in proof of the provision of a service with the 0 per cent value added tax rate shall be the value added tax and excise duty exemption certificate established by Commission Regulation 31/96/EC on the excise duty exemption certificate (OJ L 8, 11.01.96, pp. 11–15).

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(6)       Regardless of the provisions of clause (3) 1) of this section, tax exemption is applied instead of the 0 per cent value added tax rate in the following cases:

1)         export of similar goods replacing goods which were returned to Estonia after export (within the meaning of the Community Customs Code) if the goods to be replaced were returned to Estonia under a tax exemption on the basis of subsection 17 (2) of this Act;

2)         export of goods imported into Estonia under the 0 per cent value added tax rate on the basis of subsection (3) of this section or under a tax exemption on the basis of § 17 of this Act.

(61)      Regardless of the provisions of clause (4) 1) of this section, tax exemption is applied instead of the 0 per cent value added tax rate to services whose place of supply is another Member State if, upon provision of the service, the taxable person uses the number of registration of the person as a taxable person in another Member State.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(7)       As of 1 July 2007, the value added tax rate on heat sold for own use to natural persons, housing associations, apartment associations, churches, congregations, persons who own hospitals, and legal persons or bodies financed from the state budget or a rural municipality or city budget and on peat, fuel briquettes, coal and firewood sold to natural persons shall be 18 per cent.

 

§ 16. Supply exempt from tax

(1)       Value added tax shall not be imposed on the supply of the following goods and services of a social nature:

1)         universal postal services within the meaning of the Postal Act (RT I 2001, 64, 367; 2002, 61, 375; 63, 387) and payment of state pensions, benefits, support and compensation pursuant to the procedure prescribed by the State Pension Insurance Act (RT I 2001, 100, 648; 2002, 53, 336 and 338; 61, 375; 2003, 20, 116; 48, 343) by means of post;

2)         health services within the meaning of the Health Insurance Act (RT I 2001, 50, 284; 2002, 57, 360; 61, 375; 62, 377; 110, 661; 2003, 26, 157 and 160) and the supply of human organs, human tissue, human blood, blood product made from human blood, and breast milk, as specified in the list approved by a regulation of the Minister of Social Affairs;

(09.02.2005 entered into force 01.05.2005 – RT I 2005, 13, 63)

3)         services provided by a non-profit association to its members free of charge or for a membership fee, and services provided by a non-profit association to natural persons relating to the use of sports facilities or sports equipment;

4)         the social services specified in clauses 10 1), 11), 3), 4), 5) or 6) of the Social Welfare Act (RT I 1995, 21, 323; 2001, 98, 617; 2002, 53, 336; 61, 375; 64, 393; 90, 521; 2003, 58, 388; 75, 498; 88, 591; RT III 2004, 5, 45; RT I 2004, 27, 180);

(08.12.2004 entered into force 01.01.2005 – RT I 2004, 89, 603)

5)         services relating to shelters for the protection of children and young persons;

6)         pre-school, basic, secondary and higher education, including learning materials transferred by the service provider to the recipient of the services, private tuition relating to general education and other training services, except other training services provided for business purposes;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

7)         transportation of sick, injured or disabled persons in vehicles which are specially designed for such purpose and which correspond to the requirements established on the basis of the Traffic Act (RT I 2001, 3, 6; 2002, 92, 531; 90, 521; 105, 613; 110, 654 and 655; 2003, 26, 156; 32, correction notice; 78, 522).

8)         services provided by independent associations of persons to their members provided that the following conditions are met: the supply of the recipient of the services is 90 per cent exempt from tax or the activities thereof are not subject to value added tax; the service is directly necessary for the main activity of the member and the fee paid for the service does not exceed the costs incurred upon the provision of the service.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(2)       Value added tax shall also not be imposed on the supply of the following goods and services:

1)         insurance services, including reinsurance and insurance mediation;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

2)         the leasing or letting of immovables or parts thereof, establishment of a usufruct on immovables or parts thereof, provision of dwelling maintenance services to owners of dwellings, and the costs relating to land tax and building insurance demanded by the lessor of a dwelling or the provider of maintenance services from the recipient of the service. Tax exemption is not applied on the provision of accommodation services, the leasing or letting of or establishment of a usufruct on multi-storey car parks and premises for parking vehicles, and the hiring or leasing of or establishment of a usufruct on permanently installed equipment or machinery or safes;

3)         immovables or parts thereof. Tax exemption is not applied to an immovable if an essential part thereof is a construction works within the meaning of the Building Act, or a part of a construction works which is to be transferred prior to the commencement of use of the construction works; or to an immovable if an essential part thereof is a construction works which has been significantly improved, or a part of such construction works which is to be transferred prior to the post-improvement resumption of use of the construction works or the part thereof, and to a lot within the meaning of the Planning Act if the lot does not contain any construction works. A construction works or a part thereof is deemed to be significantly improved if the costs related to the improvements exceed at least 10 per cent of the acquisition value of the construction works or the part thereof before the making of the improvements;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

4)         valid postal payment means of the Republic of Estonia if sold at their nominal value;

5)         a financial service specified in clauses 6 (1) 1)-8) or 10) of the Credit Institutions Act and negotiation services related thereto, except for factoring, and management of funds provided by the Investment Funds Act for public funds, including pension funds;

(07.12.2005 entered into force 01.01.07 – RT I 2005, 68, 528)

6)         securities;

7)         the organisation of gambling, including lotteries, and lottery tickets;

8)         investment gold, services relating to the transfer of investment gold or entry into a corresponding transfer agreement, or services relating to the supply thereof which are provided by an agent acting in the name and for the account of another person.

9)         goods, upon the acquisition of which there was no right for deduction of input value added tax, unless the goods were acquired before the registration of the acquirer as a taxable person or if, at the time of acquisition of the goods, the input value added tax had been deducted in part.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(3)       A taxable person shall add value added tax to the taxable value of the following goods and services if the person has, during the same taxable period or earlier, notified the regional structural unit of the tax authority (hereinafter tax authority) thereof in writing before the supply is effected:

(12.10.05 entered into force 18.11.05 – RT I 2005, 57, 451)

1)         the leasing or letting of immovables or parts thereof, except dwellings, and establishment of a usufruct on immovables or parts thereof, and the provision of dwelling maintenance services to owners of dwellings;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

2)         immovables and parts thereof, except dwellings;

3)         a service specified in clauses (2) 5) or 6) of this section, except in cases where the service is provided to a taxable person or taxable person with limited liability of another Member State;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

4)         investment gold transferred to a taxable person by a taxable person who, during the business thereof, normally supplies gold for industrial purposes or by a taxable person who produces investment gold or transforms any gold into investment gold, and services relating to such supply which are provided by an agent acting in the name and for the account of another person.

(4)       If a taxable person adds value added tax to the taxable value of goods and services pursuant to subsection (3) of this section, such supply shall be taxed for at least two years as of the first taxable period.

(5)       Value added tax shall not be imposed on the supply of the goods and services specified in subsections (1) and (2) of this section which are deemed to constitute supply of electronically supplied services.

 

§ 17. Imports exempt from tax

(1)       Value added tax shall not be imposed on the import of the following goods:

1)         goods the supply of which is exempt from tax (§ 16);

2)         gold imported by Eesti Pank;

3)         banknotes and coins;

4)         revenue stamps.

5)         natural gas and electricity imported through networks;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

6)         goods subject to immediate tax warehousing on the condition that the recipient of the imported goods is the keeper of the tax warehouse.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(2)       The import of goods referred to in Chapter 1 of Council Regulation (EEC) No 918/83 and goods specified in Title 6 of the Community Customs Code is not subject to value added tax under the conditions prescribed for entitlement to customs duty relief. The import of the said goods shall not be subject to value added tax even in the case of import as specified in clause 6 4) of this Act under the conditions corresponding to the requirements prescribed for entitlement to customs duty relief.

(2)       The import of goods specified in Chapter 1 of Council Regulation 918/83/EEC setting up a Community system of relieves from customs duty (OJ L 105, 23.04.1983, pp. 1–37) and goods with customs preferences specified in Title 6 of the Community Customs Code is not subject to value added tax under the conditions prescribed for entitlement to customs duty relief. The import of goods with customs preferences specified in Title 6 Chapter 2 of the Community Customs Code is not subject to value added tax if the goods are reimported by the person who exported the goods. The import of the said goods shall not be subject to value added tax even in the case of import as specified in subsection 6 (4) of this Act if it meets the requirements prescribed for entitlement to customs duty relief.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(21)      Value added tax shall not be imposed on the import of goods upon the placing of non-Community goods under the customs procedure of release for free circulation, provided that the following conditions are met:

1)         the importer of the goods is an Estonian taxable person;

2)         immediately after the goods have been imported, they are transported, in the same condition, to another Member State where such goods will be received by a taxable person or a taxable person with limited liability of the other Member State;

3)         intra-Community supply is created as a result of transport of the goods to another Member State;

4)         upon import of the goods, the importer confirms the intention to transport the goods to another Member State where such goods will be received by a taxable person or a taxable person with limited liability registered by the other Member State and, after the goods have been transported, provides the customs authority with documentation in proof of the intra-Community supply of the goods;

5)         a security is provided in order to secure the performance of the tax liability which may arise as a result of failure to perform the tax obligation provided in this subsection. The security shall be given, released, used and calculated pursuant to the procedure provided by the customs rules.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(3)       Value added tax shall also not be imposed on the import of the following goods:

1)         books, periodicals or other data media sent to libraries or to research, development or educational institutions;

2)         confiscated counterfeit clothes and footwear transferred to state or local government health care or social welfare institutions pursuant to law.

 

§ 18. Intra-Community acquisition of goods which is exempt from tax

Value added tax shall not be imposed on the following:

1)         intra-Community acquisition of goods the supply of which is exempt from tax (§ 16);

2)         intra-Community acquisition of goods the import of which is exempt from tax (§ 17);

3)         intra-Community acquisition of goods by a foreign taxable person, if the conditions for the refund of value added tax provided for in subsection 35 (1) of this Act are met;

4)         intra-Community acquisition of goods by a taxable person of another Member State in the case of a triangular transaction.

5)         intra-Community acquisition of goods, if the goods are subject to immediate tax warehousing (§ 441).

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

 

Chapter 4

Rights and obligations of taxable persons

 

§ 19. Obligation to register as taxable person

(1)       If the taxable supply of the transactions specified in clauses 1 (1) 1) and 3) of this Act, except the transfer of fixed assets and distance selling to a person of Estonia, carried out by a person, except a foreign person engaged in business with no permanent establishment in Estonia, exceeds 250 000 kroons as calculated from the beginning of a calendar year, an obligation to register as a taxable person (hereinafter registration obligation) shall arise for the person as of the date on which the supply reaches that amount. The registration obligation does not arise if all the taxable supply of the person is supply taxable at the 0 per cent value added tax rate, unless it is intra-Community supply of goods.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(2)       If data concerning a taxable person are deleted from the register on the basis of an application specified in subsection 22 (1) of this Act and if, as of the date following the date of deletion from the register, the taxable supply of the transactions specified in clauses 1 (1) 1) and 3) of this Act carried out by the person exceeds 250 000 kroons during the same calendar year, the registration obligation shall arise for the person again as of the date on which the supply reaches that amount.

(3)       If a foreign person engaged in business with no permanent establishment in Estonia creates taxable supply in Estonia and such supply is not taxed in Estonia upon the acquisition of goods or receipt of services by a taxable person or taxable person with limited liability, the registration obligation shall arise for the person as of the date on which the taxable supply is created. The registration obligation does not arise upon distance selling to a person of Estonia, or if all the taxable supply of the person is supply taxable at the 0 per cent value added tax rate, unless it is intra-Community supply of goods. The registration obligation does not arise for a third country taxable person upon provision of electronically supplied services if the person has been registered in another Member State according to the special arrangements for imposing value added tax on electronically supplied services (§ 43).

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(4)       If a taxable person of another Member State is engaged in distance selling to a person of Estonia (excluding distance selling of excise goods) and the taxable value of the supply of the distance selling exceeds 550 000 kroons as calculated from the beginning of a calendar year, the registration obligation shall arise for the person as of the date on which the supply reaches the specified amount.

(5)       If a taxable person of another Member State is engaged in the distance selling of excise goods to a natural person of Estonia for personal use, the registration obligation shall arise for the taxable person as of the date on which the supply of the distance selling of excise goods is created.

 

§ 20. Registration as taxable person

(1)       A person is required to submit an application for registration as a taxable person to the tax authority within three working days as of the date on which the registration obligation arises.

(2)       A person may submit an application for registration as a taxable person to the tax authority even if the registration obligation has not yet arisen for the person.

(3)       The tax authority shall register a person as a taxable person by entering the data concerning the person in the register of taxable persons (hereinafter registration) as on the date on which the registration obligation arose, within three working days as of the receipt of the application.

(4)       In the case of an application submitted pursuant to subsection (2) of this section, the tax authority shall register the person as a taxable person within three working days as of the receipt of the relevant application either as on the date of receipt of the application or a later date as desired by the applicant.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(41)      In order to be registered, the person shall furnish proof of the fact that the person is engaged in business in Estonia or is about to commence business in Estonia. If the proof provided concerning the person’s business or commencement of business is insufficient, the tax authority has the right to request that the person submit additional proof or collect such proof on its own initiative. The tax authority shall decide on registration within three working days after receipt of the proof. The tax authority shall not register the person if the person is neither engaged in business nor about to commence business.

(5)       The tax authority shall notify the person about the decision on registration not later than on the working day following the date on which the decision is made.

(6)       A person of another Member State engaged in business with no permanent establishment in Estonia has the right to appoint, upon registration as a taxable person, a tax representative specified in the Taxation Act who has been approved by the tax authority. A person of a third country engaged in business with no permanent establishment in Estonia shall appoint, upon registration as a taxable person, a tax representative specified in the Taxation Act who has been approved by the tax authority. This provision does not apply in the case specified in subsection 43 (11) of this section.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(7)       Upon submission of an application for registration, a natural person or the representative of a legal person or a state, rural municipality or city authority shall present his or her identity document. An authorised representative shall present a document certifying his or her authority together with his or her identity document.

(8)       If a person of another Member State engaged in business transfers goods by distance selling to a person of Estonia (excluding distance selling of excise goods) and wishes that the distance selling be taxed in Estonia before the registration obligation arises and wishes to register as a taxable person pursuant to subsection (2) of this section, the person shall submit written confirmation from the competent authorities of the person’s home country that the authorities are aware of such registration.

 

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(9)       If a taxable person is engaged in distance selling to a person of another Member State (excluding distance selling of excise goods) and wishes that the distance selling be taxed in that Member State before the limit on distance selling established in that Member State is exceeded and wishes to be registered as a taxable person of that Member State, the person shall notify the tax authority of such wishes in writing thirty days before the tax liability transfers to the other Member State. The tax authority shall issue written confirmation stating that the tax authority is aware of the person’s wishes to commence payment of tax for distance selling carried out in another Member State in that Member State.

(10)     If the tax authority has information indicating that the registration obligation has arisen for a person but the person has not submitted a registration application on time, the tax authority shall register the person on its own initiative as on the date on which the registration obligation arose. The tax authority shall notify the person of the decision to register the person within three working days as of the date on which the decision is made.

(11)     If, following the registration of a taxable person, the tax authority ascertains that the application was submitted later than prescribed and the person should have commenced performance of the obligations of a taxable person (§ 24) before the date specified in the decision of the tax authority, the tax authority shall repeal its original decision retroactively, make a new decision and register the taxable person as on the date on which the registration obligation arose. The tax authority shall notify the person of the decision to register the person within three working days as of the date on which the decision is made.

(12)     The format of applications for registration of a person as a taxable person and the format of decisions of the tax authority concerning the registration of a taxable person shall be established by a regulation of the Minister of Finance.

 

§ 21. Registration as taxable person with limited liability

(1)       For an Estonian person or a foreign person operating in Estonia through a permanent establishment who receives a service specified in clauses 10 (2) 1)-11) or 14)-16) of this Act from a foreign person engaged in business who is not registered as a taxable person in Estonia, the obligation to register as a taxable person with limited liability shall arise as of the date on which such service was received. This provision does not apply to taxable persons and natural persons who are not engaged in business.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(2)       If the taxable value of the goods acquired by a person by way of intra-Community acquisition (§ 8), except excise goods and new means of transport, exceeds 160 000 kroons as calculated from the beginning of a calendar year, the obligation to register as a taxable person with limited liability shall arise for the person as of the date on which that threshold was exceeded, except in the case specified in subsection (21) of this section. This provision does not apply to taxable persons and natural persons who are not engaged in business.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(21)      If a foreign taxable person engaged in business who has no permanent establishment in Estonia engages in intra-Community acquisition of goods in Estonia, the obligation to register as a taxable person with limited liability arises for the person as of the date of the intra-Community acquisition of the goods. This provision does not apply to Intra-Community acquisition of goods which is exempt from tax (§ 18).

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(3)       A person is required to submit an application for registration as a taxable person with limited liability to the tax authority within three working days as of the date on which the obligation to register as a taxable person with limited liability arises.

(4)       A person may submit an application for registration as a taxable person with limited liability to the tax authority before the registration obligation specified in subsections (1)-(3) of this section arises.

(5)       The provisions of § 20 of this Act concerning the registration of taxable persons apply to the registration of taxable persons with limited liability.

(6)       The format of applications for registration of a person as a taxable person with limited liability and the format of decisions of the tax authority concerning the registration of a taxable person with limited liability shall be established by a regulation of the Minister of Finance.

 

§ 22. Deletion of taxable person from register

(1)       If a person is registered as taxable person but the taxable supply of the transactions specified in clauses 1 (1) 1) and 3) of this Act carried out by the person will not exceed, within the next twelve months and according to the calculations of the taxable person, the threshold specified in subsection 19 (1) of this Act, the person may submit an application to the tax authority for deletion of the person from the register, except in the case specified in subsection (2) of this section.

(2)       If a person of another Member State engaged in business transfers goods by distance selling to a person of Estonia (excluding distance selling of excise goods) was registered as a taxable person pursuant to subsection 20 (2) of this Act before the registration obligation arose and the person has been registered as a taxable person for at least two years and if the taxable supply of the transactions specified in clauses 1 (1) 1) and 3) of this Act carried out by the person did not exceed during the previous calendar year and will not exceed during the current calendar year, according to the calculations of the taxable person, the threshold specified in subsection 19 (1) or (2) of this Act, the person may submit an application to the tax authority for deletion of the person from the register.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(3)       The tax authority has the right to delete a taxable person from the register if the taxable person has failed to submit a value added tax return for the last six consecutive taxable periods.

(31)      The tax authority has the right to delete a taxable person from the register if the taxable person does not engage in business in Estonia. If the proof provided concerning the taxable person’s business is insufficient, the tax authority has the right to request that the taxable person submit additional proof or collect such proof on its own initiative. The tax authority shall give the taxable person written notice of the intention to delete the taxable person from the register and set a term for providing proof concerning the taxable person’s business. If the taxable person fails to provide proof of business within the prescribed term, the tax authority shall delete the taxable person from the register of taxable persons.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(4)       If a taxable person is dissolved or the activities thereof are terminated in Estonia, the tax authority shall delete the taxable person from the register of taxable persons

(5)       A taxable person shall be deleted from the register on the basis of a decision of the head of the tax authority. Before deciding on the deletion of a taxable person from the register, except in the cases specified in subsections (3) and (4) of this section, the tax authority shall, if necessary, audit the economic activities of the person. The taxable person is deemed to be deleted from the register as of the date specified in the decision.

 

§ 23. Deletion of taxable person with limited liability from register

(1)       If a taxable person with limited liability is registered as a taxable person pursuant to § 20 of this Act, the person shall be deleted from the register as a taxable person with limited liability.

(2)       If a person has been registered as a taxable person with limited liability for at least two years and the value of the goods acquired by the person by way of intra-Community acquisition did not exceed during the previous calendar year and will not exceed during the current calendar year, according to the calculations of the taxable person, the threshold specified in subsection 21 (2) of this Act, the person may submit an application to the tax authority to be deleted from the register as a taxable person with limited liability.

(3)       If a taxable person with limited liability is dissolved or the activities thereof are terminated in Estonia, the tax authority shall delete the taxable person from the register as a taxable person with limited liability.

(4)       A taxable person with limited liability shall be deleted from the register as a taxable person with limited liability on the basis of a decision of the head of the tax authority. Before deciding on deletion from the register, except in the case specified in subsection (3) of this section, the tax authority shall, if necessary, audit the activities of the person. A taxable person with limited liability is deemed to be deleted from the register as of the date specified in the decision.

 

§ 24. Rights and obligations of taxable persons

(1)       As of the date of registration as a taxable person, a person shall perform the obligations of a taxable person, including adding the amount of value added tax to the taxable value of the goods transferred or services provided, calculating the amount of value added tax due pursuant to the procedure provided for in § 29 of this Act, paying value added tax pursuant to the procedure provided for in § 38, preserving documents and maintaining records pursuant to the provisions of § 36, and shall issue invoices in accordance with the requirements of § 37 of this Act.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(2)       Subsection (1) of this section shall applies to foreign persons registered in Estonia as taxable persons who create supply in Estonia.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

 

§ 25. Rights and obligations of taxable persons with limited liability

(1)       As of the date of registration as a taxable person with limited liability, a person shall perform the obligations of a taxable person with limited liability, including calculating the amount of value added tax due pursuant to the provisions of subsection 29 (12) of this Act, paying value added tax pursuant to the procedure provided for in § 38, preserving documents and maintaining records pursuant to the provisions of subsection 36 (3) of this Act. A taxable person with limited liability shall submit a value added tax return pursuant to the provisions of § 27 of this Act only if the person has performed acts specified in subsection 3 (5) of this Act during the taxable period. A taxable person with limited liability does not have the right to deduct input value added tax.

(2)       A taxable person with limited liability who was registered pursuant to subsection 21 (1) of this Act upon the receipt of services specified in subsection 10 (2) of this Act from a foreign taxable person is not required to pay value added tax on the intra-Community acquisition of goods, except the intra-Community acquisition of excise goods or a new means of transport, if the taxable value of the goods acquired during a calendar year does not exceed 160 000 kroons. Within three working days as of the date on which that threshold is exceeded, the taxable person with limited liability shall notify the tax authority in writing of having exceeded the threshold on the intra-Community acquisition of goods.

(3)       A taxable person with limited liability who does not pay value added tax on the intra-Community acquisitions of goods pursuant to subsection (2) of this section shall not use its registration number as a taxable person with limited liability when acquiring goods from another Member State. If a taxable person with limited liability uses its registration number as a taxable person with limited liability when acquiring goods from another Member State, the person shall be required to perform all the obligations specified in subsection (1) of this section.

 

§ 26. Registration of taxable persons as single taxable person

(1)       The tax authority shall register a parent undertaking and its subsidiaries within the meaning of the Commercial Code (RT I 1995, 26–28, 355; 1998, 91–93, 1500; 1999, 10, 155; 23, 355; 24, 360; 57, 596; 102, 907; 2000, 29, 172; 49, 303; 55, 365; 57, 373; 2001, 34, 185; 56, 332 and 336; 89, 532; 93, 565; 2002, 3, 6; 35, 214; 53, 336; 61, 375; 63, 387 and 388; 96, 564; 102, 600; 110, 657; 2003, 4, 19; 13, 64; 18, 100; 78, 523) as a single taxable person on the basis of a joint application by such taxable persons. Taxable persons to whom one of the following circumstances applies shall also be registered as a single taxable person on the basis of a joint application:

1)         at least 50 per cent of the shares of each public limited company to be registered as a single taxable person or of the holdings in each private limited company or a general or limited partnership to be registered as a single taxable person are owned by one and the same person;

2)         at least 50 per cent of the votes determined by the shares of each public limited company or private limited company to be registered as a single taxable person or by the contributions into each general or limited partnership to be registered as a single taxable person are owned by one and the same person.

(2)       Before persons who have not been registered as taxable persons are registered as a single taxable person, they shall be registered by the tax authority as separate taxable persons pursuant to the procedure provided for in § 20 of this Act.

(3)       The tax authority shall annul a decision concerning registration of taxable persons as a single taxable person:

1)         if the tax authority has information indicating that the circumstances specified in subsection (1) of this section no longer exist, as of the first day of the month following the month in which such circumstances cease to exist;

2)         on the basis of a joint application by the taxable persons registered as a single taxable person, as of the first day of the month following the month of receipt of the application.

(4)       The procedure for registration of taxable persons as a single taxable person, the format of the corresponding registration applications, the format of decisions of the tax authority concerning registration and the procedure for annulment of a decision concerning registration of taxable persons as a single taxable person at their request shall be established by a regulation of the Minister of Finance.

(5)       As of the date of the annulment of a decision concerning registration of taxable persons as a single taxable person, the taxable persons are deemed to be re-registered as separate taxable persons.

(6)       Persons registered as a single taxable person shall submit value added tax returns separately but shall be solidarily liable for payment of value added tax by the due date. In the case the decision concerning registration as a single taxable person is annulled, the taxable persons shall be solidarily liable for the value added tax arrears which arose during the period when they were registered as a single taxable person.

(7)       Overpaid amounts of value added tax shall be calculated separately for each of the taxable persons registered as a single taxable person. Overpaid amounts of value added tax shall be refunded according to the value added tax returns submitted by the taxable persons registered as a single taxable person.

 

§ 27. Taxable period and value added tax return

(1)       The taxable period is one calendar month. Value added tax returns shall be submitted to the tax authority by the twentieth day of the month following the taxable period. The first taxable period for a taxable person or taxable person with limited liability is the period from the date of registration as a taxable person or taxable person with limited liability until the end of the same month. If the number of calendar days in the first taxable period is less than fifteen, the taxable person or taxable person with limited liability may declare the supply of the first period together with the supply of the following taxable period and submit one return concerning two taxable periods. The format of value added tax returns shall be established by a regulation of the Minister of Finance.

(2)       The following are required to submit value added tax returns:

1)         taxable persons;

2)         taxable persons with limited liability who have performed acts specified in subsection 3 (5) of this Act during the taxable period;

3)         persons specified in clause 3 (6) 2) of this Act in the case of transactions concerning which the person has issued an invoice or other sales document in which the amount of value added tax is indicated.

(3)       (Repealed – 07.12.2005 entered into force 01.01.06 – RT I 2005, 68, 528)

(4)       On the basis of a reasoned request made by a taxable person, the head of the tax authority may, by his or her decision, establish a taxable period longer than one calendar month for the taxable person, provided that it begins on the first day of the calendar month or first taxable period and ends on the last day of one of the following calendar months. In this case, value added tax returns shall still be submitted to the tax authority by the twentieth day of the month following the taxable period.

(5)       If a taxable person or taxable person with limited liability amends information submitted in a value added tax return concerning a previous taxable period, the person is required to submit a new value added tax return with the amended information to the tax authority concerning that taxable period.

 

§ 28. Report on intra-Community supply of goods

(1)       A taxable person who has effected intra-Community supply of goods during a taxable period or who has transferred goods as a reseller in a triangular transaction during a taxable period is required to submit a report on intra-Community supply of goods.

(2)       A report on intra-Community supply of goods shall be submitted to the tax authority by the twentieth day of the month following each quarter.

(3)       If a taxable person amends information in a report on intra-Community supply of goods submitted concerning a previous quarter, the person is required to submit a report on the amendment of intra-Community supply of goods to the tax authority concerning the corresponding quarter.

(4)       The standard format of reports on intra-Community supply of goods and instructions for the completion thereof and the standard format of reports on the amendment of intra-Community supply of goods and instructions for the completion thereof shall be established by a regulation of the Minister of Finance.

(5)       A taxable person who has transferred a new means of transport to a person of another Member State which will be transported to the other Member State shall add the invoice issued upon the sale of the means of transport to the report on intra-Community supply of goods.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

 

§ 29. Calculation of amount of value added tax

(1)       The amount of value added tax to be paid by a taxable person is the value added tax calculated during the taxable period on transactions or acts specified in subsection 3 (4) of this Act less the input value added tax of the same taxable period on taxable supply, or goods or services used for transactions or acts specified in subsection 4 (2) of this Act and related to business or for business carried out in a foreign state, except transactions deemed to be supply exempt from tax (§ 16). Input value added tax of the same taxable period on goods or services used for services specified in clause 16 (2) 1), 5) or 6) of this Act which are provided to a person of a third country may also be deducted.

(2)       Calculated value added tax is the value added tax calculated on the taxable value of the transactions or acts specified in subsection 3 (4) of this Act, excluding the import of goods, carried out or performed by a taxable person.

(3)       Input value added tax is:

1)         value added tax to be paid on goods or services which a taxable person acquires or receives from another taxable person;

2)         value added tax paid or to be paid by a taxable person on imported goods;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

3)         value added tax calculated by a taxable person on the taxable value of services the place of supply of which is Estonia and which are received from a person of a foreign state engaged in business who is not registered as a taxable person in Estonia;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

4)         value added tax calculated by a taxable person on the taxable value of goods acquired by way of intra-Community acquisition, goods installed or assembled which are acquired, goods acquired by way of a triangular transaction or other goods which are acquired and on which the taxable person is required to calculate value added tax pursuant to this Act.

(4)       If a taxable person uses goods or services for the purposes of transactions specified in subsection (1) of this section as well as purposes other than those related to business, only input value added tax on goods or services used for the purposes of transactions specified in subsection (1) of this section shall be deducted. If it is not possible to separate input value added tax on goods or services used for the purposes of transactions specified in subsection (1) of this section from input value added tax on goods or services used for purposes other than those related to business in the accounts of the taxable person, the procedure for deduction of input value added tax shall be determined by a decision of the head of the tax authority on the basis of an application by the taxable person, taking into account the actual use of the goods or services. Input value added tax on an automobile, motor fuel acquired for the automobile and costs directly related to the automobile shall be deducted regardless of the proportion of its use for business purposes, unless the person is a sole proprietor.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(5)       If a taxable person has, prior to the person’s date of registration as a taxable person, acquired goods, except for fixed assets, intended for transfer or for the manufacture of goods to be transferred or has acquired goods intended for supply exempt from tax (§ 16), the reception of guests, the provision of meals or accommodation for the employees of the taxable person or for purposes not related to business, the taxable person has the right to deduct the input value added tax on such goods in the taxable period during which the goods were transferred as taxable supply. Input value added tax on the fixed assets acquired before registration of a person as a taxable person may be deducted, taking account of the provisions of subsection 32 (4) of this Act only if the person has not used such fixed assets before registration as a taxable person.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(6)       Upon the export of goods specified in subsection 5 (2) of this Act, a taxable person has the right to reduce the person’s tax liabilities in the taxable period during which the criteria set out in subsection 5 (2) were complied with by the amount of value added tax indicated on a document with customs confirmation if, at the time of submission of a value added tax return for the taxable period during which the goods were transferred, not all the criteria according to which the transfer of goods was treated as the export of goods had been complied with.

(7)       If a taxable person cancels an invoice concerning goods or services or submits a credit invoice after submission of a value added tax return concerning the taxable period in which the supply of the goods or services was created, both the purchaser and the seller shall indicate the corresponding amendments in the value added tax return submitted concerning the taxable period during which the invoice was cancelled or the credit invoice was submitted. A credit invoice may only be submitted with regard to a specific invoice referred to in the credit invoice.

(8)       If the supply of goods has been effected but the contract under which the ownership of the goods is to pass to the contractual user of the goods upon termination of the contract is cancelled and the purchaser who is not registered as a taxable person returns the goods, the seller may adjust the amount of value added tax payable for the taxable period in which the goods were returned by the amount of value added tax refunded to the purchaser.

(9)       If a seller receives money from a purchaser but the goods are not transferred or the services are not provided, the seller is permitted to cancel the calculation of value added tax on such goods or services if the seller refunds the amount to the purchaser.

(10)     If a taxable person is deleted from the register, the person shall pay value added tax on goods not yet transferred if the person has deducted the input value added tax on such goods upon acquisition. The acquisition cost or, in the absence thereof, the cost price of the goods shall be the taxable value of the goods. This provision does not apply to fixed assets.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(11)     (Repealed – 07.12.2005 entered into force 01.01.06 – RT I 2005, 68, 528)

(12)     The amount of value added tax to be paid by a taxable person with limited liability is the value added tax calculated on the acts specified in subsection 3 (5) of this Act.

(13)     The amount of value added tax shall be calculated on the basis of the tax rate which is applicable on the date determined pursuant to § 11 of this Act. Where information required for the calculation of the amount of value added tax on the import of goods or intra-Community acquisition of goods is expressed in a foreign currency, the exchange rate shall be determined in accordance with the provisions of the Community Customs Code governing the calculation of value for customs purposes. Where information required for the calculation of the amount of value added tax on a transaction other than an import or intra-Community acquisition transaction is expressed in a foreign currency, the exchange rate of the Estonian kroon as determined by Eesti Pank and applicable on the date determined pursuant to § 11 of this Act applies.

 

§ 30. Restrictions on deduction of input value added tax

(1)       Input value added tax on goods or services relating to the reception of guests or the provision of meals or accommodation for employees shall not be deducted from calculated value added tax.

(2)       The provisions of subsection (1) of this section do not apply to the deduction of input value added tax paid for accommodation services received during a business trip.

 

§ 31. Conditions for deduction of input value added tax

(1)       Upon the receipt of goods or services from another taxable person, input value added tax shall be deducted on the basis of an invoice meeting the requirements of § 37 of this Act.

(2)       Upon intra-Community acquisition of goods, acquisition of goods installed or assembled, acquisition of goods by way of a triangular transaction (clause 3 (4) 4)) or other acquisition of goods from a foreign person engaged in business on which a taxable person is required to calculate value added tax pursuant to law, input value added tax shall be deducted on the basis of an invoice.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(3)       Upon the receipt from a foreign person engaged in business of services on which a taxable person is required to calculate value added tax pursuant to this Act, input value added tax shall be deducted on the basis of an invoice.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(4)       Upon the import of goods, input value added tax shall be deducted on the basis of a customs declaration. If goods are imported from a third country which is a part of the Community customs territory, input value added tax shall be deducted on the basis of an invoice received from a third country person engaged in business and a customs declaration containing the particulars of the imported goods (subsection 38 (2)).

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(41)      If the amount of value added tax due upon the import of goods is paid on the basis of a decision resulting from a follow-up inspection by the customs authorities, the input value added tax shall be deducted based on the decision of the customs authorities.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(5)       (Repealed – 07.12.2005 entered into force 01.01.06 – RT I 2005, 68, 528)

(6)       If a taxable person who is importing goods pays the value added tax through a customs agency, the person has the right to deduct the input value added tax after the customs has released the goods and the taxable person has received a declaration approved by the customs authorities from the customs agency.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(7)       A customs agency shall not treat value added tax paid or to be paid for another person as value added tax paid or to be paid on goods imported for the purposes of the business of the agency.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(8)       In the case of the import of goods, input value added tax shall be deducted in the taxable period during which the customs released the goods. In other cases, input value added tax shall be deducted in the taxable period during which the goods or services are acquired or received pursuant to § 11 of this Act.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(9)       Where goods acquired or services received and the invoice issued for such goods or services are received during different taxable periods, input value added tax shall be deducted in the taxable period when the transferor of the goods or the provider of the services created supply pursuant to § 11 of this Act. If the invoice which is the basis for the deduction of input value added tax is not received by the time the value added tax return is submitted for a taxable period, input value added tax shall be deducted in the taxable period during which the invoice is received.

 

§ 32. Partial deduction of input value added tax

(1)       If a taxable person uses goods or services for the purposes of both taxable supply and supply exempt from tax, input value added tax shall be partially deducted from the calculated value added tax. Partial deduction shall be based on the proportion of the supply of the taxable person effected in Estonia and foreign countries where the input value added tax can be deducted pursuant to subsection 29 (1) of this section to the total amount of the supply effected by the person in Estonia and foreign countries (hereinafter proportion of taxable supply to total supply). The proportion of taxable supply to total supply shall be rounded up to two decimal points or to a full percentage.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(2)       The transfer of fixed assets shall not be taken into account when calculating the proportion of taxable supply to total supply, including in cases where the taxable person has added value added tax to the taxable value of the goods pursuant to subsection 16 (3) of this Act. The provision of the services specified in clauses 16 (2) 5) and 6) of this Act, in so far as these are incidental transactions, shall also not be taken into account.

(3)       Upon partial deduction of input value added tax, a taxable person may change the proportion of taxable supply to total supply referred to in subsection 33 (2) of this Act during a calendar year with the written permission of the head of the tax authority obtained on the basis of a reasoned request made by the taxable person if the actual proportion of taxable supply to total supply in the current calendar year is substantially different.

(4)       A taxable person may deduct input value added tax paid upon acquisition of fixed assets, including immovables, for business purposes and upon acquisition of goods or receipt of services intended for the fixed assets in the month during which the fixed assets or goods intended for the fixed assets were acquired or services received, taking into account the estimated proportion in which the fixed assets were to be used for the purposes of taxable supply during the year of acquisition. Input value added tax shall be adjusted within the period for adjustment of input value added tax as of the year of acquisition of the fixed assets according to the actual proportion in which the fixed assets are used for the purposes of taxable supply. Input value added tax shall be adjusted only for the goods acquired and services received for the fixed assets which increase the acquisition value of the fixed assets and only in case of the goods acquired and services received for an immovable which increase the book value of the immovable.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(41)      The period for adjustment of input value added tax shall be ten calendar years in the case of immovables and goods and services relating thereto and five calendar years in the case of other fixed assets and goods and services relating thereto. The period of time between the date of acquisition of the fixed assets and the last day of the current calendar year is deemed to be the first calendar year. In the case of fixed assets, the period of time between the date of acquisition of goods or receipt of services for the fixed assets and the last day of the current calendar year is deemed to be the first calendar year.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(42)      Input value added tax shall be adjusted at the end of each calendar year taking into account the actual proportion in which the fixed assets are used for the purposes of taxable supply during the given calendar year, except in the case specified in subsection (5) of this section.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(5)       Upon the transfer of fixed assets, input value added tax shall be adjusted during the month in which the fixed assets are transferred. Input value added tax need not be adjusted upon transfer of an immovable used for business purposes to a credit or financial institution if the person who transfers the immovable has obtained the use of the immovable from the credit or financial institution on the basis of a contract during the same period of taxation and continues to use the immovable for business purposes for at least ten calendar years as of the beginning of use of the immovable for the business of the person.

(6)       The procedure for reporting recalculation of partially deducted input value added tax in a value added tax return and the procedure for the adjustment of input value added tax on fixed assets acquired and the goods acquired or services received for the fixed assets shall be established by a regulation of the Minister of Finance.

(7)       Taxable persons who supply investment gold exempt from value added tax have the right to deduct:

1)         input value added tax paid upon purchasing investment gold from a taxable person who has exercised the right specified in clause 16 (3) 4) of this Act;

2)         input value added tax paid on gold other than investment gold and imported by them, acquired by way of intra-Community acquisition or acquired from another taxable person, on the condition that they subsequently transform the gold into investment gold;

3)         input value added tax paid upon receipt of services relating to a change of the form, weight or purity of the gold.

 

§ 33. Methods for partial deduction of input value added tax

(1)       Upon partial deduction of input value added tax in the case specified in subsection 32 (1) of this Act, the taxable person may use either the method of proportional deduction or the method combining direct calculation and proportional deduction during one and the same calendar year.

(2)       In the case of proportional deduction, the proportion of taxable supply to total supply shall be applied upon deduction of the input value added tax in full. The proportion of taxable supply to total supply shall be determined on the basis of the supply effected by the taxable person during the previous calendar year. The result shall be adjusted at the end of the calendar year, taking into account the proportion of taxable supply to total supply during the given calendar year. If the person has engaged in business for less than one calendar year, the proportion of taxable supply to total supply shall be determined by a decision of the head of the tax authority on the basis of an application by the taxable person, taking into account the estimated proportion of taxable supply to total supply during the first calendar year.

(3)       In the case of the method combining direct calculation and proportional deduction, the input value added tax paid on goods acquired or services received for the purposes of taxable supply shall be deducted from the calculated value added tax. The input value added tax paid on goods acquired or services received for the purposes of supply exempt from tax shall not be deducted from the calculated value added tax. The input value added tax paid on goods acquired or services received for the purposes of both taxable supply and supply exempt from tax shall be deducted according to the proportion of taxable supply to total supply pursuant to the procedure provided for in subsection (2) of this section. A taxable person shall keep separate accounts for taxable supply and supply exempt from tax, for the goods acquired and services received for the purposes thereof and for goods acquired or services received for the purposes of both taxable supply and supply exempt from tax.

(4)       If a taxable person has effected only supply exempt from tax or only taxable supply in an area of activity and both taxable supply and supply exempt from tax in another area of activity, the taxable person may, with the written permission of the head of the tax authority, deduct the input value added tax paid on goods acquired or services received for the purposes of both taxable supply and supply exempt from tax in such area of activity according to the proportion of taxable supply to total supply in the same area of activity. Otherwise, the provisions of subsection (3) of this section apply in such cases.

 

§ 34. Refund of input value added tax to taxable person

(1)       If value added tax calculated during a taxable period is less than the amount of input value added tax deductible by the taxable person during the same period, the overpaid amount of value added tax shall be refunded to the taxable person pursuant to the procedure provided for in the Taxation Act.

(2)       The tax authority may, in connection with checking a claim for refund, extend the term for fulfilment of the claim by a reasoned decision for up to ninety calendar days if there is reason to believe that it may be impossible to reclaim the sum paid upon satisfaction of the claim for refund, and if:    

1)         the taxable person has been ordered to provide additional proof, or

2)         an inquiry to a third person or foreign tax authority has been made in order to check the claim for refund.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(3)       The term for fulfilling a claim for refund may be extended for up to thirty calendar days at a time. The tax authority shall make a written reasoned decision on extension of the term of fulfilment of the claim for refund not later than five calendar days after the term of expiry of the of the term of fulfilment of the claim for refund.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

 

§ 35. Refund of input value added tax in other cases

(1)       Value added tax paid by a foreign taxable person in Estonia upon the import or acquisition of goods, except immovables, or receipt of services used for business purposes shall be refunded to the foreign taxable person on the basis of a written application from the taxable person and pursuant to the procedure established by a regulation of the Minister of Finance if:

1)         the taxable person is required to pay value added tax as an undertaking in the home country of the person;

2)         the taxable person does not have a permanent establishment in Estonia through which the taxable person engages in business in Estonia;

3)         the amount of value added tax to be refunded is at least 400 kroons per calendar year or 3000 kroons in the case where the application is submitted concerning a period longer than three months but shorter than a calendar year.

4)         taxable persons of Estonia have the right to deduct, pursuant to this Act, input value added tax paid upon the import or acquisition of goods or receipt of services under the same conditions from their calculated value added tax.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(2)       If a person is a taxable person of a third country, value added tax paid upon the import or acquisition of goods, except immovables, or receipt of services for business purposes shall be refunded to the person in Estonia provided that, in addition to the requirements set out in clauses (1) 1) 2) and 4) of this section, the following requirements are met:

1)         in the home country of the foreign taxable person, Estonian residents have the right to the refund of value added tax;

2)         the amount of value added tax to be refunded per calendar year is at least 5000 kroons.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(3)       If a taxable person of a third country who applies special arrangements for imposing value added tax on electronically supplied services is not registered as a taxable person in any of the Member States and pays value added tax in Estonia upon the import or acquisition of goods, except immovables, or receipt of services used for business purposes, such value added tax shall be refunded to the taxable person of a third country on the basis of a written application from the taxable person and pursuant to the procedure established by a regulation of the Minister of Finance.

(4)       Value added tax to be refunded shall be transferred to the bank account specified in an application submitted in the format established by a regulation of the Minister of Finance.

(5)       The Government of the Republic has the right to establish, by a regulation, a list of movables and services upon the acquisition of which value added tax paid is not refunded to taxable persons of third countries even if the requirements specified in subsections (1) and (2) of this section are satisfied.

(6)       Input value added tax paid upon acquisition or importation of goods in Estonia shall be refunded to persons who export such goods as humanitarian aid, provided that the export of the goods is certified by documents specified in subsection 5 (5) of this Act. Humanitarian aid is irrecoverable aid granted for alleviation of need to international organisations, foreign governments, foreign local governments or foreign non-governmental organisations.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(7)       If a person transfers a new means of transport which is delivered to another Member State and the person is not entitled to the right to deduct input value added tax provided for in § 29 of this Act, the value added tax paid upon the acquisition of the new means of transport shall be refunded to the person after delivery of the new means of transport to the other Member State provided that the person proves that value added tax has been paid on the intra-Community acquisition of the goods in the other Member State. Value added tax shall be refunded in an amount not exceeding the value added tax calculated on the sales price of the new means of transport.

(8)       If a person is not entitled to the right to deduct input value added tax and cannot apply for a refund of value added tax on the basis of subsection (1) of this section, value added tax paid upon the import of goods shall be refunded to the person provided that the person proves that value added tax has been paid on the intra-Community acquisition of the goods in another Member State.

(9)       If a taxable person hires out a means of transport, except an automobile, or leases it to a third country person or establishes a usufruct on a means of transport, except an automobile, for the benefit of a third country person, value added tax paid on such services shall be refunded to the person on the basis of an application provided that the person proves that the means of transport was used in a third country and that value added tax is also paid on the services in the third country.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(10)     The procedure for the refund of value added tax to foreign taxable persons, the format of applications for such refunds of value added tax and the procedure for the refund of value added tax to persons who export goods as humanitarian aid shall be established by a regulation of the Minister of Finance.

(11)     The procedure for the refund of value added tax paid upon the acquisition of new means of transport in special cases shall be established by a regulation of the Minister of Finance.

(12)     The procedure for the refund of value added tax paid in Estonia upon the import or acquisition of goods, except immovables, or receipt of services used for business purposes to taxable persons of third countries who apply special arrangements for imposing value added tax on electronically supplied services (subsection 43 (1)) shall be established by a regulation of the Minister of Finance.

 

§ 36. Obligations of taxable persons and taxable persons with limited liability upon keeping records

(1)       A taxable person shall:

1)         preserve copies of invoices issued by or on behalf the person (subsection 37 (1)) and invoices for goods acquired or services received by or on behalf of the person in chronological order for seven years as of the date of their issue or receipt. The information set out in an invoice shall be preserved in its original form. Customs declarations certifying the import of goods shall be preserved for seven years as of the beginning of the calendar year following customs formalities;

2)         pursuant to the procedure established by a regulation of the Minister of Finance, maintain daily records of taxable supply and supply exempt from tax, calculated value added tax, input value added tax payable on taxable supply acquired from other registered taxable persons or on goods and services specified in subsection 4 (2) of this Act and used for business purposes, input value added tax calculated on the taxable value of received services or acquired goods specified in clauses 3 (4) 2)-5) of this Act, and input value added tax paid or to be paid on imported goods used for the purposes of business;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

3)         keep records of goods dispatched or transported to another Member State by or on behalf of the taxable person, provided that such goods are not treated as intra-Community acquisition of goods pursuant to subsection 7 (2) of this Act;

4)         keep records of movables specified in clause 8 (3) 3) of this Act and delivered to the taxable person to Estonia from another Member State with an accuracy which enables the movables to be identified;

5)         keep record of the transactions related to the returnable packaging specified in subsection 11 (7) of this Act and preserve the documentation concerning returnable packaging for a period of at least seven years.

(21.04.2004 entered into force 01.06.2004 – RT I 2004, 41, 278)

(2)       Registered taxable persons who sell investment gold shall maintain records of all transactions relating to investment gold and of all purchasers of investment gold and shall preserve the documentation relating to each transaction for five years as of the date of the transaction.

(3)       A taxable person with limited liability shall:

1)         preserve copies of invoices for goods acquired or services received specified in clauses 3 (4) 2)-5) of this Act in chronological order for seven years as of the date of their issue or receipt. The information set out in an invoice shall be preserved in its original form;

2)         pursuant to the procedure established by a regulation of the Minister of Finance, maintain daily records of value added tax calculated on the taxable value of received services and imported or acquired goods specified in clauses 1 (1) 2) and 5) or clauses 3 (4) 2)-5) of this Act;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

3)         keep records of goods dispatched or transported to another Member State by or on behalf of the taxable person with limited liability, provided that such goods are not treated as intra-Community acquisition of goods pursuant to subsection 7 (2) of this Act;

4)         keep records of movables specified in clause 8 (3) 3) of this Act and delivered to the taxable person with limited liability in Estonia from another Member State with an accuracy which enables the movables to be identified.

(4)       A taxable person or taxable person with limited liability may choose the place at which invoices are preserved on the condition that the person makes the invoices or information preserved therein immediately available to the tax authority at the latter’s request. Where the place at which invoices are preserved is outside Estonia, the taxable person or taxable person with limited liability shall inform the tax authority about the place at which the invoices are preserved.

 

(5)       The procedure for maintaining daily records of taxable supply and supply exempt from tax, calculated value added tax, input value added tax payable on taxable supply acquired from other registered taxable persons or on goods or services specified in subsection 4 (2) of this Act and used for business purposes, input value added tax calculated on the taxable value of received services or acquired goods specified in clauses 3 (4) 2)-5) of this Act, and input value added tax paid or to be paid on imported goods shall be established by a regulation of the Minister of Finance.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

 

§ 37. Invoices

(1)       A taxable person shall issue an invoice for the transfer of goods or provision of services within seven calendar days as of the date on which the goods are dispatched or made available to the purchaser or the services are provided or as of the last day of the taxable period specified in subsection 11 (4) of this Act, or ensure that the invoice is issued within that term by a person acting in the name and for the account of the taxable person or by the acquirer of the goods or the recipient of the services, except in the case specified in subsection (3) of this section.

(2)       If the time of supply is the time of receipt of full or partial payment for the goods or services, an invoice shall be issued within seven calendar days as of the date of receipt of full or partial payment for the goods or services.

(3)       An invoice meeting the requirements of this section need not be issued upon the transfer of goods or provision of services to a natural person for personal use, except in the case of distance selling, the transfer of a new means of transport or treating goods transferred to third country natural persons as exports. An invoice need not be issued upon the transfer of goods or provision of services specified in subsection 16 (1) or (2) of this Act provided that value added tax is not imposed on such supply.

(4)       A document, including a credit invoice, which amends an initial invoice and which contains a reference to the initial invoice shall be deemed to be an invoice.

(5)       An invoice may be issued by the acquirer of goods or the recipient of services in respect of goods transferred or services provided thereto by a taxable person, on the condition that, before supply is effected, there is a written agreement between the two parties pursuant to which the acquirer of goods or the recipient of services will issue an invoice (or invoices) and the taxable person will accept the invoice (or invoices). The agreement must contain the procedure for the acceptance of each invoice by the taxable person.

(6)       An invoice may be issued on paper or, subject to acceptance by the acquirer of goods or the recipient of services, by electronic means.

(7)       The following shall be set out in an invoice:

1)         the serial number and date of issue of the invoice;

2)         the name and address of the taxable person and the person’s registration number as a taxable person;

3)         the name and address of the acquirer of goods or the recipient of services;

4)         the registration number of the acquirer of goods or the recipient of services as a taxable person if the acquirer of goods or the recipient of services has tax liabilities upon the acquisition of goods or receipt of services;

5)         the name or a description of the goods or services;

6)         the quantity of the goods or extent of the services;

7)         the date of dispatch of the goods or provision of the services and/or an earlier date of receipt of full or partial payment for the goods or services if the date can be determined and differs from the date of issue of the invoice;

8)         the price of the goods or services exclusive of value added tax and any discounts, if these are not included in the price;

9)         the taxable amount broken down by different rates of value added tax together with the applicable rates of value added tax or the amount of supply exempt from tax;

10)       the amount of value added tax payable, except in the cases provided by law. The amount of value added tax shall be indicated in kroons.

(8)       In addition to the information listed in subsection (7) of this section, the following shall also be set out in an invoice:

1)         where supply subject to value added tax at the rate of 0 per cent or supply exempt from tax is involved, reference shall be made to the appropriate provision based on which such rate can be applied: to clause of subsection 15 (3) or (4) or the appropriate clause or clause of § 16 of this Act, or to the appropriate paragraph of Article 13 or 15, clause (c) of section 1 of Article 8, section B of Article 26b or section E of Article 28c of the Sixth Directive, or where intra-Community supply of goods is involved, reference to section A of Article 28c of the Sixth Directive, and where transport of goods to the Azores or Madeira, or from the Azores or Madeira to Estonia or another Member State is involved, reference to section C of Article 28c of the Sixth Directive. Reference to the appropriate provision based on which the tax rate is applied need not be set out in the invoice upon export, and the reference to the provision of the Directive need not be set out in the invoice if the place of supply of the service is not Estonia;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

2)         where the acquirer of goods or the recipient of services is liable to pay the tax, reference to Article 21 of the Sixth Directive;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

3)         where goods sold to a natural person of a third country are treated as exports (subsection 5 (2)), reference to subsection 5 (2) of this Act or paragraph 2 of Article 15 of the Sixth Directive;

4)         in the case of intra-Community transfer of a new means of transport, the particulars certifying that the transferred goods are a new means of transport and reference to clause 15 (3) 2) of this Act or sub-paragraph A(b) of Article 28c of the Sixth Directive;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

5)         in the case of a triangular transaction, the registration number as a taxable person of the acquirer of the goods and reference to sub-paragraph E 3 of Article 28 of the Sixth Directive;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

6)         where special arrangements apply for imposing value added tax on travel services (§ 40), reference to § 40 of this Act or Article 26 of the Sixth Directive;

7)         where special arrangements apply for imposing value added tax on the resale of second-hand goods, original works of art, collectors’ items and antiques (§ 41) or where special arrangements apply for imposing value added tax on the sale of second-hand goods, original works of art, collectors’ items and antiques by public auction (§ 42), reference to §§ 41 or 42 of this Act or Article 26a or paragraph C of Article 26a of the Sixth Directive, correspondingly;

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

8)         if a foreign person engaged in business has designated a tax representative (§ 20), the registration number as a taxable person and the name and address of the tax representative, and reference to subsection 20 (6) of this Act or paragraph 2 of Article 21 of the Sixth Directive.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(9)       A simplified invoice may be issued, provided that the amount indicated in the invoice does not exceed 1000 kroons exclusive of value added tax, in the following cases:

1)         upon the provision of transport services for passengers;

2)         in the case of invoices printed by parking meters, automated petrol stations and other similar machines.

(10)     In the cases specified in subsection (9) of this section, at least the following information shall be set out in an invoice:

1)         the date of issue of the invoice;

2)         the name of the taxable person and the person’s registration number as a taxable person;

3)         the name or a description of the goods or services;

4)         the taxable amount;

5)         the amount of value added tax to be paid.

(11)     A taxable person to whom an invoice is issued in compliance with the requirements listed in subsection (10) of this section shall indicate the name of the taxable person and the person’s registration number as a taxable person on the invoice.

 

§ 38. Payment and receipt of value added tax

(1)       A taxable person or taxable person with limited liability shall pay the amount of value added tax due by the date of submission of the value added tax return. The person shall, pursuant to the same procedure, pay any amount of value added tax which the person has indicated in an invoice or other sales document issued in violation of provisions of law.

(2)       Payment of value added tax upon the import of goods shall be subject to the procedure provided by the customs rules. Upon the import of goods in the case specified in subsection 6 (4) of this Act, a person shall submit information concerning the import of goods on a customs declaration form and pay value added tax pursuant to the procedure provided by the customs rules.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(3)       A person specified in clause 3 (6) 2) of this Act shall pay value added tax by the twentieth day of the month following the month in which the corresponding invoice or other sales document is issued.

(4)       A person specified in clause 3 (6) 3) of this Act shall pay, pursuant to the procedure established by the Minister of Finance, value added tax to the customs authorities by the date of registration of a new means of transport acquired from another Member State or, in the case of a new means of transport which is not subject to registration, within ten calendar days as of the date of delivery of the means of transport to Estonia.

(5)       A person specified in clause 3 (6) 4) of this Act shall pay value added tax pursuant to the procedure for payment of excise duty provided for in the Alcohol, Tobacco and Fuel Excise Duty Act.

(51)      A person specified in clause 3 (6) 5) of this Act shall present the particulars of the goods on a customs declaration form and shall pay value added tax pursuant to the procedure provided by the customs rules, taking account of necessary differences.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(6)       Value added tax shall be paid into the state budget.

(7)       The procedure for the payment of value added tax upon intra-Community acquisition of a new means of transport by a person who is not registered as a taxable person or taxable person with limited liability shall be established by a regulation of the Minister of Finance.

 

Chapter 5

Specific Provisions Concerning Taxation

 

§ 39. Tax incentives applicable to foreign missions, diplomats, Community institutions and armed forces of foreign states

(1)       Value added tax shall not be imposed on the import of goods which are necessary for foreign diplomatic representatives, consular agents (except honorary consuls), representatives or representations of special missions or international organisations recognised by the Ministry of Foreign Affairs, diplomatic representations or consular posts of foreign states, special missions or Community institutions or for members of the administrative staff of such representations, posts or special missions, except for the administrative staff of Community institutions. Upon acquisition of such goods, except foodstuffs, or services in Estonia, value added tax paid on such goods or services shall be refunded on the basis of an invoice meeting the requirements of § 37 of this Act if, according to the invoice, the total value of the goods and services, inclusive of value added tax, is at least 1000 kroons. In the case of public utility services, telecommunications services and fuel within the meaning of the Liquid Fuel Act (RT I 2003, 21, 127), value added tax shall also be refunded if the value of the goods or services is less than 1000 kroons. Community institutions shall also be refunded for the value added tax paid on acquisition of food products.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(2)       Value added tax shall not be imposed on the import of goods which are necessary for the armed forces of NATO Member States, except Estonia, or for the civilian staff accompanying them or for members thereof when such forces are taking part in the common defence effort. Upon acquisition of such goods or services in Estonia, value added tax paid on such goods or services shall be refunded on the basis of an invoice meeting the requirements of § 37 of this Act. The tax incentives specified in this subsection apply to the armed forces and civilian staff of other foreign states and to members thereof, international military headquarters and international military educational institutions if so provided by an international agreement ratified by the Riigikogu3.

(3)       The procedure for and conditions of exemption from value added tax of goods imported to meet the needs of the representations, posts, special missions and institutions specified in subsection (1) of this section and the armed forces and civilian staff and the members thereof and the headquarters and educational institutions specified in subsection (2) of this section and the procedure and conditions for the refund of value added tax shall be established by a regulation of the Government of the Republic. The format of applications for the refund of value added tax paid on goods acquired in Estonia shall be established by a regulation of the Minister of Finance.

(4)       On the proposal of the Minister of Foreign Affairs, exceptions to the provisions of subsection (1) of this section may be made on the basis of the principle of reciprocity by a regulation of the Government of the Republic.

(5)       The right of a representation, post, special mission, institution or natural person specified in subsection (1) of this section to apply for exemption from or a refund of value added tax shall be approved by an official authorised by the Minister of Foreign Affairs.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(6)       The right of the armed forces and civilian staff and the members thereof and the headquarters and educational institutions specified in subsection (2) of this section to apply for exemption from or a refund of value added tax shall be approved by the Minister of Defence.

 

§ 40. Special arrangements for imposing value added tax on travel services

(1)       Special arrangements for imposing value added tax on travel services are applicable to taxable persons who, acting in their own name, provide services directly related to travel (hereinafter travel services) to travellers, including legal persons and agencies, and use goods acquired and services received from other Estonian or foreign persons engaged in business in the provision of travel services.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(2)       The special arrangements need not be applied to taxable persons who, acting in their own name, provide travel services to other Estonian or foreign taxable persons for resale.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(3)       The place of supply of travel services subject to value added tax under the special arrangements is Estonia. The place of supply of travel services is not Estonia if the services used in the provision of travel services are received from another taxable person or person engaged in business and if the other person provides the services in a third country. If a part of travel services is provided in a third country, Estonia shall not be deemed to be the place of supply of those travel services which are related to the services provided in the third country.

(4)       The taxable value of travel services subject to the special arrangements shall be the difference between the total amount to be paid for the services to a taxable person by the recipient of the services and the total cost, inclusive of value added tax, to the taxable person of goods acquired and services received from other taxable persons or persons engaged in business where these transactions are for the direct benefit of the recipient of the services, and the difference shall then be reduced by the value added tax contained therein.

(5)       On the basis of a reasoned written application from a taxable person, the tax authority may grant permission to the taxable person to use, when calculating the taxable value of travel services, the average margin of the calendar year prior to the provision of the services. The margin is the proportion of the total cost, inclusive of value added tax, to a taxable person of goods acquired and services received from other taxable persons for the direct benefit of the recipient of the services to the total amount to be paid for the services to the taxable person by the recipient of the services. If the taxable person uses, with the permission of the tax authority, the average margin of the calendar year prior to the provision of the travel services in the calculation of the taxable value of the travel services, the taxable person shall use the margin until the end of the calendar year and adjust the taxable value of the travel services at the end of the calendar year for the entire calendar year, proceeding from the taxable value of the travel services calculated pursuant to subsection (4) of this section.

(6)       If a taxable person applies the special arrangements, the taxable person shall not be entitled to the right to deduct from value added tax calculated pursuant to subsection (4) or (5) of this section input value added tax paid by the taxable person to another taxable person upon the acquisition of goods or receipt of services for the direct benefit of the recipient of the services.

(7)       A taxable person shall treat all services provided and goods transferred to a recipient of travel services pursuant to the special arrangements as a single travel service.

(8)       If a taxable person applies the special arrangements, the taxable person shall not indicate the amount of value added tax paid upon the acquisition of goods or the receipt of services or calculated on the taxable value determined pursuant to subsection (4) or (5) of this section on an invoice issued for travel services subject to the special arrangements.

(9)       If a taxable person provides both travel services subject to the special arrangements and services not subject to the special arrangements, the taxable person is required to keep separate records for travel services subject to the special arrangements and goods acquired or services received therefor and of other services not subject to the special arrangements and goods acquired or services received therefor.

(10)     Zero per cent value added tax rate shall be applied to travel services if, upon providing the services, intra-Community transport services for passengers is used. Where other services are also provided as a part of travel services, 0 per cent value added tax rate shall be applied to the travel services to the extent connected to the intra-Community transport services for passengers.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(11)     The procedure for adjustment, by taxable persons using an average margin, of the taxable value of travel services shall be established by a Regulation of the Minister of Financial Affairs.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

 

§ 41. Special arrangements for imposing value added tax on resale of second-hand goods, original works of art, collectors’ items and antiques

(1)       If a taxable person acquires second-hand goods, original works of art, collectors’ items or antiques with a view to resale and does not use the goods, the taxable person may, upon resale, apply the procedure for the calculation of taxable value provided for in subsection (3) of this section on the condition that the taxable person acquired the goods:

1)         from a person of Estonia or another Member State who is not a taxable person;

2)         from a taxable person of Estonia or another Member State who did not add value added tax to the price of the goods upon transfer of the goods and who could not deduct input value added tax paid upon acquisition of the goods;

3)         from a taxable person of Estonia or another Member State, in so far as the resale of second-hand goods, original works of art, collectors’ items or antiques by that other taxable person was subject to value added tax in accordance with the special arrangements provided for in this section.

(2)       “Second-hand goods” means movables which have been used and which are suitable for further use as they are or after repair, other than original works of art, collectors’ items or antiques and other than precious metals or precious stones. “Original works of art” means the goods referred to in Annex I (a) of the Sixth Directive, although taxable persons shall have the option of not considering the items mentioned in the final three indents in Annex I (a) of the Sixth Directive as “original works of art”. “Collectors’ items” means philately items (CN code 9704 00 00) and collections and collectors’ pieces of zoological, botanical, mineralogical, anatomical, historical, archaeological, palaeontological, ethnographic or numismatic interest (CN code 9705 00 00). “Antiques” means objects which are more than 100 years old (CN code 9706 00 00).

(3)       In the case of the resale of second-hand goods, original works of art, collectors’ items or antiques, the taxable value of supply shall be the difference between the sales price and purchase price of the goods which has been reduced by the value added tax contained therein.

(4)       If a taxable person applies the procedure for the calculation of taxable value set out in subsection (3) of this section, the taxable person shall not indicate the amount of value added tax paid upon the acquisition of goods or calculated on the taxable value determined pursuant to subsection (3) of this section on an invoice or other sales document issued.

(5)       If a taxable person has notified the tax authority accordingly, the person may also resell the following goods under the procedure for calculating taxable value provided for in subsection (3) of this section:

1)         original works of art, collectors’ items and antiques imported by the person;

2)         original works of art sold to the taxable person by the author or the copyright holder.

(6)       If a taxable person utilises the option specified in subsection (5) of this section, the taxable person shall observe the procedure for calculating taxable value provided for in subsection (3) of this section upon the resale of the goods specified in subsection (5) for at least two calendar years as of taking up the option specified in subsection (5).

(7)       In the case of original works of art, collectors’ items or antiques imported by a taxable person, the taxable value calculated pursuant to subsection 13 (1) of this Act plus the value added tax calculated on the taxable value is deemed to be the purchase price.

(8)       A taxable person does not have the right to deduct value added tax paid by the person upon acquisition of goods from a taxable person who sold the goods under the procedure for calculating taxable value provided for in subsection (3) of this section from the calculated value added tax.

(9)       A taxable person does not have the right to deduct value added tax pursuant to the procedure for calculating taxable value provided for in subsection (3) of this section upon the taxation of supply effected by the taxable person, where the person paid the value added tax on the following:

1)         the import of original works of art, collectors’ items or antiques;

2)         the acquisition of original works of art from the author or the copyright holder.

(10)     A taxable person is required, under the procedure for calculating taxable value provided for in subsection (3) of this section, to keep separate records of the acquisition and transfer of goods transferred. A taxable person must have documents certifying the acquisition of goods from a person specified in subsection (1) of this section and the compliance of the goods with the criteria set out in subsection (2) of this section.

 

§ 42. Special arrangements for imposing value added tax on sale of second-hand goods, original works of art, collectors’ items and antiques at public auctions

(1)       In the case of the sale of second-hand goods, original works of art, collectors’ items or antiques at a public auction, the taxable value of the supply of the organiser of the auction shall be the difference between the sales price and the price paid to the principal which has been reduced by the value added tax contained therein.

(2)       The sales price of the goods is the amount paid by the purchaser to the organiser of the auction on the basis of an invoice or other sales documents issued by the organiser. The sales price of the goods shall include the price of the goods at the public auction and other amounts payable by the purchaser of the goods to the organiser of the auction in connection with the acquisition of the goods.

(3)       The price payable to the principal shall be equal to the difference between the price of the goods at the public auction and the commission obtained or to be obtained by the organiser of the public auction from the principal under the contract.

(4)       The organiser of a public auction shall not indicate the amount of value added tax calculated on the taxable value determined pursuant to subsection (1) of this section on an invoice or other sales document issued to a purchaser.

(5)       The procedure for calculating taxable value provided for in subsection (1) of this section shall be applicable if the organiser of the public auction acts on the basis of a commission contract concluded with a person specified in clauses 41 (1) 1)-3) of this Act, whereby commission is payable on the sale of goods at the public auction.

(6)       A taxable person acting as an organiser of an auction to whom goods are delivered under a contract specified in subsection (5) of this section shall issue a statement to the principal of the person setting out the price of the goods at the public auction and the amount representing the price of the goods at the public auction less the commission payable by the principal. The statement shall also serve as an invoice issued by the principal to the organiser of the public auction.

 

§ 43. Special arrangements for imposing value added tax on electronically supplied services

(1)       Special arrangements for imposing value added tax (hereinafter special arrangements) may be applied to electronically supplied services on the condition that the services are provided by a taxable person of a third country who is not registered as a taxable person in any of the Member States (hereinafter third country taxable person) to a person of a Member State who is not registered as a taxable person or taxable person with limited liability.

(2)       A third country taxable person who has opted for the application of the special arrangements shall apply the special arrangements to all services supplied by the taxable person electronically to persons specified in subsection (1) of this section.

(3)       If a third country taxable person has decided to register in Estonia under the special arrangements, the taxable person shall inform the tax authority, using electronic means, when activity as a taxable person is to commence, cease or change to the extent that the person no longer qualifies for the special arrangements.

(4)       In order to register, a third country taxable person shall submit the following obligatory details for identification to the tax authority using electronic means:

1)         name and address;

2)         e-mail address or addresses;

3)         website addresses;

4)         registration number as a taxable person in the home country, if any;

5)         a statement confirming that the person is not registered as a taxable person in any of the Member States.

(5)       A third country taxable person shall notify the tax authority electronically of any changes in the information submitted to the tax authority pursuant to subsections (3) and (4) of this section.

(6)       The tax authority shall allocate a registration number to the third country taxable person and shall notify the taxable person by electronic means of the registration number allocated thereto.

(7)       The tax authority shall exclude the third country taxable person from the register if:

1)         the third country taxable person notifies that the person no longer supplies electronic services, or

2)         it becomes evident that the taxable activities of the third country taxable person have ended or the person no longer fulfils the requirements necessary to be allowed to apply the special arrangements, or

3)         the third country taxable person persistently fails to comply with the rules concerning the special arrangements.

(8)       A third country taxable person shall submit by electronic means to the tax authority a value added tax return concerning electronically supplied services for each calendar quarter. A value added tax return concerning electronically supplied services shall be submitted by the twentieth day of the month following a quarter. A third country taxable person shall pay the amount of value added tax due by the date of submission of the value added tax return. The list of information to be submitted in value added tax returns concerning electronically supplied services shall be established by a regulation of the Minister of Finance.

(9)       A third country taxable person shall not deduct value added tax paid upon the acquisition of goods or the receipt of services in the Community from the value added tax to be paid by the person as input value added tax, but has the right to be granted a refund by the Member State concerned (§ 35).

(10)     A third country taxable person shall keep records of the transactions covered by the special arrangements in sufficient detail to enable the tax authority of the home Member State of the recipient of the services to determine that the information entered in the value added tax return is correct. These records shall be made available electronically on the request of the tax authority or the tax authority of the Member State in which the recipient of the services is established. These records shall be maintained for a period of ten years from the end of the year when the transaction was carried out.

(11)     A third country taxable person who has opted for the special arrangements may not designate a tax representative.

 

§ 44. Special arrangements for imposing value added tax on sole proprietors

(1)       A sole proprietor may treat the date on which an act specified in clause 11 (1) 2) or 3) of this Act is performed as the time of supply. The sole proprietor shall inform the tax authority about his or her using this option in writing upon registration as a taxable person or during the taxable period prior to taking up the option or earlier and shall indicate in a written notice the taxable period from which the sole proprietor will commence using the option.

(2)       If a sole proprietor who uses the option transfers goods free of charge, the date on which the goods are dispatched or made available to the purchaser shall be the time of supply.

(3)       A sole proprietor who uses the option is entitled to the deduction of input value added tax on goods acquired or services received after full or partial payment for the goods or services to the extent in which the goods or services are paid for.

(4)       If, for reasons independent of the sole proprietor, goods acquired or services provided are not paid for within the two taxable periods following the date on which the goods were dispatched or made available or the services were provided, the first day of the third taxable period shall be the time of supply.

(5)       A sole proprietor has the right discontinue using the option in which case he or she shall notify the tax authority thereof in writing during the taxable period prior to applying the general conditions set out in subsection 11 (1) of this Act or earlier.

 

§ 441. Tax warehousing

(1)       Tax warehousing means placing the goods specified in Annex J of the Sixth Directive in a place approved by the tax authority for the purpose of application of value added tax incentives. A tax warehouse is a place where tax warehousing is carried out.

(2)       The keeper of a tax warehouse must provide security in order to guarantee performance of tax obligations which may arise with regard to the goods stored in the tax warehouse. The security shall be given, released, used and calculated pursuant to the procedure concerning the security prescribed by the customs rules for customs warehouses, taking account of the differences regarding tax warehouses.

(3)       A permit issued by the tax authority is required for operating a tax warehouse. A person wishing to operate a tax warehouse shall submit a written application containing the information necessary for obtaining a permit for operating a tax warehouse.

(4)       The tax authority shall issue a permit for operating a tax warehouse if the following conditions are met:

1)         the accounting of the applicant enables the tax authority to check the activities of the applicant;

2)         the applicant keeps accurate accounts concerning the movement of the goods;

3)         the applicant has no tax arrears;

4)         the applicant has submitted accurate data to the tax authority;

5)         the application is economically justified.

(5)       The tax authority may refuse to issue a permit for operating a tax warehouse if, within a period of six months before the date of submission of the application, the applicant has been punished for a misdemeanour provided by §§ 152, 154 or 156 of the Taxation Act, or the applicant has committed a criminal offence specified in §§ 386–390 of the Penal Code if information concerning the punishment has not been expunged from the punishment register.

(6)       The keeper of a tax warehouse shall keep stock records of all the goods admitted in the tax warehouse in a form approved by the tax authority. Goods shall be entered in the warehouse stock records without delay after the relevant person brings the goods in the tax warehouse. The stock records must enable the tax authority to identify the goods, and must record the transactions carried out with the goods as well as the movements of the goods.

(7)       The goods are deemed to be admitted in the tax warehouse after they have been entered in the warehouse stock records. Tax warehousing is deemed to be terminated after the goods have been deleted from the warehouse stock records.

(8)       If as the result of processing, goods no longer belong to the list specified in Annex J to the Sixth Directive, the tax warehousing of the goods shall be immediately terminated.

(9)       Goods which are admitted in a tax warehouse may be transferred to another tax warehouse without suspending the tax warehousing. The keeper of the sending tax warehouse is liable for the performance of the tax obligation until the goods are entered in the stock records of the other tax warehouse. If goods are unlawfully taken out of the place prescribed for tax warehousing, the keeper of the tax warehouse and the person who took the goods out shall bear solidary liability for the performance of the tax obligation provided in clause 3 (6) 5) of this Act.

(10)     Goods missing from a tax warehouse are deemed to be goods unlawfully taken out of the place prescribed for tax warehousing. Upon comparing the results of measurements of liquids or bulk with the data submitted concerning such goods, the tax authority may consider the measurement uncertainty of the measurement process. If goods are lost to an extent which exceeds the measurement uncertainty, the warehouse keeper must prove to the tax authority that the loss occurred by virtue of unforeseeable circumstances, a natural process or the particular nature of the goods.

(11)     The tax authority may suspend a permit for operating a tax warehouse for up to two calendar months and set a term for elimination of the differences based on which the permit was suspended, for compliance with the requirements of the tax authority or for taking the goods out of the tax warehouse, if:  

1)         within a period of six months before the date of suspension of the permit, the warehouse keeper has been punished for a misdemeanour provided by §§ 152, 154 or 156 of the Taxation Act or the warehouse keeper has committed a criminal offence specified in §§ 386–390 of the Penal Code;

2)         the warehouse keeper has tax arrears;

3)         false information has been submitted upon application for the permit;

4)         the operation of the tax warehouse does not conform to the requirements for operating a tax warehouse;

5)         the obligation to provide a tax warehouse security has not been performed.

(12)     A permit for operating a tax warehouse shall be invalidated on the basis of a written application of the warehouse keeper or on the initiative of the tax authorities. The tax authority may revoke a permit if:

1)         the permit was suspended prior to revocation on the grounds specified in clause 11 1) of this section;

2)         the warehouse keeper fails to eliminate the circumstances underlying the invalidation of the permit within the specified term.

(13)     The requirements for tax warehouses and the procedure for the issue, suspension and invalidation of a permit for operating a tax warehouse, and the procedure for the storage and transport of the goods admitted to a tax warehouse shall be established by a regulation of the Minister of Financial Affairs.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

 

Chapter 6

Final Provisions

 

§ 45. Taxation of supply based on contracts entered into before entry into force of this Act

(1)       This Act also applies to the taxation of supply which is based on contracts entered into before the entry into force of this Act if the actual supply is effected after the entry into force of this Act.

(2)       In the following cases, supply is deemed to have been effected during the time governed by the Value Added Tax Act (RT I 2001, 64, 368; 88, 531; 102, 669; 2002, 11, 60; 30, 177; 44, 284; 62, 377; 84, 493; 90, 521; 110, 658; 2003, 18, 104; 48, 344) in force until the entry into force of this Act:

1)         if supply is created pursuant to the Value Added Tax Act in force until the entry into force of this Act prior to the entry into force of this Act but, pursuant to this Act, upon the entry into force of this Act or later;

2)         if supply is created pursuant to the Value Added Tax Act in force until the entry into force of this Act upon the entry into force of this Act or later but, pursuant to this Act, prior to the entry into force of this Act. In both cases, the taxable person shall perform any obligations relating to value added tax pursuant to the Value Added Tax Act in force until the entry into force of this Act.

 

§ 46. Implementation of Act

(1)       Persons who have been registered as taxable persons on the basis of the Value Added Tax Act in force until the entry into force of this Act and who have not been deleted from the register are deemed to be taxable persons as of the entry into force of this Act. Taxable persons who have been registered as a single taxable person on the basis of the Value Added Tax Act in force until the entry into force of this Act and the decision concerning whose registration as a single taxable person has not been annulled are deemed to be a single taxable person as of the entry into force of this Act.

(2)       A person specified in subsection (1) of this section shall submit a value added tax return and pay value added tax for the taxable period prior to the entry into force of this Act pursuant to the procedure prescribed by the Value Added Tax Act in force prior to the entry into force of this Act.

(3)       Value added tax shall not be imposed on the transfer of construction works and land under construction works before the commencement of use of the construction works, if the construction commenced prior to the entry into force of this Act, and on the transfer of plots if there are no construction works thereon and the plots of land were acquired prior to the entry into force of this Act (clause 16 (2) 3)).

(4)       If a taxable person notified the tax authority prior to 1 January 2004 in writing of the person’s wish that the supply of the person’s dwelling or services of leasing a dwelling or supply of costs relating to land tax and building insurance demanded by the person as the lessor of a dwelling from the recipient of the service be taxed, taxation of such supply may continue until 1 May 2014.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

(5)       The period for the recalculation of input value added tax (§ 32) on immovables which a taxable person has been using for business for less than five calendar years upon the entry into force of this Act shall be extended to ten calendar years as of the commencement of use of the immovables for business. The number of calendar years from the commencement of use of the immovables for business until the entry into force of this Act shall be multiplied by two upon calculation of the recalculation period.

(6)       The right to apply an exemption from value added tax or the 0 per cent value added tax rate granted by the tax authority pursuant to § 31 of the Value Added Tax Act in force until the entry into force of this Act shall be valid even if the transaction or act to which the decision of the tax authority pertains is performed after the entry into force of this Act. Value added tax paid on goods or services until the entry into force of this Act shall be refunded under the conditions and pursuant to the procedure established on the basis of § 31 of the Value Added Tax Act in force until the entry into force of this Act.

(7)       The provisions of the Value Added Tax Act in force until the entry into force of this Act apply to the transfer of goods pursuant to a capital lease contract entered into prior to the entry into force of this Act on the condition that the goods have been transferred into the possession of the contractual user of the goods prior to the entry into force of this Act.

(8)       The use for purposes other than business purposes of automobiles, upon the acquisition of which the taxable person partially deducted input value added tax pursuant to subsection 21 (2) of the Value Added Tax Act in force until the entry into force of this Act or pursuant to analogous provisions of an earlier Value Added Tax Act, shall not be taxed as self-supply.

(9)       If services are provided to a third country person on the basis of a contract for the hiring or leasing of or establishment of a usufruct on a means of transport, except automobiles, concluded prior to the entry into force of this Act, the provisions of the Value Added Tax Act in force until the entry into force of this Act apply to the provision of such services on the condition that the means of transport has been transferred into the possession of its contractual user prior to the entry into force of this Act.

(10)     The provisions of the Value Added Tax Act in force until the entry into force of this Act apply to Community goods or goods in free circulation in the Czech Republic, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia or the Slovak Republic (hereinafter acceding countries) which are transported to Estonia and on the export of which customs formalities are completed in the Community or the acceding country prior to the entry into force of this Act until value added tax is paid on the import of the goods.

(11)     If a person does not have the right to deduct input value added tax and cannot apply for a refund of value added tax on the basis of subsection 35 (1) of this Act, value added tax paid upon the import of goods covered by the temporary importation procedure with total relief from import duties shall be refunded to the person as of the entry into force of this Act, on the condition that the person proves that earlier export of the goods from a Member State of the Community or an acceding country has not given rise to the application of the 0 per cent value added tax rate, an exemption from value added tax or a refund of value added tax.

(12)     If goods which are undergoing the outward processing procedure in the Community or an acceding country upon the entry into force of this Act are transported into Estonia under customs supervision, the provisions of the Value Added Tax Act in force until the entry into force of this Act apply to the goods until value added tax is paid on the import of the goods.

(13)     If Estonian goods which were transported to a Member State of the Community or an acceding country for purposes which comply with the purposes of applying the temporary importation procedure with total relief from import duties prior to the entry into force of this Act are transported into Estonia under customs supervision, the provisions of the Value Added Tax Act in force until the entry into force of this Act apply to the goods until the goods are imported.

 

§ 47. Amendment of Taxation Act

The Taxation Act (RT I 2002, 26, 150; 57, 358; 63, 387; 99, 581; 110, 660; 111, 662; 2003, 2, 17, 48, 341; 71, 472) is amended as follows:

1)         section 81 is added to the Act worded as follows:

Ҥ 81. Tax representative of non-resident

(1)       The tax representative of a non-resident (hereinafter tax representative) is a person to whom a corresponding activity licence has been issued by the tax authority for state taxes and whom a non-resident may authorise to represent the non-resident for the performance of the obligations arising in Estonia from a Act concerning a tax or from this Act. A legal person founded in Estonia or a branch of a foreign legal person entered in the Estonian commercial register may act as a tax representative.

(2)       All the rights and obligations of a registered taxable person who is a non-resident extend to the tax representative. The tax representative is required to ensure that the principal’s monetary and non-monetary obligations arising from this Act or an Act concerning a tax are performed within the set term and in full.

(3)       A tax representative shall submit an application to the tax authority for state taxes to be issued with an activity licence of a tax representative wherein the following details are indicated concerning the tax representative:

1)         name and address;

2)         registration number;

3)         area of activity and place of business.

(4)       A tax representative must be solvent and have an impeccable reputation. A tax representative must not have tax arrears. A tax representative shall submit security at the request of the tax authority.

(5)       The tax authority shall decide on the grant of an activity licence of a tax representative within twenty calendar days as of the receipt of an application. When deciding on the grant of an activity licence, the person’s compliance with the requirements specified in subsection (4) of this section shall be verified. The tax authority may take the person’s performance of earlier obligations arising from Acts concerning taxes into consideration. The tax authority may request that the applicant furnish proof concerning the applicant’s financial situation in order to verify the applicant’s solvency.

(6)       The tax authority may suspend or revoke an activity licence if bankruptcy or liquidation proceedings have been initiated against the tax representative, if the tax representative violates the obligations specified in subsection (2) of this section or if the tax representative does not meet the requirements specified in subsection (4) of this section.

(7)       The tax authority shall publish a list of tax representatives on its website.”;

2)         clause 5) is added to subsection 17 (2) worded as follows:

“5)       tax representatives.”;

3)         clause 5) is added to subsection 21 (2) worded as follows:

“5)       if a tax representative has been designated, the written agreement between the tax representative and the non-resident.”;

4)         clause 4) is added to subsection 21 (4) worded as follows:

“4)       if a tax representative has been designated, the written agreement between the tax representative and the non-resident.”;

5)         subsection 22 (2) is amended and worded as follows:

“(2)      A copy of the articles of association or another document regulating the activities of the non-resident employer shall be appended to an application if such document is required. A document certifying the authorisation of the person representing the employer, a specimen signature of the person which is notarised or officially certified by the tax authority and, if a tax representative has been designated, the written agreement between the tax representative and the non-resident shall also be submitted.”;

6)         section 40 is amended and worded as follows:

Ҥ 40. Liability of legal representative, administrator of assets and tax representative

(1)       If a legal representative, manager or administrator of assets violates the obligations specified in § 8 of this Act intentionally or due to gross negligence, the legal representative, manager or administrator of assets and the taxable person shall be solidarily liable for the tax arrears incurred as a result thereof.

(2)       A tax representative and the taxable person shall be solidarily liable for tax arrears incurred as a result of failure to perform the obligations provided for in § 81 of this Act.

(3)       If several persons are liable pursuant to subsection (1) of this section, they shall be solidarily liable for the performance of the obligations.”

 

§ 48. Amendment of Value Added Tax Act

The Value Added Tax Act (RT I 2001, 64, 368; 88, 531; 102, 669; 2002, 11, 60; 30, 177; 44, 284; 62, 377; 84, 493; 90, 521; 110, 658; 2003, 18, 104; 48, 344) is amended as follows:

1)         subsection 5 (4) is amended and worded as follows:

“(4)      Clause (2) 5) of this section applies until 31 December 2003.”;

2)         section 33 is repealed.

 

§ 49. Repeal of earlier Value Added Tax Act

The Value Added Tax Act (RT I 2001, 64, 368; 88, 531; 102, 669; 2002, 11, 60; 30, 177; 44, 284; 62, 377; 84, 493; 90, 521; 110, 658; 2003, 18, 104; 48, 344) is repealed.

 

§ 50. Entry into force of Act

(1)       This Act enters into force as of Estonia’s accession to the European Union.

(2)       Section 48 of this Act enters into force on 1 January 2004.

(3)       Clauses 10 (2) 8) and 9) of this Act apply until 30 June 2006.

(4)       The special arrangements provided for in § 43 of this Act are applicable until 30 June 2006.

(5)       Subsection 40 10) of this Act applies until 31 December 2007.

(07.12.2005 entered into force 01.01.2006 – RT I 2005, 68, 528)

 

1 Sixth Council Directive 77/388/EEC on the harmonization of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ L 145, 13.06.1977, pp. 1–40);

Eighth Council Directive 79/1072/EEC on the harmonization of the laws of the Member States relating to turnover taxes – Arrangements for the refund of value added tax to taxable persons not established in the territory of the country (OJ L 331, 27.12.79, pp. 11-19);

Thirteenth Council Directive 86/560/EEC of 17 November 1986 on the harmonization of the laws of the Member States relating to turnover taxes – Arrangements for the refund of value added tax to taxable persons not established in Community territory (OJ L 326, 21.11.86, pp. 40-41);

Council Directive 2001/115/EC amending Directive 77/388/EEC with a view to simplifying, modernizing and harmonizing the conditions laid down for invoicing in respect of value added tax (OJ L 15, 17.01.2002, pp. 24–28);

Council Directive 2003/92/EC amending Directive 77/388/EEC as regards the rules on the place of supply of gas and electricity (OJ L 260, 11.10.2003, pp. 8–9).

2 RT = Riigi Teataja = State Gazette

3 Riigikogu = the parliament of Estonia

 Source: http://www.legaltext.ee/text/en/X70060K3.htm

Estonian Taxation Act

Taxation Act1

Passed 20 February 2002

(RT2 I 2002, 26, 150),

entered into force 1 July 2002,

amended by the following Acts:

20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193;

17.02.2005 entered into force 09.03.2005 – RT I 2005, 13, 66;

23.11.2004 entered into force 01.01.2005 – RT I 2004, 84, 569;

18.11.2004 entered into force 01.01.2005 – RT I 2004, 84, 568;

28.06.2004 entered into force 01.03.2005 – RT I 2004, 56, 403;

20.05.2004 entered into force 27.05.2004 – RT I 2004, 45, 319;

14.04.2004 entered into force 01.05.2004 – RT I 2004, 30, 208;

14.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 189;

13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188;

17.12.2003 entered into force 05.02.2004 – RT I 2004, 2, 7;

17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591;

10.12.2004 entered into force 01.05.2004 – RT I 2003, 82, 554;

22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472;

11.06.2003 entered into force 07.07.2003 – RT I 2003, 48, 341;

04.12.2002 entered into force 01.04.2003 – RT I 2003, 2, 17;

11.12.2002 entered into force 01.01.2003 – RT I 2002, 111, 662;

18.12.2002 entered into force 31.12.2002 – RT I 2002, 110, 660;

19.11.2002 entered into force 10.12.2002 – RT I 2002, 99, 581;

19.06.2002 entered into force 01.09.2002 – RT I 2002, 63, 387;

12.06.2002 entered into force 01.09.2002 – RT I 2002, 57, 358.

 

Chapter 1

General Provisions

 

Division 1

Definitions Used in Act

 

§ 1. Scope of application of Act

(1)        This Act specifies the rights, obligations and liability of tax authorities and taxable persons, the procedure for tax proceedings and the procedure for the resolution of tax disputes.

(2)        The provisions of this Act apply to all state taxes unless specific rules are prescribed in an Act concerning a tax.

(3)        The provisions of this Act apply to the duties payable upon import or export of goods unless otherwise provided for in the customs rules within the meaning of the Customs Act.

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

(4)        The provisions of this Act apply to local taxes insofar as the Local Taxes Act (RT I 1994, 68, 1169; 1996, 49, 953; 1999, 16, 269; 101, 903; 2000, 33, 196; 81, 515; 2001, 11, 49; 2002, 44, 284; 110, 654) does not provide otherwise.

(5)        If this Act or an Act concerning a tax is contrary to an international agreement ratified by the Riigikogu3, the provisions of the international agreement apply in the event of taxation.

 

§ 2. Definition of tax

Tax is a single or periodic financial obligation which is imposed on taxpayers by an Act or a rural municipality or city council regulation issued pursuant to an Act for the performance of the public law functions of the state or local governments or to obtain revenue required therefor and which is subject to performance pursuant to the procedure, in the amount and within the terms prescribed by an Act or a regulation, without direct compensation to taxpayers therefor.

 

§ 3. Tax system

(1)        The tax system in Estonia consists of state taxes provided for in and imposed by Acts concerning taxes and local taxes imposed by a rural municipality or city council in its administrative territory pursuant to law.

(2)        The following are the state taxes:

1)         income tax;

2)         social tax;

3)         land tax;

4)         gambling tax;

5)         value added tax;

6)         customs duty;

7)         excise duties;

8)         heavy goods vehicle tax.

(3)        Local taxes are imposed by a rural municipality or city council regulation in compliance with the conditions provided by the Local Taxes Act.

(4)        The provisions of this Act concerning taxes also apply to contributions to funded pensions and unemployment insurance premiums unless otherwise provided by the Funded Pensions Act (RT I 2001, 79, 480; 2002, 23, 131; 44, 284; 102, 600; 105, 612; 111, 662) or the Unemployment Insurance Act (RT I 2001, 59, 359; 82, 488; 2002, 23, 131; 2002, 44, 284; 57, 357; 61, 375; 89, 511; 111, 663; 2003, 17, 95).

 

§ 4. Acts concerning taxes

(1)        An Act concerning a tax is an Act which provides for a specific tax.

(2)        Taxpayers are required to pay only such state and local taxes as are prescribed by law at the rates and pursuant to the procedure provided for in Acts concerning taxes and in rural municipality or city council regulations.

(3)        The following shall be provided for in an Act concerning a tax:

1)         the name of the tax;

2)         the object of taxation;

3)         the tax rate;

4)         the taxpayers;

5)         the recipient of or place of receipt of the tax;

6)         the due date or term for payment of the tax, and the period of taxation in the case of periodic taxes;

7)         the procedure for calculation and payment of the tax and supplementary obligations accompanying the tax;

8)         tax incentives that are available.

 

§ 5. Tax authorities

(1)        The tax authority for state taxes is the Tax and Customs Board.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(2)        The tax authorities for local taxes are rural municipality and city governments or other rural municipality or city administrative agencies as provided in a tax regulation.

(3)        A rural municipality or city may, pursuant to the provisions of the Local Taxes Act, enter into a contract under public law with the local Tax Board office by which the duties of the tax authority for a local tax are transferred to the regional tax centre of the Tax and Customs Board.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(4)        Rural municipalities and cities may enter into a contract under public law among themselves by which the duties of the tax authority for local taxes of the same type established in the rural municipalities and cities which are party to the agreement are transferred to an administrative agency of one rural municipality or city which is party to the agreement.

 

§ 6. Taxable person

(1)        The following are taxable persons:

1)         taxpayers;

2)         withholding agents;

3)         other persons responsible for the tax liability of a taxpayer or withholding agent pursuant to law or a contract.

(2)        A taxpayer is a natural or legal person, or a state, rural municipality or city agency, who is required to pay tax under the conditions and pursuant to the procedure provided by law and to perform other monetary and non-monetary obligations imposed on the person in connection with the tax liability.

(3)        A withholding agent is a natural or legal person, or a state, rural municipality or city agency, who is required to withhold the amount of tax payable by another person and transfer such amount to the bank account of the tax authority under the conditions and pursuant to the procedure provided by law and to perform other monetary and non-monetary obligations imposed on the person in connection with the obligation to withhold.

(4)        The law may prescribe cases where:

1)         an association of persons or pool of assets without the status of a legal person is treated as a taxpayer or withholding agent;

2)         several legal persons are treated as one taxable person;

3)         a structural unit of a legal person or an enterprise belonging to a legal person is treated as an independent taxable person.

(5)        The state, rural municipalities and cities are not deemed to be taxpayers or withholding agents unless otherwise provided in an Act concerning a tax.

(6)        Foreign state or local government agencies, other institutions in public law and representations of international organisations or co-operation programmes may also be taxpayers or withholding agents.

(7)        The provisions of this Act concerning legal persons apply to state, rural municipality and city agencies and to taxable persons specified in subsections (4) and (6) of this section, unless otherwise provided in respect of such agencies or persons.

 

§ 7. Passive legal capacity and active legal capacity of taxable persons

(1)        The corresponding provisions of the General Part of the Civil Code Act apply to the passive legal capacity, active legal capacity and legal representation of taxable persons in the event of taxation, unless otherwise provided by this Act or an Act concerning a tax.

(2)        The obligations, arising from this Act or an Act concerning a tax, of minors or other natural persons with restricted active legal capacity shall be performed in the name thereof by the legal representatives of such persons. Minors of 15-18 years of age whose active legal capacity has been extended shall perform obligations provided for in this Act or an Act concerning a tax independently if such obligations arise from transactions which the minor may enter into personally.

(3)        The rights and obligations of state, rural municipality and city agencies and taxable persons specified in subsections 6 (4) and (6) of this Act as taxpayers or withholding agents shall be exercised by the heads of such agencies or other authorised persons within the limits of the competence provided by the statutes of the agency, the partnership agreement or other legislation regulating the activities of the taxable person.

 

§ 8. Obligations of legal representative and administrator of assets

(1)        The legal representative of a legal or natural person is required to ensure that the principal’s monetary and non-monetary obligations arising from this Act or an Act concerning a tax are performed within the set term and in full. Monetary obligations shall be performed out of the assets of the principal.

(2)        The manager of a civil law partnership or an association of persons without the status of a legal person or the administrator of a pool of assets without the status of a legal person is required to ensure that the monetary and non-monetary obligations which are related to the assets of the association or pool of assets and which arise from this Act or an Act concerning a tax are performed within the set term and in full. Monetary obligations shall be performed out of the administered assets.

(3)        If an association of persons without the status of a legal person does not have a manager, the obligations specified in subsection (2) of this section shall be performed by the members of the association. A tax authority may address a claim for the performance of an obligation to any member of the association. If the assets of an association of persons without the status of a legal person are administered by a person other than the members of the association or the manager, this person shall perform the tax liabilities related to the assets administered by the person.

(4)        If a pool of assets without the status of a legal person does not have an administrator, the co-owners of the pool of assets shall perform the obligations specified in subsection (2) of this section. A tax authority may address a claim for the performance of an obligation to any co-owner. If the economic benefits (subsection 94 (3)) related to a pool of assets without the status of a legal person are not in the possession of the administrator or the co-owners or if it is impossible to determine the co-owners, the person who has actual control over the things and rights related to the pool of assets shall perform the obligations specified in subsection (2) of this section.

(5)        The obligations provided for in subsections (1) and (2) of this section apply to executors of wills, administrators of estates and, in the absence of an administrator of an estate or executor of a will, successors who have accepted succession or persons who are making an inventory of an estate, bailiffs, compulsory administrators of immovables and other persons on whom the obligation to administer the assets of a taxable person has been imposed pursuant to law.

 

§ 81. Tax representative of non-resident

(1)        The tax representative of a non-resident (hereinafter tax representative) is a person to whom a corresponding activity licence has been issued by the tax authority for state taxes and whom a non-resident may authorise to represent the non-resident for the performance of the obligations arising in Estonia from a Act concerning a tax or from this Act. A legal person founded in Estonia or a branch of a foreign legal person entered in the Estonian commercial register may act as a tax representative.

(2)        All the rights and obligations of a registered taxable person who is a non-resident extend to the tax representative. The tax representative is required to ensure that the principal’s monetary and non-monetary obligations arising from this Act or an Act concerning a tax are performed within the set term and in full.

(3)        A tax representative shall submit an application to the tax authority for state taxes to be issued with an activity licence of a tax representative wherein the following details are indicated concerning the tax representative:

1)         name and address;

2)         registration number;

3)         area of activity and place of business.

(4)        A tax representative must be solvent and have an impeccable reputation. A tax representative must not have tax arrears. A tax representative shall submit security at the request of the tax authority.

(5)        The tax authority shall decide on the grant of an activity licence of a tax representative within twenty calendar days as of the receipt of an application. When deciding on the grant of an activity licence, the person’s compliance with the requirements specified in subsection (4) of this section shall be verified. The tax authority may take the person’s performance of earlier obligations arising from Acts concerning taxes into consideration. The tax authority may request that the applicant furnish proof concerning the applicant’s financial situation in order to verify the applicant’s solvency.

(6)        The tax authority may suspend or revoke an activity licence if bankruptcy or liquidation proceedings have been initiated against the tax representative, if the tax representative violates the obligations specified in subsection (2) of this section or if the tax representative does not meet the requirements specified in subsection (4) of this section.

(7)        The tax authority shall publish a list of tax representatives on its website.

(10.12.2004 entered into force 01.05.2004 – RT I 2003, 82, 554)

 

§ 9. Residence, seat, place of business and permanent establishment

(1)        The terms “residence” and “seat” are used in this Act within the meaning of the General Part of the Civil Code Act.

(2)        A place of business is the place of the permanent and continuous business or professional activities of a person, an association of persons without the status of a legal person or a pool of assets without the status of a legal person.

(3)        A permanent establishment is the place through which, whether in full or in part, the permanent economic activities of a non-resident are carried out in Estonia. Non-residents whose economic activities in Estonia are carried out through an authorised representative pursuant to the provisions of the Income Tax Act (RT I 1999, 101, 903; 2001, 11, 49; 16, 69; 50, 283; 59, 359; 79, 480; 91, 544; 2002, 23, 131; 41, 253; 44, 284; 47, 297; 62, 377; 111, 662; 2003, 18, 105; 58, 387) also have a permanent establishment.

 

Division 2

Principal Obligations of Tax Authority

 

§ 10. Duties of tax authority

(1)        A tax authority shall monitor compliance with this Act and with Acts concerning taxes within the limits of the competence granted to the tax authority by law.

(2)        The duties of a tax authority are:

1)         to verify the correctness of the calculation and payment of taxes and to monitor the payment of taxes and the application of tax incentives in the amount and pursuant to the procedure provided by law;

2)         to calculate and make an assessment of tax and interest due in the cases provided by law and to return overpaid amounts and amounts to be compensated for;

3)         to collect tax arrears;

4)         to impose coercive measures and punishments permitted by law on persons who violate an Act concerning a tax.

(3)        A tax authority shall conduct proceedings in a straightforward and efficient manner without undue delay, avoiding superfluous costs and inconveniences, in compliance with the general principles of administrative proceedings and ensuring that the rights of participants in the proceedings are protected.

 

§ 11. Principle of investigation

(1)        When verifying the correctness of the payment of taxes and making an assessment of tax, a tax authority is required to take into consideration all facts relevant to the matter, including facts which increase and facts which decrease the tax liability.

(2)        A tax authority shall decide on the need to perform acts in order to verify the correctness of the payment of a tax and on the type and extent of the acts and shall collect evidence which is necessary to make a decision in the matter. When ascertaining facts relevant from the point of view of taxation, a tax authority is not only restricted to the requests and evidence submitted by participants in the proceedings.

 

§ 12. Right of discretion

If a tax authority is authorised by law to consider taking a measure or to choose between different measures, the tax authority shall exercise the right of discretion within the limits of its authorisation and in accordance with the general principles of justice, taking into account the relevant facts and weighing up legitimate interests.

 

§ 13. Hearing opinion of taxable person

(1)        A taxable person has the right to submit the opinion and objections of the taxable person to a tax authority before the issue of an administrative act concerning the taxable person’s rights.

(2)        The right specified in subsection (1) of this section need not be ensured for a taxable person:

1)         if prompt action is required to prevent damage arising from delay or to protect the public interests, or

2)         if the tax authority does not deviate from the information provided by the taxable person in an application, request or explanation and there is no need for additional information, or

3)         if the resolution is not made against the taxable person, or

4)         if notification which is necessary to enable opinions or objections to be submitted does not enable the purpose of the administrative act to be achieved, or

5)         in other cases provided by law.

 

§ 14. Providing information to taxable person

(1)        At the request of a taxable person, a tax authority shall provide information concerning taxes to be paid by the taxable person, the procedure for the calculation of amounts of tax and the bases for making an assessment thereof and explanations concerning the completion of tax returns and the submission of challenges or requests.

(2)        If necessary, a tax authority shall explain the rights and obligations of a taxable person in tax proceedings to the taxable person.

(3)        Taxable persons have the right to access information concerning themselves which is collected by tax authorities and to copy or make extracts of such information. A tax authority has the right to refuse to disclose information if disclosure thereof would hinder the ascertainment of the truth in criminal proceedings.

(4)        At the request of a taxable person, a tax authority is required to issue a written certificate to the taxable person or make information electronically available to the taxable person concerning the size of tax arrears of the taxable person and the amounts of tax and interest paid by or returned to the taxable person or set-off, the limitation period for the compulsory execution (§ 132) of which has not expired.

(5)        Taxable persons and other interested persons or agencies have the right to request a certificate concerning the absence of tax arrears from a tax authority. The tax authority is required to issue a certificate concerning the absence of tax arrears if the tax arrears of the taxable person in terms of all taxes administered by the same tax authority do not exceed 100 kroons or if the tax arrears are being paid in instalments.

(6)        A tax authority may make a notation on a certificate specified in subsection (5) of this section stating the person to whom or for submission to whom the certificate is issued and that the taxable person has failed to comply with the obligation to submit a tax return during the year in which the request is submitted or during the preceding year.

(7)        A certificate specified in subsection (5) of this section shall be issued or the issue thereof shall be refused within five working days as of the receipt of a request. The issue of a certificate shall not constitute forgiveness of tax arrears or deprive a tax authority of the right to collect tax arrears.

 

§ 15. Provision of explanations and instructions for Acts concerning taxes

(1)        The Ministry of Finance and tax authority for state tax have the right to provide explanations and instructions in order to explain and publicise this Act and Acts concerning taxes for the purpose of ensuring the uniform application of the Acts.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(2)        The explanations and instructions specified in subsection (1) of this section are not binding on taxable persons.

(3)        The explanations and instructions specified in subsection (1) of this section shall be published on the website of the provider of the explanations and instructions or they shall be published as a periodic printed publication. Publication thereof shall be ensured by the provider of explanations and instructions.

 

§ 151. Processing of the personal identification code

Tax administrator shall, for the performance of his/her duties, have the right to process the personal identification code without the consent of the data subject.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

 

§ 16. Compensation for damage

Damage unlawfully caused to a taxable person or third party by a tax authority shall be compensated for pursuant to the provisions of the State Liability Act (RT I 2001, 47, 260; 2002, 62, 377; 2003, 15, 86).

 

Division 3

Register of Taxable Persons

 

§ 17. Register of taxable persons

(1)        The register of taxable persons (hereinafter register) is a state register as defined in the Databases Act (RT I 1997, 28, 423; 1998, 36/37, 552; 1999, 10, 155; 2000, 50, 317; 57, 373; 92, 597; 2001, 7, 17; 17, 77; 24, 133; 2002, 61, 375; 63, 387; 2003, 18, 107; 26, 158) which is established by the Government of the Republic and maintained in order to ensure the performance of functions imposed on tax authorities by law.

(2)        Information concerning the following persons shall be entered in the register:

1)         taxable persons;

2)         persons who are insurable on the basis of the Social Tax Act (RT I 2000, 102, 675; 2001, 50, 285; 59, 359; 79, 480; 91, 544; 95, 587; 2002, 44, 284; 62, 377; 111, 662);

3)         persons who are insured or who pay or withhold unemployment insurance premiums pursuant to the Unemployment Insurance Act;

4)         obligated persons, persons making contributions and withholding agents for contributions as defined in the Funded Pensions Act;

5)         tax representatives.

(10.12.2004 entered into force 01.05.2004 – RT I 2003, 82, 554)

(21)      In the register of taxable persons, a separate record shall be kept concerning the financial rights and obligations of each taxable person arising from this Act or an Act concerning a tax, and concerning the perfomance the rights and obligations by each taxable person.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

(3)        The chief processor of the register is the Tax and Customs Board.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

 (4)       Information shall be entered in and obtained from the register pursuant to the procedure provided for in the statutes of the register which are approved by the Government of the Republic and in accordance with the provisions of this Division, §§ 27-30 and the Social Tax Act.

 

§ 18. Registration requirement

(1)        The following persons are required to register themselves in the regional tax centre of the Tax and Customs Board prior to the commencement of activities:

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

1)         legal persons who are not to be entered in the commercial register, the non-profit associations and foundations register or the register of religious associations;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

2)         state, rural municipality or city agencies which are not to be entered in the state register of state and local government agencies;

3)         sole proprietors who are not to be entered in the commercial register;

4)         foreign legal persons who or associations of persons or pools of assets without the status of a legal person which are commencing economic activities in Estonia through a permanent establishment which is not entered in the commercial register as a branch.

(11)      The following persons are required to register themselves in the regional tax centre of the Tax and Customs Board within ten days as of the date on which the tax liability arises:

1)         non-resident employers, including sole proprietors, foreign missions, other foreign agencies, international organisations and their representatives if not earlier registered in the register of taxable persons or other register specified in subsection (1) of this section;

2)         patnerships, communities and other associations of persons not having the status of a legal person.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(2)        A regional tax centre of the Tax and Customs Board shall issue a certificate concerning registration wherein information specified in subsection 19 (1), 20 (1), 21 (1) or (3) or § 211 or § 22 of this Act shall be indicated.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

 

§ 19. Registration of legal person and agency

(1)        In order to be registered, a legal person or agency specified in clause 18 (1) 1) or 2) of this Act shall submit an application to the regional tax centre of the Tax and Customs Board of its seat and the following shall be set out in the application:

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

1)         the name and address of the person or agency;

2)         the given name, surname, personal identification code (or, in the absence of a personal identification code, the date of birth) and residence of each member of the management body of the person or agency.

(2)        A copy of the articles of association or partnership agreement of the legal person or another legal act regulating the activities of the legal person shall be appended to the application. Legal persons in public law shall include a reference to the place of publication of the Act which is the basis for their activities. State, rural municipality and city agencies shall add a copy of their statutes or other legal act regulating their activities.

 

§ 20. Registration of sole proprietor

(1)        In order to be registered, a sole proprietor specified in clause 18 (1) 3) of this Act shall submit an application to the regional tax centre of the Tax and Customs Board of his or her residence or place of business and the following shall be set out in the application:

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

1)         the given name and surname of the sole proprietor;

2)         his or her personal identification code (or, in the absence of a personal identification code, his or her date of birth);

3)         his or her residence;

4)         his or her area or areas of activity;

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

5)         his or her place or places of business.

(2)        A sole proprietor whose business is seasonal due to the nature of his or her activities has the right to state the dates on which he or she commences and terminates his or her business activities in the application. The dates of the commencement and termination of business activities may also be stated in the application if the business activities are of temporary nature. In such case, the person is deemed to be a sole proprietor for the purposes of taxation only for the period of time indicated in the application.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

(3)        The obligations provided for in Acts concerning taxes also apply to sole proprietors who have failed to register with the Tax and Customs Board. Unless otherwise provided by an Act concerning a tax, the rights provided for therein extend to such persons as of their entry in the register of taxable persons.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

 

§ 21. Registration of permanent establishment

(1)        In order for the permanent establishment of a foreign legal person specified in clause 18 (1) 4) of this Act to be registered, an application shall be submitted to the regional tax centre of the Tax and Customs Board of the seat of the permanent establishment and the following shall be set out in the application:

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

1)         the name and address of the foreign legal person;

2)         the place of registration and the registration number or another code enabling identification, if such information exists;

3)         the area of activity, place of business and postal address in Estonia of the permanent establishment;

4)         the number of the bank account opened for the permanent establishment and the name of the credit institution in which the bank account is held;

5)         the given name and surname of the person responsible for the permanent establishment, and his or her personal identification code (or, in the absence of a personal identification code, date of birth) and residence.

(2)        The following shall be appended to an application for registration of the permanent establishment of a person specified in subsection (1) of this section:

1)         a copy of the certificate of registration, an extract from the register or other documents certifying the existence of the legal person;

2)         a document certifying the authorisation of the person responsible for the permanent establishment;

3)         a copy of the articles of association or partnership agreement of the legal person, certified according to the laws of the home country, or another document regulating the activities of the legal person if submission of such documents upon registration of a legal person is required in the home country of the legal person;

4)         a specimen signature of the person responsible for the permanent establishment which is notarised or officially certified by a tax authority;

5)         if a tax representative has been designated, the written agreement between the tax representative and the non-resident.

(10.12.2004 entered into force 01.05.2004 – RT I 2003, 82, 554)

(3)        In order for the permanent establishment of a foreign association of persons or a pool of assets without the status of a legal person specified in clause 18 (1) 4) of this Act to be registered, an application shall be submitted to the regional tax centre of the Tax and Customs Board of the seat of the permanent establishment and the following shall be set out in the application:

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

1)         the name and address of the association of persons or pool of assets, if such information exists;

2)         a number or registry code enabling the association of persons or pool of assets to be identified, if such information exists;

3)         the names and addresses of the members of the association of persons or the co-owners of the pool of assets, except in the case specified in clause 4) of this subsection;

4)         the names and addresses of members with management rights, the manager or the administrator of assets if not all the persons specified in clause 3) of this subsection are involved in the management of the association or administration of the pool of assets;

5)         the area of activity, place of business and postal address in Estonia of the permanent establishment;

6)         the number of the bank account opened for the permanent establishment and the name of the credit institution in which the bank account is held;

7)         the given name and surname of the person responsible for the permanent establishment, and his or her personal identification code (or, in the absence of a personal identification code, date of birth) and residence.

(4)        The following shall be appended to an application specified in subsection (3) of this section:

1)         a copy of the document which is the basis for the activities of the association of persons or pool of assets without the status of a legal person;

2)         a specimen signature of the person responsible for the permanent establishment which is notarised or officially certified by a tax authority;

3)         a document certifying the authorisation of the person responsible;

4)         if a tax representative has been designated, the written agreement between the tax representative and the non-resident.

(10.12.2004 entered into force 01.05.2004 – RT I 2003, 82, 554)

 

§ 211. Registration of patnership, community and other association of persons not having the status of a legal person

(1)        In order to register a patnership, community or other association of persons not having the status of a legal person specified in clause 18 (11) 2), an application is submitted to the regional tax centre of the Tax and Customs Board which sets out the following information concerning the patnership, community or other association of persons not having the status of a legal person:

1)         the name and address, if such information exists;

2)         a number or registry code enabling identification, if such information exists;

3)         the names and addresses of the members or co-owners, except in the case specified in clause 4) of this subsection;

4)         the names and addresses of members with management rights, the manager or the administrator of assets if not all the persons specified in clause 3) of this subsection are involved in the management of the association;

5)         the area or areas of activity, place of business and the adress;

6)         the given name and surname of the responsible person and his or her personal identification code (or, in the absence of a personal identification code, date of birth) and residence.

(2)        The following shall be appended to the application specified in subsection (1) of this section concerning the patnership, community or other association of persons not having the status of a legal person:

1)         a copy of a document bing the basis for the activity;

2)         a document certifying the authorisation of the responsible person.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

 

§ 22. Registration of non-resident employers

(1)        In order to register a non-resident employer specified in clause 18 (11) 1), an application is submitted to the regional tax centre of the Tax and Customs Board which sets out the following information:

1)         the name of the non-resident employer;

2)         the postal address of the employer in the home country, if any;

3)         the postal address of the employer in Estonia, if any;

4)         the name and postal address of the person representing the employer;

5)         the signature of the employer or a person authorised by the employer.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(2)        A copy of the articles of association or another document regulating the activities of the non-resident employer shall be appended to an application if such document is required. A document certifying the authorisation of the person representing the employer, a specimen signature of the person which is notarised or officially certified by the tax authority and, if a tax representative has been designated, the written agreement between the tax representative and the non-resident shall also be submitted.

(10.12.2004 entered into force 01.05.2004 – RT I 2003, 82, 554)

(3)        A non-resident employer has the right to be registered in the register of taxable persons also before the tax liability arises by submitting the information and documents listed in subsections (1) and (2) of this section.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

 

§ 23. Giving notification of changes in information

(1)        Persons specified in §§ 18, 211 and 22  of this Act are required to notify the regional tax centre of the Tax and Customs Board of the termination of their activities, liquidation of their permanent establishment and changes in the information specified in §§ 19-21 and §§ 211 and 22  within five working days.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(2)        Persons specified in subsection 20 (2) of this Act need not notify the regional tax centre of the Tax and Customs Board of the commencement or termination of their business activities if the relevant dates were indicated in the application for registration.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(3)        Sole proprietors, including sole proprietors entered in the commercial register, have the right to notify the regional tax centre of the Tax and Customs Board of the suspension of their activities in advance by indicating the period of time for which activities will be suspended in the application. A person is not deemed to be a sole proprietor for the purposes of taxation during a period when the business activities of the person are suspended.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472; 17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

 

§ 24. Making of register entry

(1)        Persons specified in §§ 18 and 22 of this Act shall be entered in the register as on the date of submission of an application or as on a future date indicated in the application. A person specified in subsection 18 (11) may be registered in the register also retroactively by up to ten working days as of the date of the submission of the application.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(2)        Register entries concerning the termination of activities, liquidation of the permanent establishment and changes in other register information regarding persons specified in §§ 18 and 22 of this Act shall be made as on the date specified by the person in the application. If the date specified in the application arrived earlier than five working days previously, the register entry shall be made as on the date of giving notification of the change in the information.

 

§ 25. Refusal to make register entry

(1)        If the information submitted by an applicant is incomplete or inaccurate, the Tax and Customs Board has the right to refuse to make a register entry and:

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

1)         to draw the attention of the applicant to the deficiencies in the application or documents and to set a term for the deficiencies to be eliminated, or

2)         to draw the attention of the applicant to the deficiencies in the application or documents and to return the documents submitted for registration.

(2)        If deficiencies are not eliminated within the term set by the Tax and Customs Board, the application for registration shall be deemed not to have been submitted.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

 

Division 4

Tax Secrecy

 

§ 26. Protection of tax secrecy

(1)        The tax authorities and officials and other staff thereof are required to maintain the confidentiality of information concerning taxable persons, including all media (decisions, acts, notices and other documents) concerning the taxable persons, information concerning the existence of media, business secrets and information subject to banking secrecy, which is obtained by the authorities, officials or other staff in the course of verifying the correctness of taxes paid, making an assessment of taxes, collecting tax arrears, conducting proceedings concerning violations of tax law or performing of other official duties (hereinafter tax secrecy). The obligation to maintain tax secrecy continues after the termination of a service relationship.

(23.11.2004 entered into force 01.01.2005 – RT I 2004, 84, 569)

(2)        Information subject to tax secrecy may only be disclosed with the written permission of the taxable person or in the cases specified in §§ 27-30 of this Act.

(3)        Unless otherwise provided by law, the officials and other public servants employed by the agencies which receive information concerning tax secrecy pursuant to §§ 28-30 of this Act or in the performance of their official duties and persons performing public law functions are required to maintain the confidentiality of any information concerning taxable persons which became known to them concerning the taxable person. The obligation to maintain tax secrecy continues after the termination of a service relationship.

(23.11.2004 entered into force 01.01.2005 – RT I 2004, 84, 569)

 

§ 27. Public information

(1)        The tax authorities may disclose the following information to anyone without the consent of or without having informed a taxable person:

1)         the date on which a taxable person who is registered with the Tax and Customs Board pursuant to the provisions of §§ 18-22 of this Act is entered in or deleted from the register, the area of activity and place of business, the dates of the commencement and termination of the activities of a sole proprietor, in the case of the persons specified in subsections 18 (1) and (11), information concerning of the responsible person and the information specified in subsection 23 (3);

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

2)         the date on which a person liable to value added tax or an excise warehousekeeper is entered in or deleted from the register, and the registration number of the person or warehousekeeper;

3)         information concerning the residency of a taxpayer;

4)         the size of tax arrears;

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

5)         the size of tax arrears to be paid in instalments and the duration of the schedule for payment of the tax arrears;

6)         the judgment in a tax dispute or the decision adopted in the adjudication of a challenge against which an action is not filed during the term for filing an action with a court;

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

7)         information concerning the income of a non-profit association or foundation entered in the list of non-profit associations and foundations, a political party or a university in public law, including the gifts and donations made to such persons, and information concerning the use of the gifts and donations;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

8)         information concerning the submission of a tax return by a taxable person or the failure of a taxable person to do so;

9)         information concerning the gifts and donations made to a person entered in the register of trade unions or a person who owns a hospital, and information on the use of the gifts and donations;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

10)       information on offences if public interest in making such information public outweighs the interest in keeping the information undisclosed, and making the information public does not affect the ascertainment of the truth in criminal or misdemeanour proceedings.

(23.11.2004 entered into force 01.01.2005 – RT I 2004, 84, 569)

(2)        In the case of tax arrears assessed by a tax authority, the tax arrears may be made public after the date for the performance the of notice of assessment or liability decision has arrived. If a notice of assessment or liability decision is contested, a corresponding notation shall be made in the publication notice of the tax arrears. If ań action is field with a court, the notation shall be made at the request of the taxable person or in case the tax authority has become aware of the filing of the action in another manner.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

 

§ 28. Disclosure of information to other tax authorities or recipient of tax

(1)        (Repealed – 17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(2)        The tax authority for a state tax may disclose information which is necessary for verification of the correctness of the calculation and payment of a local tax, assessment of the tax and collection of the tax to the tax authority for the local tax.

(3)        The Tax and Customs Board may disclose information to a rural municipality or city government concerning taxpayers of whose income tax a part is transferred to the corresponding rural municipality or city. The following information may be disclosed:

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

1)         the given name, surname and personal identification code (or in the absence of a personal identification code, the date of birth) of a taxpayer;

2)         declared taxable income;

3)         (Repealed – 20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

4)         the name and personal identification code or registry code of the withholding agent, and the income tax withheld from the taxpayer.

(4)        The tax authority for a local tax may disclose information which is necessary for verification of the correctness of the calculation and payment of a state tax, assessment of the tax and collection of the tax to the tax authority for the state tax.

 

§ 29. Disclosure of information to state, rural municipality and city agencies and to persons performing public law functions

A tax authority may disclose information subject to tax secrecy:

1)         to preliminary investigators and prosecutors for the purposes of preventing and detecting criminal offences, apprehending criminal offenders, investigating or hearing matters subject to criminal proceedings, preparing the court hearing of matters subject to criminal proceedings, conducting security checks and performing other duties provided for in the Security Authorities Act (RT I 2001, 7, 17; 100, 643; 2002, 61, 375; 2003, 23, 147);

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

2)         to persons authorised to conduct proceedings in matters of misdemeanours for the purposes of apprehending offenders, investigating or hearing matters and preparing the hearing of matters;

3)         to courts for the purposes of preparing the hearing of and hearing criminal, civil and administrative matters or misdemeanours, and making decisions;

4)         to bailiffs if the information is necessary for the performance of enforcement actions;

5)         to the Chancellor of Justice for the performance of functions provided for in the Chancellor of Justice Act (RT I 1999, 29, 406; 2000, 92, 597; 2001, 43, 240; 58, 353; 2002, 30, 176; 57, 357; 2003, 20, 119; 23, 142);

6)         to the Minister of Finance in order to estimate tax revenues and plan measures ensuring that taxes are received, and in order to exercise supervisory control over the legality and purposefulness of the activities of the tax authority;

7)         to the Minister of Finance for the performance of functions provided for in Chapter 6 of the Competition Act (RT I 2001, 56, 332; 93, 565; 2002, 61, 375; 63, 387; 82, 480; 87, 505; 102, 600; 2003, 23, 133);

8)         to the Financial Intelligence Unit for the prevention, detection and investigation of money laundering or criminal offences related to money laundering;

9)         to the State Audit Office for the performance of functions provided for in the State Audit Office Act (RT I 2002, 21, 117; 57, 356; 2003, 21, 121);

10)       to the Public Procurement Office for the verification of the qualifications of a tenderer within the meaning of the Public Procurement Act (RT I 2000, 84, 534; 2001, 40, 224; 50, 284; 2002, 23, 131; 47, 297; 61, 375; 63, 387; 87, 505; 99, 577; 2003, 25, 153);

11)       to the Statistical Office for the performance of functions provided for in the Official Statistics Act (RT I 1997, 51, 822; 2000, 47, 289; 2002, 63, 387) when conducting official statistical surveys;

12)       to the Social Insurance Board and pension offices for the award of pensions, benefits and allowances provided for in the Social Welfare Act (RT I 1995, 21, 323; 2001, 98, 617; 2002, 53, 336; 61, 375; 64, 393; 90, 521; 2003, 58, 388), the State Pension Insurance Act (RT I 2001, 100, 648; 2002, 53, 336; 338; 61, 375; 2003, 20, 116; 48, 343), the State Family Benefits Act (RT I 2001, 95, 587; 2002, 61, 375; 2003, 18, 103) and the State Compensation of Victims of Crime Act (RT I 1999, 4, 51; 2001, 12, 50; 100, 648; 2002, 56, 350; 61, 375; 110, 660);

13)       to a rural municipality or city government in connection with the award of a benefit or provision of other material assistance to a natural person;

14)       to the health insurance fund concerning a payer of social tax, an insured person or a person applying for insurance cover or for the verification of the validity of the insurance cover;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

15)       to the Labour Market Board and local offices thereof for the performance of functions provided for in the Unemployed Persons Social Protection Act (RT I 2000, 57, 371; 2001, 59, 359; 2002, 53, 336; 61, 375; 2003, 20, 116) and the Employment Service Act (RT I 2000, 57, 370; 2001, 59, 359; 2002, 61, 375) in connection with the award of state unemployment benefits and the provision of employment services;

16)       to a market supervisory authority for the organisation of supervision over the safety of products and services;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

17)       to the registrar of the commercial register as regards information relating to the card register;

18)       to the Labour Inspectorate for the performance of state supervision over compliance with labour law legislation;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

19)       to the Unemployment Insurance Fund for the grant and payment of unemployment insurance compensation pusuant to law;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

20)       to the Ministry of Economic Affairs and Communications, dumping council and the Government of the Republic for the conduct of anti-dumping investigations and making of decisions on the implementation of anti-dumping measures;

(17.02.2005 entered into force 09.03.2005 – RT I 2005, 13, 66)

21)       to a depositary of declarations of economic interests and persons authorised to verify the declarations for the verification of the correctness of data submitted in a declaration of economic interests in the case of suspicion of corruption;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

22)       to the Financial Supervision Authority for the conduct of financial supervision and inspection of persons according to the functions assigned to the Financial Supervision Authority by law;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

23)       to a legal person in private law for the performance of duties related to the delivery of land tax notices;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

24)       to the ´Ministry of Finance for the performance of the duty of organising state accounting and financial reporting according to the Accounting Act (RT I 2002, 102, 600);

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

25)       to the Strategic Goods Commission for the performance of the functions provided for in the Strategic Goods Act (RT I 2004, 2, 7);

(17.12.2003 entered into force 05.02.2004 – RT I 2004, 2, 7)

26)       to the Citizenship and Migration Board for the performance of the functions provided for in the Aliens Act;

(14.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 189)

27)       to a court or to the Ministry of Finance or an authority within the area of government of the Ministry of Finance which is specified by the Minister of Finance for the performance of functions provided for in the State Legal Aid Act;

(28.06.2004 entered into force 01.03.2005 – RT I 2004, 56, 403)

28)       to an artistic association for the verification of income received by creative persons in connection with the grant of support for creative activity for creative persons engaged in a liberal profession pursuant to the Creative Persons and Artistic Associations Act;

(18.11.2004 entered into force 01.01.2005 – RT I 2004, 84, 568)

29)       to the state company founded for establishment and holding of liquid fuel stocks for the determination of the market share of importers, guaranteeing preparedness for commencement of use of stocks an verification of payment of stockpiling fee based on the Liquid Fuel Stocks Act;

(17.02.2005 entered into force 09.03.2005 – RT I 2005, 13, 66)

30)       to the Agricultural Registers and Information Board, information concerning the payment of social tax by the the number of employees and sums paid for each month for the purpose of monitoring the conformity of grant of support and the use of the support for the intended purpose and performing the duties provided for in the European Union Common Agricultural Policy Implementation Act (RT I 2004, 24, 163; 34, 236; 2005, 5, 16).

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

 

§ 30. Disclosure of information upon provision of international professional assistance

A tax authority may disclose information subject to tax secrecy without the consent of a taxable person:

1)         to the competent bodies of a foreign state in respect of a resident taxpayer in that state concerning  information relevant to tax proceedings under the conditions provided for in an international agreement;

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

2)         to bodies of the European Union and Member States thereof which are competent to exchange information relating to taxable persons pursuant to the procedure prescribed in the legislation of the European Union;

(14.04.2004 entered into force 01.05.2004 – RT I 2004, 30, 208)

3)         (Repealed – 22.100.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

 

Chapter 2

Tax Claims and Liabilities

 

Division 1

General Provisions

 

§ 31. Financial claims and obligations arising from Acts concerning taxes

(1)        The following financial claims and obligations may arise from an Act concerning a tax or from this Act:

1)         the obligation of a taxpayer to pay tax (tax liability);

2)         the obligation of a withholding agent to withhold tax and to pay the withheld amount of tax (obligation to withhold);

3)         the right of a person to be refunded amounts of tax paid which exceed the amounts of tax prescribed by law or other excess payments pursuant to § 33 of this Act (claim for refund);

4)         the obligation of a third party to pay the tax arrears of a taxpayer or withholding agent (tax liability of third party);

5)         the obligation of a taxable person to pay interest or a penalty payment or to reimburse the costs of substitutive enforcement (accessory obligation).

(2)        The claims and obligations specified in subsection (1) of this section arise upon the fulfilment of conditions provided by law, unless it is provided by law that an administrative act of a tax authority is required for an obligation to arise.

(3)        The claims and obligations specified in subsection (1) of this section terminate:

1)         upon payment (§ 105);

2)         upon fulfilment of a claim for refund (§ 106);

3)         upon set-off (§§ 108-109);

4)         upon expiry of the limitation period (subsection 33 (1), § 132);

5)         upon forgiveness of tax arrears (§ 114);

6)         in other cases provided by law.

 

§ 32. Tax arrears

For the purposes of this Act, tax arrears are any amounts of tax which a taxable person has failed to pay by the due date, interest calculated on tax not paid by the due date, or the amount of tax deriving from customs debt unpaid by the due date and the interest calculated thereon.

 

§ 33. Claim for refund

(1)        A taxable person who has paid a greater amount of tax than prescribed by an Act concerning a tax has the right, within three years as of the date on which excess payment occurred, to apply to the tax authority for the overpaid amount to be refunded or set off.

(2)        The right specified in subsection (1) of this section also extends to:

1)         taxable persons who, pursuant to a liability decision, have paid a greater amount of tax than prescribed by law;

2)         taxable persons who have paid more interest, penalty payments, costs of substitutive enforcement or other procedural expenses to a tax authority than prescribed by law;

3)         persons who have the right arising from law to be compensated for an amount of tax or costs or to have an amount of tax or costs refunded to them by a tax authority.

(3)        Claims for refund shall be fulfilled pursuant to §§ 106–109 of this Act.

(4)        If a tax liability or an obligation specified in subsection (2) of this section is reduced as a result of an administrative act being amended or repealed or if the legal basis for the payment of tax ceases to exist for other reasons, the fulfilment of a claim for refund arising therefrom may be requested within three years as of the date on which the obligating administrative act is amended or repealed or the legal basis for the payment of tax ceases to exist.

 

§ 34. Pledging and seizure of claim for refund

(1)        A claim for refund may be subject to seizure or subject to a claim for payment in the course of enforcement proceedings similarly to a financial claim.

(2)        A pledge may be established on a claim for refund pursuant to the procedure provided by law. A taxable person shall submit a written notice to the tax authority concerning the pledging of a claim for refund stating the name and address of the pledgor and the pledgee and the category and amount of the claim for refund which is pledged. The notice shall be signed by the pledgor and the pledgee. Provisions concerning the pledging of proprietary rights apply to the pledging of claims for refund.

(3)        Claims for refund which will arise in the future may also be pledged. The pledging of a claim for refund shall be valid as of the moment the notice is submitted to the tax authority.

(4)        The pledging or seizure of a claim for refund or the making of a claim for payment against a claim for refund does not prevent the extension or suspension of the refund of overpaid amounts pursuant to § 107 of this Act or the setting off of overpaid amounts against obligations not performed by the due date pursuant to § 109 of this Act.

 

Division 2

Transfer of Claims and Obligations

 

§ 35. Legal succession

If the transfer of rights and obligations from one person to another pursuant to legal succession is prescribed by law, all claims and obligations specified in subsection 31 (1) of this Act, except the obligation to pay a penalty payment, also transfer to the legal successor.

 

§ 36. Transfer of tax liabilities by way of succession

(1)        The claims and obligations specified in subsection 31 (1) of this Act, except the obligation to pay a penalty payment, transfer from a bequeather to the successor pursuant to the procedure provided for in the Law of Succession Act (RT I 1996, 38, 752; 1999, 10, 155; 88, 807; 2001, 56, 336; 93, 565; 2002, 53, 336).

(2)        Until acceptance of or refusal to accept an estate, the obligations arising from this Act or an Act concerning a tax shall be performed in the name of the bequeather by the administrator of the estate or the executor of the will or, in the absence thereof, by the person making the inventory of the estate. The abovementioned person shall perform the financial tax liabilities of the bequeather from the funds of the estate.

 

§ 37. Transfer of tax liabilities upon transfer of enterprise or part thereof

In the event of transfer of ownership or possession of an enterprise or a part thereof, the claims and obligations specified in subsection 31 (1) of this Act, except the obligation to pay a penalty payment, which are related to the enterprise or to the organisationally independent part thereof transfer to the transferee or recipient of possession pursuant to the provisions of the Law of Obligations Act (RT I 2001, 81, 487; 2002, 60, 374).

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

 

Division 3

Liability of Third Party for Tax Liability of Other Person

 

§ 38. Liability of person who transfers enterprise or part thereof

A person who transfers an enterprise or a part thereof and the transferee are solidarily liable for the payment of tax arrears pursuant to the provisions of the Law of Obligations Act.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

 

§ 39. Liability of partner of general partnership or limited partnership and member of association

(1)        A partner of a general partnership and a general partner of a limited partnership are liable for payment of the tax arrears of the general partnership or limited partnership pursuant to §§ 101 and 102 of the Commercial Code.

(2)        A limited partner of a limited partnership is liable for payment of the tax arrears of the partnership pursuant to § 132 of the Commercial Code.

(3)        A member of an association with full or additional liability is liable for payment of the tax arrears of the association pursuant to the provisions of the Commercial Associations Act (RT I 2002, 3, 6; 102, 600).

 

§ 40. Liability of legal representative, administrator of assets and tax representative

(1)        If a legal representative, manager or administrator of assets violates the obligations specified in § 8 of this Act intentionally or due to gross negligence, the legal representative, manager or administrator of assets and the taxable person shall be solidarily liable for the tax arrears incurred as a result thereof.

(2)        A tax representative and the taxable person shall be solidarily liable for tax arrears incurred as a result of failure to perform the obligations provided for in § 81 of this Act.

(3)        If several persons are liable pursuant to subsection (1) of this section, they shall be solidarily liable for the performance of the obligations.

(10.12.2004 entered into force 01.05.2004 – RT I 2003, 82, 554)

 

§ 41. Liability for tax arrears incurred as result of violations of tax law

(1)        A person who is convicted of a tax offence provided for in the Penal Code (RT I 2001, 61, 364; RT I 2002, 86, 504; 105, 612; 2003, 4, 22) and the taxable person are solidarily liable for tax arrears incurred as a result of the offence committed by the person.

(2)        If several persons are liable pursuant to subsection (1) of this section, they shall be solidarily liable for the performance of the obligations.

(3)        Liability specified in subsection (1) of this section does not expire upon termination of the tax liability but, after termination of the tax liability, the tax arrears shall be collected by way of filing a civil action.

 

§ 42. Contractual liability

(1)        A third party may, by a contract, assume liability for performance of the financial obligations of a taxable person.

(2)        A person specified in subsection (1) of this section and a taxable person shall be solidarily liable for performance of the financial obligations of the taxable person. Contractual liability does not deprive a tax authority of the right to file a claim against a taxable person whose tax liability arises pursuant to law. Contractual liability does not grant a tax authority the right to waive the collection of tax arrears from a legally taxable person.

(3)        Tax arrears shall be collected from a person specified in subsection (1) of this section by way of filing an action pursuant to civil procedure.

 

Chapter 3

General Provisions of Tax Proceedings

 

§ 43. Participants in proceedings

The following are participants in tax proceedings:

1)         a taxable person applying for an administrative act to be issued or a measure to be taken (applicant);

2)         the person at whom the administrative act or measure is directed (addressee);

3)         another person whose rights are affected by the administrative act or measure (third party);

4)         the administrative authority which, according to an Act or regulation, is required to submit its opinion regarding or its approval for legislation to be issued or for a measure to be taken to the administrative authority which hears the matter.

 

§ 44. (Repealed – 17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

 

§ 45. Application of Administrative Procedure Act

The provisions of the Administrative Procedure Act (RT I 2001, 58, 354; 2002, 53, 336; 61, 375; 2003, 20, 117) apply to tax proceedings unless otherwise prescribed by this Act, an Act concerning a tax or the customs rules.

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

 

§ 46. Administrative acts of tax authority

(1)        A tax authority issues orders, decisions and other administrative acts for the performance of functions imposed on the tax authority by law. The administrative acts of a tax authority shall be issued, amended and repealed pursuant to the provisions of the Administrative Procedure Act unless otherwise prescribed by this Act or an Act concerning a tax.

(2)        Administrative acts which restrict the rights of the addressee of the administrative act or impose obligations on the addressee shall be in writing and be reasoned. Written administrative acts shall be delivered pursuant to the provisions of Chapter 4 of this Act.

(3)        An administrative act specified in subsection (2) of this section shall set out:

1)         the name and address of the tax authority;

2)         the given name, surname and position of the official who prepared the administrative act;

3)         the date of issue of the administrative act;

4)         the name and address of the addressee of the administrative act;

5)         the factual and legal basis for the issue of the administrative act;

6)         the precept issued by the administrative act or the decision of the issuer of the administrative act;

7)         the term for compliance with the administrative act;

8)         other information provided by law.

(4)        An administrative act specified in subsection (2) of this section shall contain a reference to the opportunities, term, procedure and place for challenging the administrative act and to the sanctions imposed for and other consequences of failure to comply with the administrative act, including the possible obligation to pay a penalty payment or to reimburse the costs of substitutive enforcement.

(5)        An administrative act of a tax authority shall be signed by the head or deputy head of the tax authority or an official authorised by the head of the tax authority. An electronic administrative act shall be signed in the manner established by a regulation of the Minister of Finance pursuant to subsection 54 (3) of this Act.

(6)        Upon signature by an authorised person, the number and date of the document granting the right of signature and the place where the document can be reviewed shall be indicated next to the signature. Documents granting the right of signature shall be published on the website of the tax authority.

(7)        A request to issue an administrative act or take a measure shall be granted or a decision to deny the request shall be communicated within thirty days as of the date of receipt of the request unless a different term is provided by law.

 

§ 47. Language of proceedings and interpreter or translator

(1)        Tax authorities and taxable persons shall communicate in Estonian unless they agree otherwise. Foreign languages shall be used in tax proceedings pursuant to the procedure provided for in the Language Act (RT I 1995, 23, 334; 1996, 37, 739; 40, 773; 1997, 69, 1110; 1998, 98/99, 1618; 1999, 1, 1; 16, 275; 2000, 51, 326; 2001, 58, 354; 65, 375; 93, 565; 2002, 9, 47; 53, 337; 63, 387; 90, 521).

(2)        The following may involve an interpreter or translator in tax proceedings:

1)         a participant in the proceedings;

2)         the tax authority at the request of a participant in the proceedings;

3)         the tax authority without a request from a participant in the proceedings if the tax authority deems it necessary.

(3)        The person who requests the involvement of an interpreter or translator by a tax authority shall bear the costs of the involvement of the interpreter or translator unless otherwise provided by an Act or regulation or unless the tax authority resolves otherwise. The tax authority shall submit a claim for the reimbursement of costs in a corresponding order, set a term for reimbursement and issue a warning stating that, in the event of failure to reimburse the costs by the due date, the claim will be subject to compulsory execution pursuant to §§ 128-132 of this Act.

 

§ 48. Representative

(1)        A participant in tax proceedings has the right to representation. Representation in tax proceedings shall be based on the corresponding provisions of the General Part of the Civil Code Act unless otherwise provided by this Act or an Act concerning a tax.

(2)        A representative may participate in all procedural acts in the name of the principal unless the personal participation of the principal is required pursuant to law or due to the nature of the act.

(3)        A representative shall present a document certifying his or her authorisation at the request of a tax authority and in the cases provided by law.

(4)        A participant in proceedings has the right to appear for procedural acts together with a representative. In such case, a document certifying authorisation need not be presented. The testimony and requests of the representative shall be deemed to have been given or submitted by the participant in proceedings unless the participant in proceedings objects immediately to such testimony and requests.

 

§ 49. Removal

(1)        An official of a tax authority shall not conduct proceedings in a matter if:

1)         he or she is a participant in the proceedings or is acting as a representative of a participant in the proceedings;

2)         he or she is a relative (parent, child, adoptive parent, adopted child, brother, sister, grandparent or grandchild), a relative by marriage (spouse’s parent, child, adoptive parent, adopted child, brother, sister, grandparent or grandchild) or a family member of a participant in the proceedings or of a representative of a participant in the proceedings;

3)         he or she has a personal interest in the resolution of the matter or if other circumstances give reason to doubt his or her impartiality.

(2)        If circumstances specified in subsection (1) of this section become evident or if a participant in proceedings submits an application for removal on the grounds listed in that subsection, an official of a tax authority is required to give notification thereof to the official who has the right to appoint him or her to office or to head of the regional tax centre of the Tax and Customs Board or the regional customs inspectorate who shall decide on the nessesity of the removal within three working days as of the submission of the application for removal.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(3)        An administrative authority which is required to submit an opinion regarding or approval for an administrative act to be issued or a measure to be taken to a tax authority is not deemed to be a participant in proceedings specified in subsection (1) of this section.

(4)        A person shall not be removed if he or she cannot be substituted.

 

§ 50. Calculation, restoration and extension of term for proceedings

(1)        The corresponding provisions of the General Part of the Civil Code Act apply to the calculation of terms.

(2)        If a term for proceedings, except a term for the submission of a tax return, is allowed to expire with good reason, a tax authority may restore the term on its own initiative or at the request of a participant in the proceedings.

(3)        A reasoned request for the restoration of a term for proceedings shall be submitted within two weeks after circumstances impeding performance of the procedural act cease to exist.

(4)        A term for proceedings shall not be restored if more than one year has passed from the original due date prescribed for performance of the procedural act.

(5)        A tax authority may, on the reasoned request of a participant in the proceedings or on its own initiative, extend the term for proceedings designated by the tax authority if the due date thereof has not yet arrived.

(6)        A tax authority may make the restoration or extension of a term for proceedings contingent on the provision of security. Security shall be provided and accepted pursuant to §§ 120-127 of this Act.

(7)        A decision concerning the restoration or extension of a term for proceedings shall be made by the head or deputy head of the tax authority performing the procedural act or by a person authorised by the head of the tax authority.

 

§ 51. International professional assistance

(1)        A tax authority may seek or grant international professional assistance.

(2)        International professional assistance shall be granted on the basis of an international agreement.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

(3)        The competence of agencies granting professional assistance and the rights and obligations of participants in proceedings shall be determined by domestic law.

(4)        The format of the applications for international professional assistance and the list of documents to be annexed to the applications shall be established by the Minister of Finance.

(20.05.2004 entered into force 27.05.2004 – RT I 2004, 45, 319)

 

Chapter 4

Delivery of Documents

 

§ 52. Delivery of documents

(1)        Documents, including administrative acts, summonses and notices, shall be delivered against a signature, delivered by post or electronically or published in a periodical publication. A tax authority may choose the manner of delivery unless a mandatory manner of delivery is provided by law.

(2)        If a document is addressed to several persons, the document shall be delivered to all addressees unless the addressees have requested that the tax authority deliver the document to only one of the addressees or have granted their consent thereto. A document addressed to spouses may be delivered to one of the spouses unless delivery of the document to both spouses has been requested from the tax authority.

(3)        Documents addressed to an association of persons without the status of a legal person or a pool of assets without the status of a legal person shall be delivered to the manager of the association of persons or the administrator of the assets or, in the absence of these persons, to members of the association of persons or co-owners known to the tax authority.

(4)        Documents addressed to persons with restricted active legal capacity shall be delivered to their legal representatives.

 

§ 53. Delivery against signature

(1)        Upon delivery by a tax authority, a document shall be delivered to a participant in proceedings against his or her signature on a notice on which the time of delivery of the document, if necessary the specific time, shall also be indicated.

(2)        Documents shall be delivered to the residence, seat or place of business of a participant in proceedings against a signature between 8 a.m. and 8 p.m. on working days. A document may be delivered between 8 p.m. and 8 a.m. and on days off with the written permission of the head of a tax authority. If permission is needed for delivery, the permission shall be presented to the recipient of the document. If the abovementioned requirements are not observed upon delivery but the recipient of a document does not refuse to accept the document, the document shall be deemed to have been delivered.

(3)        Upon delivery of a document to a representative of a participant in proceedings, the document is deemed to have been delivered also to his or her principal. A document is also deemed to have been delivered if it is delivered against a signature to a family member of at least 10 years of age who lives together with the participant in proceedings.

(4)        If a participant in proceedings or a person specified in subsection (3) of this section refuses to accept a document, the person who delivers the document shall make a notation on the document and certify it with his or her signature. A document bearing a notation shall be returned to the tax authority and deemed to have been delivered to the participant in proceedings.

 

§ 54. Delivery by post and by electronic means

(1)        A document shall be delivered to a natural person residing in Estonia at his or her residential address entered in the population register or at the address of which he or she has informed the tax authority. If a natural person fails to give notice of a change to his or her address, the tax authority has the right to send a document to the last address known to the tax authority.

(2)        A document shall be sent to a legal person or agency by ordinary letter at the address entered in the register. Persons or agencies who are not entered in the register shall receive documents at the address of which they have informed the tax authority.

(3)        At the request of a participant in proceedings, a document shall be sent to an email address indicated by the participant. The Minister of Finance shall, by a regulation, establish requirements for the format of and signature for documents submitted to a tax authority for state taxes by electronic means and other requirements for electronic communication in tax proceedings.

(4)        If a document is delivered electronically, the addressee has the right, if necessary to request that the document be delivered on paper at a later date.

(5)        A document shall be delivered to a taxable person residing or located in a foreign state by registered post at the address of which the taxable person has informed the tax authority. If the residence or seat of the person is not known, the document shall be delivered to the person through a competent administrative agency of the foreign state. If a taxable person residing or located in a foreign state has a permanent establishment or a representative in Estonia, documents shall be delivered to the address of the permanent establishment or to the representative.

(6)        A document sent to a legal person or agency at the address entered in the register shall be deemed to have been delivered after five days have passed since the document was sent within Estonia and after thirty days have passed since the document was sent abroad.

 

§ 55. Delivery through periodical publication

If there is no information concerning the address of a participant in proceedings, or if the participant in proceedings does not reside or is not located at the address entered in the register or known to a tax authority and his or her actual whereabouts are unknown, and if it is not possible to deliver a document in any other manner, the tax authority may publish the resolution contained in the document in the official publication Ametlikud Teadaanded4 . The resolution contained in the document shall be published at least twice and with an interval of not less than two weeks. The resolution contained in the document is deemed to have been delivered on the date following the date on which it is published for the second time.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

 

Chapter 5

Obligation of Taxable Person to Co-operate in Tax Proceedings

 

§ 56. Obligation of taxable person to co-operate

(1)        A taxable person is required to notify a tax authority of all facts known to the taxable person which are or may be relevant for taxation purposes.

(2)        A taxable person shall keep records of facts relevant for taxation purposes, provide explanations, submit returns and other evidence and preserve such returns and evidence for the term prescribed by law. If a mandatory type of evidence is provided by law, a taxable person may only use such type of evidence as proof.

(3)        A taxable person shall not prevent a tax authority from performing procedural acts.

 

§ 57. Obligation to keep accounts and to keep records

(1)        A taxable person shall keep accounts in the cases and pursuant to the procedure provided for in the Accounting Act (RT I 1994, 48, 790; 1995, 26–28, 355; 92, 1604; 1996, 40, 773; 42, 811; 49, 953; 1998, 59, 941; 1999, 55, 584; 101, 903; 2001, 87, 527; 2002, 23, 131).

(2)        An Act concerning a tax may prescribe cases where:

1)         in addition to keeping accounts, a taxable person must keep records of facts relevant for taxation purposes (hereinafter accounting for taxation purposes);

2)         a taxable person who is not required to keep accounts according to the Accounting Act must keep accounts.

(3)        The keeping of accounts and accounting for taxation purposes shall be organised in a manner which enables an overview to be obtained within a reasonable period of time of the conduct of transactions and of facts relevant for taxation purposes, including revenue, expenditure, assets and liabilities.

(4)        If accounting records or accounting records for taxation purposes are not in Estonian, a tax authority may demand that the relevant documents be translated into Estonian. If little-known abbreviations, symbols or keywords are used in the accounting records or accounting records for taxation purposes or if other circumstances render it difficult to understand the documents, the taxable person is required to submit a list of the abbreviations, symbols and keywords and provide additional explanations if necessary.

(5)        Accounting records for taxation purposes shall not be amended in a manner which renders it impossible to determine the original content of the document or the time of amendment thereof.

(6)        Records may be kept electronically if it is ensured that documents, including accounting records, created as a result of accounting are preserved for the term specified in § 58 of this Act. In the case of conversion or amendment of electronic documents, the legibility of the initial information shall be ensured. A taxable person who keeps electronic accounts is required, at the request of a tax authority, to submit documents created as a result of accounting on paper or in electronic form within a reasonable period of time. Documents shall be legible.  The conversion of documents preserved in electronic form into electronic databases allowing access to legible information shall be made possible during the entire term specified in § 58 of this Act.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(7)        If a taxable person is required to keep accounts or accounts for taxation purposes pursuant to the procedure provided by legislation of a foreign state due to conducting economic activities in the foreign state and if, as a result of the economic activities conducted in the foreign state, a tax liability arises in Estonia and accounts or other records have been kept in accordance with the requirements established by the legislation of the state concerned, the results thereof shall be taken into consideration upon taxation.

(8)        The requirements provided for in this section also apply to taxable persons who are not required by law to keep accounts or accounts for taxation purposes but who voluntarily keep accounts or accounts for taxation purposes.

 

§ 58. Obligation to preserve documents

Unless another term is provided by law, a taxable person is required to preserve documents related to transactions and payments and other documents relevant for taxation purposes for at least seven years as of 1 January of the year following the preparation or receipt of the document or, in the case of files or dossiers, the making of the last entry therein.

 

Chapter 6

Evidence

 

§ 59. Collection of evidence

(1)        Evidence in tax proceedings is any information collected with regard to the matter, including information, documents and things obtained from taxable persons, third parties and state, rural municipality and city agencies, facts established by observation and expert opinions. A tax authority shall decide, according to the functions imposed on the tax authority by law and the right of discretion, which evidence needs to be collected in a particular matter.

(2)        A tax authority has the right to examine any documents relating to the economic or professional activities of a taxable person or to the payment of taxes by a taxable person, and to take inventory or control measurements of goods, materials, other assets, work performed and services provided. The examination is divided into:

1)         the examination of individual cases (§§ 60-72);

2)         general examination or tax audit (§§ 73-81).

(3)        In determining amounts of duty, checking the correct payment of duties or preventing offences, customs officials have the right to use all the rights granted to them by law for implementation of the customs rules. Customs officials who have good reason to suspect a violation of a tax Act have the right to use all the rights granted to them by law for the implementation of the customs rules upon determining the amount of duty related to trade between the Member States of the European Union, international postal consignments and persons moving from one Member State to another, upon checking the correct payment of duties or upon preventing offences.

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

 

§ 60. Requesting information from taxable persons

(1)        A tax authority is entitled to obtain oral and written information from a taxable person or a representative thereof in order to ascertain facts relevant to tax proceedings. If necessary, a tax authority may require a taxable person or a representative thereof to appear at the offices of the tax authority at the time designated by the tax authority in order to provide information.

(2)        In order to summon a person to an administrative agency, the tax authority shall issue a written order which complies with the requirements specified in § 46 of this Act and which sets out the place where and time at which the taxable person is required to appear, together with an explanation as to why the person has been summoned. If necessary, a written order shall also be issued in other cases where information is requested.

(3)        If the authorised representative of a taxable person fails to provide information or provides information which is contradictory or insufficient, the tax authority has the right to contact the taxable person in order to obtain the information.

(4)        Oral explanations shall be recorded in the minutes and signed by the person who gives the explanations. If the person refuses to sign, a notation shall be made in the minutes to this effect. If necessary, the tax authority shall explain the rights and obligations of the taxable person to the taxable person and a notation concerning the explanation shall be made in the minutes.

(5)        Any documents submitted in electronic form to a tax authority for state taxes shall comply with the requirements established by a regulation of the Minister of Finance issued on the basis of subsection 54 (3) of this Act. If a document is submitted in electronic form, the tax authority has the right, if necessary, to request that the document be submitted on paper at a later date.

(6)        A person specified in subsection (1) of this section may, pursuant to § 50, apply for extension of the term granted for the performance of an obligation stated in an order.

 

§ 61. Requesting information from third parties

(1)        A tax authority has the right to request information from third parties, including credit institutions, in order to ascertain facts relevant to tax proceedings. The abovementioned persons are required to submit information unless they have the right to refuse to disclose evidence or information pursuant to law. If necessary, a tax authority may require that a third party appear at the offices of the tax authority at the time designated by the tax authority in order to provide information.

(2)        Prior to requesting information from a third party, the tax authority shall approach the taxable person for information unless the tax authority has no information concerning the residence or seat of the taxable person or if the taxable person cannot be reached at the address known to the tax authority or hinders facts relevant for the purposes of tax proceedings from being ascertained.

(3)        In order to request information from a third party, the tax authority shall issue an order in compliance with the requirements specified in § 46 of this Act which also sets out the name of the taxable person in connection with whose tax matter information is being collected and the reason for contacting the third party. If the person is required to appear at the offices of the tax authority to give testimony, the time and place shall also be indicated in the order. A person may, pursuant to § 50 of this Act, apply for extension of the term granted for the performance of an obligation stated in an order.

(4)        Oral explanations shall be recorded in the minutes pursuant to the provisions of subsection 60 (4) of this Act.

 

§ 62. Submission of things and documents

(1)        In order to ascertain facts relevant to tax proceedings, a tax authority has the right to request that a taxable person or third party present things and bearer securities or submit documents in the possession of the person. If things and documents are requested from third parties, the restriction provided in subsection 61 (2) of this Act applies.

(2)        In order to ascertain facts relevant to tax proceedings, a tax authority has the right to request that the taxable person present cash. Cash shall be presented at the location thereof.

(3)        Documents and things specified in subsection (1) of this section shall be submitted or presented in the offices of the tax authority, unless:

1)         the addressee of the administrative act has granted consent to the examination and inspection of the things and documents at their location, or

2)         the tax authority requires the addressee of the administrative act to submit the documents by post if this does not cause excessive expense to the addressee of the administrative act, or

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

3)         it is impossible to convey the documents or things to the offices of the tax authority or doing so would cause excessive inconvenience or expense to the addressee of the administrative act.

4)         the tax authority requires the addressee of the administrative act to submit documents preserved in electronic form electronically.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(4)        A written order shall be issued concerning the obligation specified in subsection (1) or (2) of this section:

1)         if the request is addressed to a third party, or

2)         if the addressee or a representative of the addressee is summoned to the offices of the tax authority to perform the obligation, or

3)         if the taxable person has failed to comply with an earlier request, or

4)         in other cases when deemed necessary by the tax authority.

(5)        A person may, pursuant to § 50 of this Act, apply for extension of the term granted for the performance of an obligation stated in an order.

(6)        The provisions of subsection 61 (3) of this Act apply to the issue of an order specified in clause (4) 1) of this section. The provisions of subsection 60 (5) of this Act extend to the electronic submission of documents to a tax authority pursuant to this section.

 

§ 63. Requesting information from state, rural municipality and city agencies and from chief and authorised processors of state databases

(1)        A tax authority has the right to request information relevant to tax proceedings, including the submission of documents and presentation of things, from a state, rural municipality or city agency. The abovementioned agencies are required to comply with the request of a tax authority unless they have the right to refuse to disclose evidence or information pursuant to law.

(2)        A tax authority for state taxes has the right to obtain, without charge, information from the chief or authorised processor of a state database which identifies persons (given name and surname or business name, personal identification code or registry code, or, in the absence of a personal identification code, the date of birth) who concluded transactions relevant to taxation during the period indicated in the request and also information concerning the transactions concluded by such persons.

(3)        Agencies specified in subsection (1) of this section are required to notify the tax authority of any circumstances which render it impossible to comply with a request for information or for submission of things or documents or due to which it is necessary to extend the term for compliance with a request. Terms shall be extended pursuant to § 50 of this Act.

(4)        If the corresponding technical potential exists, state, rural municipality and city agencies are required to submit returns and other documents to the tax authorities by electronic means. The Minister of Finance shall establish the list of returns and documents to be submitted by state, rural municipality and city agencies by electronic means.

 

§ 64. Right to refuse to provide information or submit evidence

(1)        The right to refuse to perform an obligation specified in §§ 60-63 of this Act to provide information or submit evidence exists:

1)         for advocates in respect of circumstances which become known to them in connection with the provision of legal assistance;

2)         for doctors, notaries, patent agents and ministers of religion in respect of information which becomes known to them in connection with their professional activities;

3)         for agencies which organise state statistical surveys and officials who conduct such surveys in respect of information which becomes known to them in connection with a survey;

4)         for auditors and persons engaged in the professional activities of an auditor, pursuant to the provisions of the Authorised Public Accountants Act (RT I 1999, 24, 360; 2002, 21, 117; 53, 336; 57, 357; 61, 375; 2003, 23, 133);

5)         for spouses, direct blood relatives, sisters or brothers of taxable persons, descendants of sisters or brothers of taxable persons, and direct blood relatives or sisters or brothers of spouses of taxable persons, unless such persons are required to provide information in the given matter and submit documents in connection with their own tax liability;

6)         for persons in respect of questions to which giving an answer would mean that the persons would incriminate themselves or a person specified in clause 5) of this subsection in an offence;

7)         if the provision of information or submission of evidence would violate the confidentiality of messages sent or received by post, telegraph, telephone or other commonly used means or the confidentiality of a state secret.

(2)        Persons who assist persons specified in clauses (1) 1)-4) of this section in their professional activities also have the right to refuse to disclose information in respect of facts which become known to them in the performance of their duties.

(3)        If persons specified in clause (1) 5) of this section are requested to give testimony or to submit or present documents or evidence, such persons shall be notified in writing or orally of their right to refuse to perform the obligation. If oral notification is given, a signature shall be obtained from the person.

 

§ 65. Making copies of documents and removal of documents and things

(1)        A tax authority may make copies and extracts of documents submitted thereto by a participant in proceedings and officially certify the accuracy thereof. Documents shall be officially certified pursuant to the provisions of the Administrative Procedure Act.

(2)        A tax authority may remove documents and things submitted thereto if:

1)         the documents or things are necessary to resolve a tax matter and the tax authority has reason to believe that such evidence may not be available later, or

2)         it is necessary in order to make extracts or copies of the documents, or

3)         the documents and things refer to a possible offence.

(3)        A report shall be prepared concerning the removal of documents stating the names of the documents, the number of documents and, in the event of files being removed, the number of pages. A report shall be prepared concerning the removal of things stating a description of the removed things and the number of removed things. The report shall be signed by the person who prepared the report and persons who participated in the act. If a participant in proceedings refuses to sign the report, the person who prepares the report shall make a corresponding notation in the report. A report shall be prepared in duplicate and one of the original copies shall be given to the participant in proceedings whose things or documents were removed.

(4)        Documents shall not be removed in the cases provided for in clauses (2) 1) and 2) of this section if the participant in proceedings objects to their removal and bears the costs of making copies or extracts of the documents. The accuracy of copies and extracts shall be certified pursuant to the provisions of subsection (1) of this section and the participant in proceedings shall sign beside the notation concerning certification. If the number of certified copies or extracts is large, a report shall be prepared in which a list of the documents of which copies or extracts were made shall be set out. The report shall be signed by an official of the tax authority and the participant in proceedings.

 

§ 66. Reimbursement of expenses to third party

(1)        Documented travel expenses and accommodation expenses incurred and average wages which are not received due to performance of the obligations provided for in §§ 61 and 62 of this Act by a third party outside the residence thereof shall, at the request of the third party, be reimbursed thereto. A tax authority shall, on the basis of an invoice submitted thereto, pay for the making of copies or extracts in the amount of up to three kroons per page of paper starting from the twenty-first page.

(2)        A tax authority has the right to claim amounts paid to a third party for the reimbursement of costs from a taxable person if the taxable person:

1)         fails to comply with an order of the tax authority requesting the submission of information, things or documents in the same matter, or

2)         cannot be reached at the residence or seat of the taxable person or at any other address of which the tax authority has been informed, or

3)         evades the proceedings, or

4)         hinders the process of ascertaining facts relevant for the purposes of tax proceedings in another manner.

(3)        A tax authority does not have the right to request the reimbursement of expenses of a third party from a taxable person if the tax authority contacted the third party without giving the taxable person the opportunity to submit information, except in the cases specified in clauses (2) 2)-4) of this section.

(4)        A tax authority shall, in an order, submit a claim for the reimbursement of expenses to a taxable person, set a term for reimbursement and issue a warning stating that, in the event of failure to reimburse the expenses by the due date, the claim will be subject to compulsory execution pursuant to §§ 128-132 of this Act.

(5)        Expenses specified in the first sentence of subsection (1) of this section shall be reimbursed in the amount and pursuant to the procedure established by a regulation of the Government of the Republic.

 

§ 67. Penalty payment for failure to submit information, things or documents

(1)        When setting a term for the performance of obligations provided for in §§ 60-62 of this Act, a tax authority may issue a warning (§ 136) stating that a penalty payment may be imposed for failure to perform an obligation within the term. A tax authority may also issue a warning concerning the imposition of penalty payment to a taxable person who fails to perform an obligation to submit reports or other documents arising from an Act concerning a tax.

(2)        If a person fails to perform an obligation imposed on the person by an administrative act by the due date stated in a warning, the person shall pay the penalty payment specified in the warning. The tax authority shall, in an order, submit a claim for payment of a penalty payment to an obligated person, set a term for payment and issue a warning stating that, in the event of failure to pay the penalty payment within the specified term, the claim will be subject to compulsory execution pursuant to §§ 128-132 of this Act.

(3)        A penalty payment to enforce the performance of the same obligation shall not exceed 10 000 kroons the first time and 30 000 kroons the second time. Penalty payments imposed to enforce the performance of the same obligation shall not exceed 40 000 kroons in total.

 

§ 68. Involvement of experts

(1)        A tax authority may, on its own initiative or at the request of a taxable person, involve an expert in proceedings. The participants in the proceedings shall be informed of the name of the expert before the expert is involved unless it is necessary to conduct expedited proceedings in the matter.

(2)        If grounds provided for in § 49 of this Act become evident, the expert is required to remove himself or herself. A participant in proceedings may request the removal of the expert on the same grounds. A request shall be submitted within five working days as of the date of becoming aware of the identity of the expert. Thereafter, removal is permitted only if it is proven that it was not possible to submit the request on time. The tax authority shall make a decision regarding removal within five working days as of the date on which a request for the removal of an expert is submitted by a participant in proceedings or by the expert himself or herself.

(3)        An expert shall present his or her opinion in writing. If deemed necessary by the tax authority, the expert may be asked to be present during the procedural acts and, in such case, the expert may give his or her opinion orally. An oral opinion shall be recorded in the report of the procedural act and signed by the expert. Participants in proceedings have the right to submit questions to an expert.

(4)        An expert has the right to examine the materials which are necessary for the performance of his or her tasks and to make proposals for amendment of the materials. The expert is required to maintain the confidentiality of information subject to tax secrecy which becomes known to him or her in connection with the performance of his or her duties (§ 26). The obligation to maintain tax secrecy shall be explained to the expert and the explanation shall be confirmed by his or her signature.

 

§ 69. Reimbursement of expenses relating to expert assessment

(1)        Documented travel and accommodation expenses incurred by an expert as a result of performing his or her obligations outside his or her residence shall be reimbursed to the expert at his or her request and remuneration shall be paid for the expert assessment carried out.

(2)        The costs of an expert assessment carried out on the initiative of a tax authority shall be borne by the tax authority.

(3)        The costs of an expert assessment carried out on the initiative of a participant in proceedings and at the expense of a tax authority shall be borne by the person on whose initiative the expert is involved. The tax authority shall, in an order, submit a claim for the reimbursement of expenses to a taxable person, set a term for reimbursement and issue a warning stating that, in the event of failure to reimburse the expenses within the specified term, the claim will be subject to compulsory execution pursuant to §§ 128-132 of this Act.

(4)        Expenses specified in subsection (1) of this section shall be reimbursed in the amount and pursuant to the procedure established by a regulation of the Government of the Republic.

 

§ 70. Meters and preventive measures

(1)        In order to make an assessment of tax to be paid, to verify the correctness of tax payments or to prevent an offence, a tax authority has the right to request that a taxable person:

1)         install meters on receptacles, storage facilities or equipment;

2)         seal receptacles, storage facilities and equipment, and gambling inventory if gambling is being organised;

3)         close off territories or parts thereof;

4)         install equipment, including a cash register, enabling cash transactions to be monitored.

(2)        The installation of meters or equipment specified in clauses (1) 1) and 4) of this section may be demanded if a taxable person has failed to comply with an obligation to install a corresponding meter or equipment imposed on the taxable person by law.

(3)        A tax authority may appoint an official who, during a term set by the tax authority, has the right to be present at the place of business of a taxable person during general working time or the working time of the enterprise for the purpose of monitoring the use of a meter or equipment.

(4)        Orders for the installation of meters or equipment enabling cash transactions to be monitored, for monitoring the use of meters or such equipment or for the application of preventive measures shall be prepared in writing.

(5)        A preventive measure shall be removed not later than on the working day following the day on which the reason for application of the preventive measure is removed or ceases to exist.

(6)        A tax authority is required to compensate for any direct damage caused as a result of the activities provided for in clause (1) 2) or 3) of this section if no offence on the part of the taxpayer is ascertained or if a preventive measure is not removed within the term prescribed in subsection (5) of this section.

 

§ 71. Substitutive enforcement

(1)        When setting a term for the performance of an obligation provided for in § 70 of this Act, a tax authority may issue a warning (§ 136) stating that substitutive enforcement will be applied in the event of failure to perform the obligation by the due date. The person shall also be informed in the warning of the estimated size of the costs of substitutive enforcement and reference shall be made to the provisions on the basis of which the costs of substitutive enforcement will be collected.

(2)        If a taxable person fails to perform an obligation provided for in subsection 70 (1) of this Act within the set term or if performance of the obligation is necessary in order to prevent an offence, a tax authority shall perform the necessary act itself or use the assistance of a third party or a state, rural municipality or city agency to do so. The costs of the act shall be borne by the person who failed to perform the obligation if a corresponding written warning had been delivered to the person. The tax authority shall, in an order, submit a claim for the reimbursement of costs to the person, set a term for reimbursement and issue a warning stating that, in the event of failure to reimburse the costs within the specified term, the claim will be subject to compulsory execution pursuant to §§ 128-132 of this Act.

(3)        At the request of a person with regard to whom a coercive measure is applied, the official executing substitutive enforcement shall present his or her identification and enforcement order. A third party shall present the enforcement order issued thereto by a tax authority in order to carry out substitutive enforcement.

(4)        The person or agency carrying out substitutive enforcement shall prepare a written report concerning the act.

 

§ 72. Inspection and other procedural acts

(1)        Officials of tax authorities have the right, in order to conduct inspections, to have access to plots of land, buildings and premises where the business or professional activities of a taxable person are carried out. In the course of an inspection, officials of tax authorities do not have the right to conduct searches, open locked spaces or storage rooms or enter a dwelling against the will of the persons residing therein even if the business or professional activities of a person are carried out therein.

(2)        Officials of tax authorities have the right to inspect property owned or possessed by persons not engaged in business or professional activities, including immovables, buildings, ships, vehicles and other movable property, provided that the inspection does not involve entry into or a search of the dwelling or premises of the person against the person’s will.

(3)        Advance notice of the conduct of an inspection specified in subsections (1) and (2) of this section shall be given within a period of time which enables the taxable person to form an opinion on the planned act. In urgent cases, advance notice of the conduct of an inspection need not be given. Advance notice of the conduct of an inspection provided for in subsection (2) of this section also need not be given if the tax authority is unable to ascertain the residence or seat of the owner or possessor of the property. In order to conduct an inspection specified in subsection (1) of this section, a written order which, among other things, sets out the purpose of the inspection, shall be presented to the taxable person or a representative thereof. If no written order is presented in order to conduct an inspection, the taxable person has the right to request that the taxable person be subsequently informed in writing of the grounds for the inspection.

(4)        An inspection specified in subsection (1) of this section shall be conducted during the working time of the enterprise or during general working time. Minutes shall be taken of the course of an inspection and the facts established by the inspection.

(5)        In order to conduct an inspection, an official of a tax authority has the right to:

1)         involve specialists and experts;

2)         make extracts or copies of documents pursuant to the procedure provided for in § 65 of this Act;

3)         take photographs of or record in another manner the inspected territory or things;

4)         take inventory or control measurements of goods, materials and other property and prepare plans or sketch maps of inspected territories or buildings;

5)         remove documents and things pursuant to the provisions of § 65 of this Act.

(6)        Officials of tax authorities have the right to take samples from the fuel tanks and elsewhere in the fuel system of motor vehicles to ascertain whether fuel used as motor fuel is fiscally marked. The results of the procedural act shall be recorded.

(7)        The tax authorities have the right to involve specialists in inspections and other procedural acts if the assistance of a person who has specific expertise is required to conduct the inspections or procedural acts. A notation concerning the involvement of a specialist shall be made in the report of the procedural act. The provisions of subsection 68 (4) of this Act apply to specialists.

 

Chapter 7

Tax Audit

 

§ 73. Objective and scope of tax audit

(1)        The objective of a tax audit is to ascertain all the facts relating to the tax liability subject to audit, including both facts which increase and facts which reduce the tax liability.

(2)        A tax audit may cover one or several taxes or one or several periods of taxation or be restricted to the ascertainment of specific facts.

(3)        In the course of a tax audit, facts relating to the tax liabilities of other persons may be ascertained if the person subject to the audit is required to withhold tax on payments made to such persons.

(4)        A tax audit of a natural person may only be conducted if the natural person operates as a sole proprietor or is a withholding agent.

(5)        The provisions of this Chapter do not apply to verification of the correctness of the payment of taxes carried out immediately after the acceptance of a customs declaration.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

 

§ 74. Competence

(1)        A tax audit shall be conducted by the tax authority competent to conduct proceedings in the particular tax matter.

(2)        If it is necessary to substitute the controller, the Director General of the Tax and Customs Board or the head of the regional tax centre or the regional customs inspectorate may appoint another official of theTax and Customs Board to the position of controller.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(3)        (Repealed – 17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(4)        Foreign taxation officials may be involved in the conduct of a tax audit if, in connection with the tax matter subject to the audit, it is necessary to verify tax liabilities which have arisen or which will arise in a foreign country and if the foreign state guarantees that the confidentiality of information subject to tax secrecy will be maintained.

 

§ 75. Advance notice of tax audit

(1)        A tax authority shall give notice of a tax audit and set out the scope of the tax audit (subsection 73 (2)) in a letter which shall be delivered to the taxable person not later than seven days prior to the beginning of the tax audit. If advance notification would endanger the objective of the tax audit, the letter of notification shall not be delivered prior to the beginning of the tax audit.

(2)        The objective of a tax audit is deemed to be endangered if the tax authority has reason to believe that, if the taxable person receives advance notice of the tax audit, the taxable person will prevent access to documents or things relating to the business or economic activities of the taxable person or destroy, falsify, counterfeit or damage in another manner the documents or things.

(3)        In addition to the provisions of § 46 of this Act, a letter specified in subsection (1) of this section shall set out the tax and period of taxation subject to the audit, the term for the autdit and the name of the official conducting the tax audit. The scope of and the term for the audit may be changed later by a letter, if necessary. The reasons for the extension of the term of the audit or for another change burdening the taxable person shall be provided in the letter.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

 

§ 76. Commencement of tax audit

(1)        At the beginning of a tax audit, the tax auditor shall present his or her identification and the letter of notification if the letter was not delivered earlier.

(2)        At the beginning of a tax audit, the date on and time at which the tax audit commences shall be documented in writing.

(3)        A tax authority has the right to postpone the beginning of a tax audit with good reason if the taxable person submits a reasoned request to that effect. The tax authority shall decide whether a request is reasoned or not.

 

§ 77. Time and place of tax audit

(1)        A tax audit shall be conducted during general working time or the working time of the enterprise in a workroom or at a workplace the use of which is granted to the tax auditor by the taxable person for the duration of the tax audit.

(2)        If it is not possible for the taxable person to grant the use of a workroom or workplace to the tax auditor, documents may be submitted and things presented in the dwelling of the taxable person or at the offices of the tax authority.

 

§ 78. Rights and obligations of taxable person during tax audit

(1)        During a tax audit, the taxable person has the right to be informed of the facts hitherto ascertained and the possible relevance of the facts in terms of taxation.

(2)        The taxable person has the right to apply for the removal of the tax auditor on the grounds provided for in § 49 of this Act.

(3)        The taxable person is required:

1)         to ensure that the tax auditor has access to information relating to the tax liability subject to the audit;

2)         to submit relevant documents and things to the tax auditor for examination and, if necessary, give explanations concerning such documents and things;

3)         if possible, to ensure, without charge, an appropriate workroom or workplace for the tax auditor to conduct the tax audit.

4)         to introduce to the tax auditor the information systems related to accounting systems and accounting.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

 

§ 79. Collection of explanations, examination and removal of documents and things, and other acts

(1)        The tax auditor has the right to obtain explanations from the taxable person or a person designated by the taxable person in the course of a tax audit. If the taxable person or a person designated by the taxable person refuses to provide explanations or evades a tax audit, the tax auditor may question other employees of the taxable person who are present. The explanations shall, if necessary, be recorded in a report.

(2)        The tax auditor has the right to carry out inspections, involve experts and specialists, make extracts and copies of the examined documents and perform other acts provided for in Chapter 6 of this Act, taking account of the specifications provided for in this Chapter. Acts may be performed on the basis of oral orders, except in the cases provided for in §§ 70 and 71 of this Act.

(3)        The taxable person or a representative or employee of the taxable person shall be involved in any inspection carried out in the course of a tax audit pursuant to subsection 72 (1) of this Act. The provisions of subsection 72 (3) of this Act do not apply to the conduct of an inspection. If a specialist is involved, the taxable person shall be informed of the name of the specialist and the grounds for his or her involvement.

(4)        The tax auditor has the right to remove documents or things relevant to the matter if elements of an offence become evident during the inspection or by agreement with the taxable person.

 

§ 80. Closing interview

(1)        At the end of a tax audit, the tax auditor shall conduct an interview with the taxable person or a representative of the taxable person. An interview is not conducted at the end of a tax audit in the case specified in subsection 81 (3) of this Act or if the taxable person or a representative of the taxable person refuses to participate in an interview or if no facts altering the tax liability are discovered as a result of the tax audit.

(2)        In the course of an interview, the taxable person shall be informed of the results of the tax audit, disputable facts shall be discussed with the taxable person and he or she shall be given the opportunity to provide explanations regarding such facts. At the request of the taxable person, the tax auditor shall explain how the facts ascertained in the course of the tax audit may affect the tax liability of the taxable person. The interview may be combined with the examination of the audit report. Officials of the tax authority who did not participate in the tax audit may be involved in an interview, along with experts and specialists. Explanations given in the course of an interview shall be recorded in the minutes if necessary.

(3)        If elements of a misdemeanour or a criminal offence become evident in the course of a tax audit, the tax authority shall inform the taxable person thereof and explain that the offence will be heard and the facts necessary therefor will be ascertained in the course of separate proceedings.

 

§ 81. Audit report

(1)        At the end of a tax audit, the tax auditor shall prepare an audit report setting out all the factual information and legal facts ascertained in the course of the tax audit and relevant for the purposes of taxation. If an expert or specialist is involved in the tax audit, their participation shall be indicated in the audit report.

(2)        The taxable person or a representative of the taxable person has the right to examine the audit report and, if the taxable person or representative does not agree with the facts stated therein, to request that his or her dissenting opinion be added to the audit report. A notation concerning the addition of a dissenting opinion shall be made at the end of the audit report.

(3)        The audit report shall not be examined and an interview shall not be conducted prior to delivery of the administrative act issued as a result of the tax audit, if examination would hinder the truth from being ascertained in criminal proceedings or tax from being collected.

(4)        The audit report shall not be examined if no facts altering the tax liability are discovered as a result of the tax audit. A corresponding written notice shall be delivered to the taxable person. The notice shall be considered to be equivalent to a notice of assessment (§ 95) issued as a result of a tax audit and the provisions of §§ 101-103 of this Act apply to the amendment or repeal thereof.

 

Chapter 8

Tax Returns and Making Assessment of Tax

 

Division 1

General Provisions

 

§ 82. Use of information submitted by taxable persons as proof

Upon verification of the performance of the tax liabilities of a taxable person and upon making an assessment of tax, a tax authority shall proceed primarily from tax returns (subsection 85 (1)) submitted by the taxable person, the accounts kept by the taxable person and other records kept by the taxable person concerning the activities of the taxable person. If a tax authority has doubts concerning the accuracy of information submitted by a taxable person, the tax authority shall collect supplementary evidence.

 

§ 83. Taking account of void transactions upon taxation

(1)        Transactions which are contrary to law or good morals shall be taxed in the same manner as lawful transactions. The consequences of unlawful activities shall result in the creation of the same tax liabilities as would arise as a result of lawful activities with similar economic content.

(2)        A transaction or act which is contrary to law or good morals may result in an increase in tax liability, if an increase is prescribed by law.

(3)        The fact of a transaction being void shall not be taken into account upon taxation if the parties do not return that which was received as a result of the transaction or do not restore the situation prior to the conclusion of the transaction in another manner.

(4)        Fictitious transactions shall not be taken into account upon taxation. If a fictitious transaction is entered into in order to conceal another transaction, provisions concerning the concealed transaction apply upon taxation.

 

§ 84. Transactions and acts performed for purposes of tax evasion

If it is evident from the content of a transaction or act that the transaction or act is performed for the purposes of tax evasion, conditions which correspond to the actual economic content of the transaction or act apply upon taxation.

 

Division 2

Tax Return

 

§ 85. Tax return

(1)        A tax return (hereinafter return) is taken to mean an income tax return, value added tax return, excise duty return, customs declaration, social tax return, gambling tax return, annual tax report or other document for the calculation of tax which is to be submitted to a tax authority pursuant to an obligation to submit the document arising from law.

(2)        Documents the submission of which is prescribed by law or a regulation shall be appended to a return.

(3)        A tax authority has the right to issue reminders regarding the submission of returns and orders for the submission of returns.

(4)        A person who submits a return is required to submit information which is correct to the knowledge of the person and to certify the correctness of the information in writing.

 

§ 86. Submission and receipt of returns

(1)        Returns shall be sent by post, on electronic data media or using electronic means of data communication or shall be delivered to the offices of a tax authority or to another place designated by a tax authority. A person may choose the manner of submitting a return unless otherwise provided by law or a regulation.

(2)        Cases where a certificate concerning the receipt of a return is to be issued or a notation concerning the receipt of a return is to be made on the return may be prescribed by law or a regulation.

 

§ 87. Signing of return

(1)        A return shall be signed by the taxable person or the legal or authorised representative of the taxable person. A return shall be signed on behalf of a person with restricted active legal capacity by the legal representative or guardian of the person.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

(2)        An authorised representative of a natural person may sign a return in the cases provided for in the customs rules and if the person is unable to sign the return due to illness or trip abroad. The tax authority may request that the authorised representative prove that the taxable person is unable to perform the obligations of the taxable person due to one of the abovementioned reasons. The tax authority may request that the taxable person sign the return after the hindering circumstances cease to exist.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472; 13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

(3)        If a return in writing is signed by an authorised representative, a document certifying authorisation shall also be submitted to the tax authority unless it has been submitted earlier.

(4)        If a return is submitted using electronic means of data communication, the electronic signature shall be given in such a manner as to enable the identity of the person who submitted the return and the time when the signature was given to be determined. An electronic signature shall be given in the manner provided by the Digital Signatures Act (RT I 2000, 26, 150; 92, 597; 2001, 56, 338; 2002, 53, 336; 61, 375) or established by a regulation of the Minister of Finance pursuant to subsection 54 (3) of this Act.

 

§ 88. Calculation of amount of tax

(1)        A taxable person shall calculate the amount of tax payable on the basis of a return. A tax authority has the right to verify the amount calculated by a taxable person and, if necessary, make an assessment of tax within the term specified in § 98 of this Act.

(2)        If so prescribed by law or a regulation, a tax authority shall calculate the amount of tax payable on the basis of a return and send the person a tax notice concerning the payable amount. A tax notice is an administrative act which is in compliance with the requirements provided for in § 46 of this Act and which is sent to a taxable person not later than thirty days before the due date for the payment of tax. A tax notice is not issued if the amount of tax is less than 50 kroons. A tax authority may also issue a tax notice concerning an amount of tax calculated on the basis of a return submitted after the due date for the submission of the return if the amount of tax is calculated based on the information set out in the return.

(3)        The provisions of §§ 101-104 of this Act apply to the amendment and repeal of tax notices specified in subsection (2) of this section, taking account of the specifications provided for in subsections (4)-(6) of this section.

(4)        A tax notice specified in subsection (2) of this section may be amended or repealed, either to increase or reduce tax liability, during the limitation period for making an assessment of tax without taking account of the restrictions provided for in §§ 101-104 of this Act.

(5)        Calculation errors discovered in a tax return or tax notice may be corrected before expiry of the term for challenging the tax notice or if the term for filing a challenge is restored. The abovementioned restriction does not apply if the tax notice can be amended or repealed on other grounds.

(6)        If a tax notice is amended or repealed due to facts reducing the tax liability, the tax authority shall issue a new tax notice or make a decision concerning the repeal of the tax notice. In order to amend a tax notice due to facts increasing the tax liability, the tax authority shall repeal the tax notice and issue a notice of assessment (§ 95).

 

§ 89. Amendment of return

(1)        If, before expiry of the limitation period for making an assessment of tax (§ 98), a taxable person finds that, due to mistakes or the insufficiency of the information in the return submitted by the taxable person or on behalf of the taxable person, the amount of tax declared is less than the amount of tax payable pursuant to an Act concerning a tax, the taxable person shall immediately notify the tax authority thereof in writing. Acts concerning taxes, the customs rules and regulations established on the basis of the customs rules may prescribe cases where a taxable person is required to:

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

1)         request that a return be corrected or annulled;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

2)         correct the amount of tax in returns submitted in the future;

3)         submit a corrected return containing accurate information.

(2)        The obligation specified in subsection (1) of this section also extends to legal successors and administrators of estates of taxable persons.

(3)        A taxable person who uses goods or services for purposes other than that due to which the goods or services were subject to a tax incentive or tax exemption is required to notify a tax authority thereof immediately and, pursuant to the provisions of subsection (1) of this section, declare the amount of tax which would have been payable had the tax incentive or tax exemption not been applied.

 

§ 90. Deficiencies in return

(1)        If a return does not meet the requirements established by law or a regulation, the tax authority shall draw the attention of the person who submitted the return to the deficiencies and, if necessary, set a term for the taxable person to eliminate the deficiencies.

(2)        If the deficiencies are not eliminated during the term set by the tax authority, the return shall be deemed not to have been submitted.

(3)        Deficiencies in customs declarations shall be eliminated pursuant to the procedure provided for in the customs rules.

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

 

§ 91. Penalty payment for failure to submit return or corrections thereto

(1)        If a return is not submitted by the due date prescribed by law, the tax authority may set a term for the submission of the return and issue a warning (§ 136) stating that a penalty payment may be imposed for failure to submit the return within the term set by the tax authority.

(2)        A penalty payment may also be imposed if a person has been reminded of the obligation to submit a return before the due date for the submission thereof, and if a taxable person fails to eliminate deficiencies from a tax return within the term set pursuant to subsection 90 (1) of this Act and the tax authority issued a written warning concerning the imposition of a penalty payment when setting the term for the elimination of the deficiencies.

(3)        If a person fails to perform an obligation imposed on the person by an administrative act by the due date stated in a warning, the person shall pay the penalty payment specified in the warning. The tax authority shall, in an order, submit a claim for payment of the penalty payment to the person, set a term for payment and issue a warning stating that, in the event of failure to pay the penalty payment within the term, the claim will be subject to compulsory execution pursuant to §§ 128-132 of this Act.

(4)        If a tax authority sets a term for submission of the same return or for the elimination of deficiencies in the same return, the penalty payment shall not exceed 20 000 kroons the first time and 30 000 kroons the second time. Penalty payments imposed by a tax authority to enforce submission of the same return or corrections to the same return shall not exceed 50 000 kroons in total.

 

Division 3

Notice of Assessment and Liability Decision

 

§ 92. Assessment of tax by tax authority

(1)        A tax authority shall make an assessment of tax payable:

1)         if a return is not submitted by the due date prescribed by law, unless otherwise provided by law;

2)         if a taxable person has submitted false information in a return resulting in the amount of tax indicated by the taxable person in the return or the amount of tax calculated by the tax authority on the basis of the information in the return being less than the amount of tax which should be paid pursuant to an Act concerning a tax;

3)         if a taxable person has submitted false information resulting in the amount of tax to be refunded as calculated by the taxable person or on the basis of the information submitted by the taxable person being more than the amount to be refunded pursuant to an Act concerning a tax;

4)         in other cases prescribed by law or a regulation.

(2)        The provisions of subsection (1) of this section also apply if an Act concerning a tax prescribes the payment of tax by way of purchasing revenue stamps and a tax authority establishes that the amount of tax paid differs from the amount of tax payable pursuant to law.

(3)        Upon making an assessment of tax payable, a tax authority shall take into consideration all the facts relevant to the particular tax matter which the tax authority deems to be reliable.

(4)        Upon making an assessment of tax, a tax authority is not required to take into consideration facts reducing the tax liability which have not been declared by the taxable person by the due date for the submission of the tax return if the tax authority is not aware of such facts without an expression of intention on the part of the taxable person.

 

§ 93. Assessment of tax with resolutive condition

(1)        If no tax audit has been conducted in a tax matter, the tax authority may make an assessment of tax on the condition that the notice of assessment may be amended or repealed as a result of further inspection or if more evidence is submitted (hereinafter resolutive condition).

(2)        The tax authority shall determine the period of validity of the condition in the notice of assessment and set out the grounds for the conditional assessment of tax.

(3)        During the period of validity of the condition, the restrictions provided for in Division 4 of this Chapter do not apply to the amendment and repeal of the notice of assessment.

(4)        A taxable person may apply for the amendment or repeal of a notice of assessment during the period of validity of the condition.

(5)        A resolutive condition may be revoked by a written decision at any time. A resolutive condition shall also be revoked if no facts altering the tax liability are discovered in a tax matter as a result of a tax audit. If a condition has not been revoked earlier, its validity shall expire upon expiry of the limitation period for making an assessment of tax.

 

§ 94. Assessment of tax by estimation

(1)        A tax authority may, by way of estimation, establish facts which are the basis for making an assessment of tax payable. Estimation is permitted if the written evidence which is necessary to make an assessment of tax is incomplete, insufficient or unreliable or has been destroyed or is missing and if it is not possible to establish the facts on which the tax liability is based by means of any other evidence. Estimation is also permitted if the expenditure of a taxpayer who is a natural person exceeds his or her declared income and if the taxpayer fails to provide evidence proving that the expenditure has been incurred out of income which was taxed earlier or which is not subject to tax or out of loans taken.

(2)        Estimation shall be based on the information collected in a matter, as well as on the business indicators and expenditure of the taxable person and comparisons with information ascertained in other similar tax matters. The methods of estimation and evidence used for estimation shall be set out in a notice of assessment.

(3)        Upon estimation, economic benefits related to property shall be deemed to be in the ownership of the owner of the property. Economic benefits are things, monetarily appraisable rights and income or gains derived from a thing. If a person has actual control over the property of another person and enjoys the economic benefits related to the property in a manner which precludes the owner of the property from enjoying the benefits, the economic benefits shall be deemed to be in the ownership of the possessor for the purposes of making an assessment of tax.

(4)        Economic benefits shall not be deemed to be in the ownership of the possessor if the person who possesses proprietary rights which are in his or her name or a thing which is used by him or her as a broker, representative, pledgee, lessee, commercial lessee or usufructuary submits evidence concerning the ownership of the property and the identity of the owner. If the possessor of the property fails to submit reliable evidence, such rights or things shall be deemed to be owned by the possessor for the purposes of making an assessment of tax.

 

§ 95. Notice of assessment

(1)        A tax authority shall prepare a notice of assessment in order to make an assessment of tax.

(2)        A notice of assessment is an administrative act which is in compliance with the requirements provided for in § 46 of this Act. The notice of assessment shall clarify the method by which assessment of the tax payable is to be made. If none of the evidence submitted by a taxable person is taken into consideration upon making an assessment of tax or if only some of the evidence is taken into consideration, the reasons therefor must be set out in the notice of assessment.

(3)        If several taxable persons are solidarily liable for the payment of an amount of tax, the tax authority has the right to issue a joint notice of assessment to such persons.

(4)        A tax authority may submit a claim for the performance of an accessory obligation to a taxable person in a notice of assessment. A claim may be submitted in a joint notice of assessment even if the claim is not directed against all the taxable persons. In such case, the person against whom the claim is submitted shall be indicated in the administrative act.

(5)        A notice of assessment shall be delivered to the taxable person pursuant to the procedure provided for in Chapter 4 of this Act not later than thirty days before the due date for payment of the amount of tax, unless otherwise provided by law. The notice of assessment may contain a warning concerning the initiation of compulsory execution in the event of failure to perform the obligation.

(6)        The provisions concerning notices of assessment also apply to administrative acts issued for the application of tax incentives or tax exemptions unless otherwise provided by law.

 

§ 96. Liability decision

(1)        In order to collect tax arrears from a third party who is liable for the performance of obligations of a taxpayer or withholding agent pursuant to law, a tax authority shall make a liability decision.

(2)        The provisions of subsections 95 (2)-(5) of this Act apply to liability decisions, taking account of the specifications provided for in this section.

(3)        In a liability decision, the basis for the application of liability and the methods of calculating the amount of tax shall be indicated and a term for payment of the amount of tax and for the performance of accessory obligations, which shall not be less than thirty days as of the date of delivery of the decision, shall be set. If an amount of tax is assessed by a notice of assessment which has not been delivered to the addressee of a liability decision, a copy of the notice of assessment shall be appended to the liability decision and the methods of calculating the amount of tax is not indicated in the liability decision.

(4)        A liability decision may contain a warning concerning the initiation of compulsory execution in the event of failure to perform the obligation. A copy of a liability decision shall be sent to a taxable person whose tax a third party is obligated to pay.

(5)        Unless otherwise provided by law, a liability decision obligating a person to pay an amount of tax may be made within the limitation period for making an assessment of tax (§ 98). Liability decisions concerning persons specified in §§ 38-40 of this Act may be made only after collection is commenced in the manner provided for in clause 130 (1) 6) of this Act with respect to a taxpayer or withholding agent and if, as a result thereof, the tax arrears have not been collected within three months, or after the taxpayer or withholding agent is declared bankrupt.

(6)        A liability decision is not made if:

1)         no tax arrears have been incurred;

2)         the limitation period for the collection of the tax arrears has expired;

3)         the tax arrears have been forgiven.

 

§ 97. Rounding of amounts

Amounts of tax payable, amounts of claims for refund and amounts arising from accessory obligations shall be rounded to full kroons unless otherwise provided by an Act concerning a tax or the customs rules. Sums below 50 cents shall be omitted and sums of 50 sents or more shall be rounded to full kroons.

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

 

§ 98. Limitation period for making assessment of tax

(1)        The limitation period for making an assessment of tax is three years. In the event of intentional failure to pay or withhold an amount of tax, the limitation period for making an assessment of tax is six years. A limitation period begins to run on the due date for the submission of the tax return which was not submitted or which contained information which caused an amount of tax to be calculated incorrectly.

(2)        In the case of tax liabilities which do not involve an obligation provided by law to submit tax returns, the limitation period for making an assessment of tax is one year. If an amount of tax is not assessed or is assessed incorrectly due to a taxable person failing to perform or performing unsatisfactorily the obligations imposed thereon by law, the limitation period for making an assessment of tax is four years. A limitation period begins to run on 1 January of the year following the year during which the tax liability arises.

(3)        Acts concerning taxes may prescribe shorter limitation periods than those provided for in subsections (1) and (2) of this section.

(4)        After the expiry of a limitation period, a notice of assessment shall not be issued or amended in the matter concerned and any notice of assessment issued earlier in the tax matter earlier shall not be repealed.

 

§ 99. Suspension of limitation period

(1)        The limitation period for making an assessment of tax is suspended:

1)         if it is not possible to make an assessment of the tax due to force majeure within the last six months of the limitation period, until the circumstances which prevent the assessment of tax from being to made cease to exist;

2)         for the time a notice of assessment is being challenged until the final decision made in the matter enters into force;

3)         for the time of a tax audit from the date the tax audit commences until the date the notice of assessment issued on the basis of the results of the tax audit is delivered or, if no administrative act is issued as a result of the tax audit, until the date the audit report is examined by the taxable person;

4)         as of the preparation of a misdemeanour report until the date on which the decision made in the matter enters into force or the date on which proceedings in the matter are terminated;

5)         as of the date on which criminal proceedings commence until the entry into force of a court judgment or the date on which the criminal proceedings are terminated.

(2)        If a taxable person has requested that the commencement of a tax audit be postponed, the limitation period for making an assessment of tax is suspended as of the date on which the tax audit would have commenced according to the initial letter of notification. In the case specified in clause (1) 3) of this section, the limitation period expires not later than on 31 December of the year during which the closing interview of the tax audit is conducted or the last tax audit activities are performed if the limitation period specified in § 98 of this Act expires or expired during the same year.

 

§ 100. Non-assessment and non-collection of amounts of tax

(1)        An amount of tax is not assessed and a notice of assessment is not issued if the amount of tax is less than 50 kroons unless otherwise provided by an Act concerning a tax or the customs rules.

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

(2)        A tax authority has the right not to assess or collect an amount of tax if the tax authority has ascertained that the expenses related to making an assessment of and collecting the amount of tax exceed the amount of tax or that collection of the amount of tax is hopeless due to the insolvency of the taxable person and the tax authority does not consider it expedient to submit a bankruptcy petition.

 

Division 4

Amendment and Repeal of Notices of Assessment

 

§ 101. Amendment and repeal of notices of assessment

(1)        A notice of assessment may be amended or repealed:

1)         with the consent or at the request of a taxable person, or

2)         if the notice of assessment is prepared by an office of the tax authority which is not competent to prepare a notice in the matter, or

3)         if preparation of the notice of assessment was achieved by fraudulent means or threats or by using other illegal means, or

4)         in order to correct obvious spelling mistakes or calculation errors in the administrative act, or

5)         in other cases provided by law, except in the cases provided for in Division 4 of Chapter 4 of the Administrative Procedure Act.

(2)        In the case specified in clause (1) 1) of this section, a notice of assessment may be amended or repealed in order to reduce a tax liability only if the application for amendment or repeal of the notice of assessment is submitted within the term prescribed for challenging the notice of assessment or if a term which has expired is restored.

(3)        The provisions of subsection (1) of this section also apply to administrative acts by which the preparation, amendment or repeal of a notice of assessment is refused.

(4)        The provisions of § 58 of the Administrative Procedure Act apply to violations of procedural requirements and requirements for formal validity which could not have affected the content of a notice of assessment.

 

§ 102. Amendment and repeal of notice of assessment if new facts or evidence become evident

(1)        A notice of assessment shall be amended or repealed due to new facts or evidence becoming evident:

1)         in order to increase a tax liability, or

2)         in order to reduce a tax liability if the situation that the new facts or evidence became known later was not caused by the intention of the taxable person or by negligence on the part thereof.

(2)        If facts reducing a tax liability become evident at the same time as new facts or evidence resulting in the preparation or amendment of a notice of assessment which increases a tax liability, such facts shall be taken into consideration upon taxation.

(3)        A notice of assessment which is prepared or amended as a result of a tax audit and the repeal of which can no longer be applied for in challenge proceedings or administrative court proceedings may be amended or repealed due to new facts or evidence becoming evident only if such facts or evidence are ascertained in connection with:

1)         a misdemeanour provided for in §§ 152-154 of this Act, which is committed intentionally and concerning which a judgment has entered into force;

2)         a criminal offence concerning which criminal proceedings have been commenced;

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

(4)        In making a decision to amend or repeal a notice of assessment on the bases provided for in clause (3) 1) of this section, a tax authority shall take into consideration whether the public interest that the amount of outstanding tax be assessed and collected outweighs the person’s certainty that the administrative act remains in force, as well as the gravity of the misdemeanour and other circumstances due to which a piece of evidence or fact was not discovered in the course of the audit, including violation of investigation methods by the tax authority.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

 

§ 103. Amendment or repeal of notice of assessment on other grounds

(1)        A notice of assessment shall be amended or repealed:

1)         due to the amendment or repeal of the preliminary administrative act based on which the notice of assessment was prepared, or due to the issue of a new preliminary administrative act in the matter, or

2)         due to an event with retroactive effect, or

3)         in order to prevent double taxation due to notices of assessment which preclude each other, taking account of the provisions of international agreements.

(2)        Notices of assessment which preclude each other are notices by which the same amount of tax or the same tax incentive or tax exemption is imposed on a taxable person several times, the same amount of tax is imposed on several persons or a tax liability for one period of taxation is imposed on a person for several periods of taxation.

(3)        A notice of assessment specified in subsection (2) of this section may be amended or repealed in order to reduce a tax liability if the same amount of tax is imposed on a taxable person several times. If a tax incentive or tax exemption has been applied several times, a notice of assessment may be amended or repealed in order to increase a tax liability if the multiple tax incentive or tax exemption was caused by false information submitted by a taxable person.

(4)        In the case provided for in clause (1) 2) of this section, the limitation period for making an assessment of tax begins to run on 1 January of the year following the year during which the event occurs if evidence pertaining to the tax liability has been preserved.

 

§ 104. Application of provisions of this Division to other administrative acts

(1)        Unless otherwise provided by law, the provisions of this Division concerning the amendment and repeal of notices of assessment also apply to cases where a new administrative act is issued as a result of the repeal of a notice of assessment.

(2)        The provisions of §§ 101-103 of this Act apply to the amendment and repeal of liability decisions. A liability decision shall be repealed or amended even if the extent of the obligation of a person who is liable for payment of the tax arrears of a taxpayer or withholding agent is amended as a result of the preparation, amendment or repeal of the liability decision.

 

Chapter 9

Fulfilment of Tax Claims and Settlement of Tax Liabilities

 

Division 1

Payment and Refund

 

§ 105. Payment

(1)        A taxable person is required to pay an amount of tax and amounts arising from accessory obligations to a tax (§ 31) into the bank account designated therefor by the due date provided for in an Act concerning a tax or the customs rules or, in the cases prescribed by law, by the due date designated by a tax authority.

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

(2)        In the cases prescribed by a tax law or by the customs rules, tax shall be paid to a tax authority in cash or by way of purchasing revenue stamps. The taxes payable upon import or export of goods shall be paid pursuant to the procedure provided by the customs rules.

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

(3)        In the case provided for in subsection (1) of this section, the date of receipt of the amount payable in the bank account of the tax authority shall be deemed to be the date of payment. In the event of compulsory execution carried out by a bailiff, the date of payment of an amount to the bailiff or the date of receipt of the amount in the official bank account of the bailiff shall be deemed to be the date of payment.

(4)        Amounts paid by a taxable person shall be calculated to cover the financial obligations indicated by the taxable person upon payment and in the order they are created.

(5)        The obligation provided for in subsection (1) of this section may be performed through a third party unless otherwise provided by an Act concerning a tax. A tax authority is required to accept performance by a third party.

 

§ 106. Fulfilment of claim for refund

(1)        A claim for refund (§ 33) shall be submitted to a tax authority in writing and the manner of fulfilment of the claim (payment, set-off) shall be indicated. A refund of an overpaid amount may also be applied for in a tax return.

(2)        The amount which a person has the right to have refunded shall be refunded within thirty days as of the receipt of an application unless another term is provided for in an Act concerning a tax. Amounts shall not be refunded in the cases provided for in §§ 107 and 109 of this Act. In the case of a refund exceeding 10 000 000 kroons, a written decision shall be made stating the acts performed in order to verify the excess payment and the name of the official conducting the verification. The decision shall be signed by the head of the regional tax centre of the Tax and Customs Board. A written decision shall also be made if a person applies for the abovementioned amount to be partially set off pursuant to § 108 of this Act.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(3)        If an application for the refund of an amount of tax is submitted prior to the due date for the payment of tax, the amount shall be refunded within thirty days as of the due date for payment.

(4)        If a claim for refund is fulfilled by transferring an amount to a taxable person’s bank account located in a foreign state, the tax authority has the right to deduct the costs of transferring the refunded amount from the refunded amount.

(5)        An overpaid amount of tax shall be refunded from the place of receipt of the tax.

(6)        If the size of a claim for refund does not exceed 50 kroons, the claim for refund shall only be fulfilled on the basis of a written request submitted separately by the entitled person. If no request is submitted, the tax authority shall keep the amount subject to a claim for refund in order to cover future tax liabilities or set-offs of the taxable person.

(7)        If a claim for refund is partially satisfied, a reasoned written decision shall be delivered to the person within the term provided for in subsection (2) or (3) of this section.

 

§ 107. Suspension and extension of fulfilment of claims for refund

(1)        A tax authority for state taxes has the right to suspend the fulfilment of a claim for refund specified in § 106 of this Act if elements of a violation of this Act or Acts concerning taxes have been established in the activities of the taxable person and criminal proceedings or misdemeanour proceedings have been commenced in connection with the violation.

(2)        The fulfilment of a claim for refund shall be suspended until a judgment in the misdemeanour proceedings or a court judgment in a criminal matter enters into force or a ruling is made to terminate the criminal proceedings. A reasoned written decision shall be made regarding suspension of the fulfilment of a claim for refund.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

(3)        If a claim for refund is not sufficiently proven, the tax authority may extend the term for fulfilment of the claim by a reasoned written decision and set a term for the person who submitted the claim for refund to submit additional proof. If proof is not submitted within the set term, the tax authority shall make a decision not to refund the overpaid amount. The provisions concerning notices of assessment (§ 95) apply to the making of such decisions.

(4)        If it becomes evident after the fulfilment of a claim for refund that the fulfilment had no legal basis, the tax authority shall make a decision to recover the overpaid amount. The provisions concerning notices of assessment apply to the making of such decisions.

(5)        If a taxable person has filed a challenge with a tax authority or an action with an administrative court against a decision specified in subsection (1) of this section, the taxable person may apply to the tax authority for fulfilment of the suspended claim for refund if the taxable person provides sufficient security. Security shall be provided and accepted pursuant to §§ 120-127 of this Act.

 

Division 2

Set-off

 

§ 108. Set-off on request of taxable person

(1)        A taxable person may apply for a claim for refund (§ 33) to be set off against amounts of tax, interest, penalty payments, costs of substitutive enforcement or fines payable by the taxable person and administered by the same tax authority. The provisions of subsections 106 (1) and (2) and § 107 of this Act apply to set-offs.

(2)        If an application for set-off is refused or satisfied in part, the tax authority shall make a reasoned written decision in the matter within thirty days as of the submission of the application. If an application for an amount of tax to be set off is submitted prior to the due date for the payment of tax, the abovementioned decision shall be made within thirty days after the due date for payment.

(3)        If it becomes evident after set-off that the set-off had no legal basis, the set-off decision shall be repealed retroactively.

 

§ 109. Set-off by tax authority

(1)        A tax authority for state taxes has the right not to satisfy a claim for refund (§ 33) and to set the amount off against the financial obligations of the taxable person administered by the same tax authority if the due date for payment of such obligations has arrived or arrives before the due date for the refund. Set-offs shall take place in the following order:

1)         amounts of tax;

2)         interest;

3)         penalty payments;

4)         fines;

5)         costs of substitutive enforcement.

(2)        A claim for refund may be set off against a fine if the fine has become collectable.

(3)        If a claim for refund is set off against interest, the tax authority need not set a term for the payment of interest and shall issue a claim for interest in the set-off decision if a claim for interest has not been issued earlier with regard to the interest to be set off.

(4)        A reasoned decision shall be made concerning set-off to which the provisions of subsection 108 (2) of this Act apply. If it becomes evident after set-off that the set-off had no legal basis, the set-off decision shall be repealed retroactively. If the set-off amount does not exceed 50 kroons, the decision concerning the set-off need not be issued to the taxable person, except in the case when the taxable submits a request for the issue of the decision.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

 

§ 110. Prerequisites for set-off

(1)        Set-off provided for in §§ 108 and 109 of this Act is permitted if:

1)         the due date for performance of the obligation has arrived, unless the taxable person is applying for a claim for refund to be set off against future liabilities and except in the cases provided for in subsections 109 (1) and (3) of this Act;

2)         the limitation period for claims to be set off has not expired, the claims have not been deleted or they have not terminated on other grounds;

3)         the tax arrears to be set off are not being paid in instalments.

(2)        Other cases where set-off is permitted or prohibited may be prescribed by law.

 

Chapter 10

Payment of Tax Arrears in Instalments, Writing Off and Forgiveness of Tax Arrears

 

§ 111. Payment of tax arrears in instalments

(1)        A tax authority has the right, at the request of a taxable person with solvency problems, to permit tax arrears to be paid in instalments. The payment of tax arrears in instalments does not relieve a taxpayer from tax liability which become due.

(2)        Amounts of arrears for tax payments not paid by the due date upon the import and export of goods shall not be paid in instalments. Tax arrears of withholding agents incurred as a result of failure to withhold or pay amounts of tax shall also not be paid in instalments.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(3)        A taxable person shall submit a reasoned request to pay tax arrears in instalments and a schedule for payment of the tax arrears.

(4)        An official of a tax authority representing the state, a rural municipality or a city in bankruptcy proceedings may, if a compromise is made, vote for an extension of the term for the payment of tax arrears if a decision concerning the payment of tax arrears in instalments has been made and the decision will enter into force on the date on which the compromise is approved by a court.

(5)        If the payment of tax arrears in instalments is state aid within the meaning of the Competition Act, the tax authority shall apply to the Minister of Finance for permission for the payment of tax arrears in instalments pursuant to the provisions of Chapter 6 of the Competition Act.

(6)        The Minister of Finance shall, by a regulation, establish the procedure for the payment of arrears of state taxes in instalments.

 

§ 112. Decision on payment of tax arrears in instalments

(1)        A tax authority shall make a decision to satisfy or to refuse to satisfy a request for the payment of tax arrears in instalments within twenty days as of receipt of the request. Upon making a decision, the tax authority may alter the schedule for payment of tax arrears submitted by the taxable person. Refusal to satisfy and partial satisfaction of a request shall be reasoned.

(2)        Upon deciding to satisfy a request, the tax authority shall take into consideration the financial situation and economic indicators of the taxable person, the taxable person’s prior performance of obligations arising from Acts concerning taxes, the feasibility of the payment of tax arrears in instalments and, if security is required, the reliability of the security provided and the circumstances specified in subsection (4) of this section. The tax authority has the right to request that documents which are necessary to establish these circumstances be submitted. In such case, the tax authority shall make a decision on the request within ten days as of the submission of the documents.

(3)        The tax authority has the right to request security upon the payment of tax arrears in instalments. Security shall not be requested from a taxable person who is bankrupt and whose tax arrears are to be paid in instalments in order to make a compromise in bankruptcy proceedings. A request for security shall be prepared in writing unless the obligation to provide security arises from law. If security is required, a decision on the payment of tax arrears in instalments shall be made within five working days as of the date on which the security is provided.

(4)        A tax authority has the right to deny a request for the payment of tax arrears in instalments if:

1)         the request is not reasoned or is insufficiently reasoned, or

2)         the taxable person has been issued an order to pay the tax arrears within forty-eight hours as of the date of receipt of the order (§ 129), or

3)         the taxable person does not keep accounts pursuant to the procedure provided by legislation, does not submit tax returns or does not preserve documents, or

4)         the taxable person fails to provide the security required or the tax authority does not consider that the security provided is sufficient or trustworthy, or

5)         upon consideration of the compromise proposal made by the person who owes arrears in bankruptcy proceedings, the tax authority finds that the financial situation of the debtor does not enable the person to perform the obligations assumed as a result of the compromise, or

6)         other circumstances or grounds exist which cause the tax authority not to consider the payment of the tax arrears in instalments to be expedient.

 

§ 113. Revocation of decision on payment of tax arrears in instalments

(1)        If a taxable person does not meet the schedule for the payment of tax arrears, does not pay taxes which become due during the period of validity of the schedule on time, does not perform an obligation provided for in the Law of Property Act (RT I 1993, 39, 590; 1999, 44, 509; 2001, 34, 185; 93, 565; 2002, 47, 297; 53, 336; 2003, 13, 64; 17, 95) to keep a thing encumbered with a pledge in order to guarantee tax arrears or, in the event of a decrease in the value of security, does not submit replacement security accepted by the tax authority, the tax authority has the right to implement one or several of the following measures:

1)         to revoke the decision on the payment of tax arrears in instalments;

2)         to revoke a reduction in the interest rate (subsection 117 (2));

3)         to calculate interest retroactively at a rate established pursuant to subsection 117 (1) of this Act on the amount of tax which is being paid in instalments.

(2)        A tax authority has the right to revoke a decision on the payment of tax arrears in instalments made in order to make a compromise if the compromise is annulled pursuant to the Bankruptcy Act (RT 1992, 31, 403; RT I 1997, 18, 302; 1998, 2, 46; 36/37, 552; 1999, 10, 155; 2000, 13, 93; 54, 353; 2001, 56, 336; 82, 488; 93, 565; 2002, 44, 284).

 

§ 114. Writing off and forgiveness of tax arrears

(1)        A tax authority for state taxes shall write off:

1)         the tax arrears of a legal person upon the dissolution of the legal person with bankruptcy or liquidation proceedings or upon the compulsory dissolution of the legal person without liquidation proceedings if no third party is liable for performance of the tax liabilities or the tax arrears cannot be collected from such third party;

2)         the tax arrears of a natural person upon the death or declaration of death of the natural person if no estate exists which could be subject to a claim for payment, or tax arrears to the extent exceeding the value of the inventoried estate from which claims with higher ranking have been satisfied pursuant to the provisions of the Law of Succession Act.

(2)        A tax authority for state taxes may forgive tax arrears in order to make a compromise in bankruptcy proceedings. If a tax authority agrees to a compromise proposal, the tax authority shall make a decision to forgive tax arrears which enters into force on the date on which the compromise is approved.

(3)        A tax authority for state taxes may forgive the tax arrears of a natural person on the reasoned written request of the natural person if collection of the tax arrears is hopeless or would be unfair due to circumstances beyond the control of the taxable person, including force majeure. The tax authority has the right to request that documents which are necessary to establish the abovementioned circumstances be submitted. In such case, the tax authority may make a decision within thirty days as of the submission of the documents. The provisions of subsection 111 (5) of this Act apply to the forgiveness of tax arrears.

(4)        The Minister of Finance shall establish the procedure for the writing off and forgiveness of tax arrears by a regulation.

 

Chapter 11

Interest

 

§ 115. Interest payable by taxable person

(1)        If a taxable person fails to pay tax by the due date prescribed by law, the taxable person is required to calculate and pay interest on the amount of tax outstanding by the due date. Interest shall be calculated as of the day following the day on which payment of the tax was due pursuant to law until the date of payment or set-off, inclusive of the latter.

(2)        If, on the request of a taxable person, an amount of tax is refunded to the taxable person or is transferred to cover other tax liabilities of the taxable person and if such amount of tax is greater than that due to be refunded or transferred pursuant to an Act concerning a tax, the taxable person is required to calculate and pay interest on the amount refunded to the taxable person or transferred to cover other liabilities without basis. Interest shall be calculated as of the day on which the amount was refunded to the taxable person or transferred to cover other tax liabilities until the date of payment or set-off of the amount, inclusive of the latter.

(3)        If a taxable person fails to pay interest pursuant to the provisions of subsection (1) of this section, the tax authority shall issue a claim for interest stating the number of days delayed, the interest rate, the amount of interest payable and the term for payment. The term shall not be shorter than ten days. The provisions concerning notices of assessment (§ 95) apply to claims for interest.

(4)        A claim for interest may be issued in a notice of assessment, a liability decision, a set-off decision or a warning simultaneously with the assessment, set-off or collection of an amount of tax. If tax arrears are collected by way of compulsory execution, interest shall be calculated by the tax authority or bailiff conducting the enforcement proceedings. It is not necessary to issue a separate claim for interest in order to collect interest calculated in the course of enforcement proceedings and the minimum rate specified in subsection 119 (3) of this Act does not apply thereto.

(5)        The provisions of subsection (1) of this section also apply if the taxable person fails to make advance payments by the due date prescribed by law.

(6)        Interest is paid into the place of receipt of the corresponding tax.

 

§ 116. Interest payable to taxable person

(1)        If a taxable person has paid an amount of tax, an amount of tax has been collected from a taxable person or an amount of tax has been set off against a claim for refund submitted by a taxable person on the basis of a notice of assessment or liability decision and the amount of tax exceeds the amount of tax due according to an Act concerning a tax, the tax authority is required to calculate interest on the overpaid amount for the benefit of the taxable person. Interest shall be calculated as of the date of receipt of the overpaid amount in the bank account of the tax authority or the date of set-off by the tax authority until the date of refund or set-off of the overpaid amount, inclusive of the latter.

(2)        If a tax authority fails to fulfil a claim for refund (§ 33) within the term prescribed by law, the tax authority is required to calculate interest on the amount outstanding by the due date. Interest shall be calculated as of the day on which the overpaid amount was to be refunded until the date of payment or set-off of the amount, inclusive of the latter.

(3)        If a tax authority has, pursuant to the provisions of subsection 107 (3) of this Act, set a term for a taxable person to submit additional documents, interest shall not be calculated for the benefit of the taxable person as of the date of delivery of a corresponding decision until the date of submission of the additional documents.

(4)        A taxable person may apply for the payment of interest specified in subsections (1) and (2) of this section within two years as of:

1)         the date of entry into force of a decision to amend or repeal a notice of assessment or a decision to refuse to fulfil a claim for refund;

2)         the entry into force of a judgment of acquittal regarding a misdemeanour which caused a claim for refund to be suspended or a judgment of acquittal in a criminal matter regarding such a claim, or as of the date on which a ruling on terminating criminal proceedings regarding such a claim is made, or as of the date on which a judgment terminating misdemeanour proceedings regarding such a claim is made.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

(5)        A tax authority is required to pay interest within fifteen days as of the date of receipt of an application specified in subsection (4) of this section. A reasoned written decision shall be made upon refusal to pay interest.

(6)        A taxable person has the right to apply for interest payable to the taxable person to be set off pursuant to § 108 of this Act.

 

§ 117. Interest rate

(1)        The rate of interest provided for in §§ 115 and 116 of this Act is 0.06 per cent per day.

(2)        Upon the payment of tax arrears in instalments, a tax authority has the right to reduce the interest rate by up to 50 per cent as of the date of making the decision on payment of the tax arrears in instalments.

 

§ 118. Limitation period for calculation of interest

(1)        The limitation period for the calculation of interest is one year as of the date of payment or set-off of an amount of tax or an amount refunded to a person without basis.

(2)        The provisions of §§ 98 and 99 of this Act apply to the limitation period for the calculation of interest on unpaid amounts of tax or amounts of tax which are not set off or amounts refunded to a person by the state without basis.

(3)        A claim for interest shall not be submitted after expiry of the period specified in subsection (1) or (2) of this section.

 

§ 119. Non-calculation of interest

(1)        The calculation of interest shall be suspended:

1)         on tax liabilities not performed by a credit institution by the due date for the duration of a moratorium on the credit institution;

2)         upon the declaration of bankruptcy of a taxable person;

3)         on tax liabilities not performed by the due date if the tax liabilities are being performed pursuant to a valid compromise approved in bankruptcy proceedings;

4)         on tax liabilities related to an estate which are not performed by the due date, as of the opening of the succession until acceptance of the estate by successors.

(2)        Interest shall not be calculated on an amount of tax outstanding on the due date or a part thereof which is equal to an amount to be paid or refunded to a taxable person by the tax authority pursuant to this Act, an Act concerning a tax or the customs rules.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472; 13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

(3)        Unless otherwise prescribed by an Act concerning a tax, a claim for interest is not submitted if the amount of interest is less than 50 kroons.

(4)        If, for reasons independent of a taxable person, a tax authority sends a tax notice specified in § 88 of this Act or a land tax notice to the taxable person later than thirty days before the due date for payment of the tax and if the amount indicated in the tax notice is paid after the due date for payment of the tax, interest shall not be calculated for the same number of days as the number of days by which the tax authority was late in sending of the tax notice.

(5)        On the reasoned request of a taxable person, a tax authority shall not calculate interest on amounts of tax declared and paid which are less than the amounts prescribed by law or on amounts the refund of which is claimed and which exceed amounts prescribed by law if such amounts are the result of misleading or false information provided by the tax authority in writing, unless:

1)         the taxable person was aware that the information was misleading or false when declaring or paying tax or submitting a claim for refund;

2)         the taxable person caused the false information to be issued by threats or duress, by submitting misleading or false information to the tax authority or by using other illegal means.

(6)        A tax authority has the right not to calculate or collect interest on the grounds provided for in § 100 of this Act.

(7)        Interest shall not be calculated on an amount of customs duty which payable for the reason that the customs authorities of the exporting country or another authorised body of the exporting country has retrospectively revoked the document certifying preferential origin or declared the document certifying preferential origin not conforming to the requirements and the taxable person was not aware of the issue of the document certifying preferential origin on incorrect bases.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

 

Chapter 12

Security

 

§ 120. Security

(1)        A tax authority has the right to request the provision of security:

1)         upon the payment of tax arrears in instalments (§ 111);

2)         upon suspension of the execution of an administrative act (subsection 107 (5), § 146)

3)         in other cases prescribed by law.

(11)      Upon placement of goods under customs supervision or release thereof for free circulation, a tax authority has the right to demand a security to cover taxes payable in connection with a custom debt. The provision, use and release of security and the bases for calculation of amounts of security shall be carried out pursuant to the procedure provided for in the customs rules.

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

(2)        No security shall be required if the amount of a claim is less than 1000 kroons.

(3)        No security shall be required from state, rural municipality and city agencies.

 

§ 121. Scope of security

A tax authority shall determine the amount of security to be provided. The tax authority shall determine the scope of security based on the size of the secured claim and the extent of the costs of possible compulsory execution.

 

§ 122. Types of security

Unless otherwise provided by an Act concerning a tax, a person who is obligated to provide security may choose between the following types of security:

1)         surety;

2)         an amount of security paid into the bank account of a tax authority as a deposit;

3)         a registered security over movables or a mortgage established for the benefit of the state, a rural municipality or a city.

 

§ 123. Surety

(1)        Any person who is accepted by a tax authority as a surety and who undertakes to pay the amount indicated in a contract of suretyship at the request of the tax authority may act as a surety.

(2)        A tax authority has the right not to accept a surety if:

1)         the surety does not have sufficient property in order to secure the tax arrears;

2)         the amount in which security is provided is not sufficient in the opinion of the tax authority;

3)         the previous activities, financial situation or reputation of the surety give sufficient reason to doubt the reliability of the security.

 

§ 124. Pledge

(1)        Pledges shall be established pursuant to the procedure provided for in the Law of Property Act or the Commercial Pledges Act (RT I 1996, 45, 848; 49, correction notice; 1997, 48, 774; 2001, 93, 565; 2002, 53, 336).

(2)        On behalf of the state, pledge contracts shall be signed by the head or deputy head of a tax authority for state taxes or a person authorised by the head of a tax authority for state taxes. On behalf of a rural municipality or city, pledge contracts shall be signed by the head or deputy head of a tax authority for local taxes or a person authorised by the head of a tax authority for local taxes.

(3)        A tax authority has the right not to accept a pledge proposed as security if, in the opinion of the tax authority, the value of the object of the pledge is not sufficient to secure the tax arrears or the object of the pledge is not easily sold or will lead to excessive administrative costs.

(4)        If a pledge is no longer sufficient to secure a claim as a result of a reduction in the value of the object of the pledge, a taxable person is required to provide additional security.

 

§ 125. Replacement of security

(1)        A person who provides security has the right to replace the security with another security permitted by this Act or an Act concerning a tax.

(2)        A tax authority has the right to request that a security be replaced if the value of the security falls or the security is no longer sufficient to secure tax arrears which have been or may be incurred.

(3)        A tax authority has the right not to accept a replacement security if the security is not sufficient to secure tax arrears or is not reliable.

 

§ 126. Release of security

(1)        Unless otherwise provided by law or a regulation, a tax authority shall release a security if:

1)         the claim for the securing of which the security was provided does not arise;

2)         the claim for the securing of which the security was provided terminates;

3)         the claim for the securing of which the security was provided has been invalidated or declared null and void.

(2)        A surety shall be notified of the release of the security within ten days as of the occurrence of a fact provided for in subsection (1) of this section. Entries of registered securities over movables and of mortgages shall be deleted pursuant to the procedure provided by law.

(3)        An amount of security paid into the bank account of a tax authority shall be released within ten days as of the submission of a corresponding request unless otherwise prescribed by law or a regulation. A request for the release of an amount of security may be submitted within three years as of the occurrence of a fact provided for in subsection (1) of this section. If a request is not submitted during the abovementioned term, the tax authority may transfer the amount of security to the state budget.

(4)        A taxable person may request that security not be released and that it be used in order to secure other claims of the tax authority which have arisen or which may arise.

 

§ 127. Use of security

(1)        In order to make a claim against a surety, the surety shall be notified of an obligation which the principal debtor has not performed. If the surety has not commenced payment of the tax arrears of the principal debtor within one month as of the date on which the tax authority sends the corresponding notice, the tax authority has the right to file an action with a court in order to collect the tax arrears.

(2)        Upon failure to fulfil a secured claim, the amount of security paid into the bank account of the tax authority shall be calculated to cover the claim. If security is provided to cover several claims, the provisions of subsection 128 (5) of this Act apply to the order of satisfaction of the claims.

(3)        Upon failure to fulfil a claim secured by a registered security over movables, a tax authority has the right to sell the security pursuant to the procedure provided by legislation regulating enforcement procedure.

 

Chapter 13

Compulsory Execution

 

Division 1

Compulsory Execution of Claims Arising from Tax Arrears

 

§ 128. Compulsory execution

(1)        A tax authority is required to collect tax arrears unpaid by a taxable person. Compulsory execution of claims arising from tax arrears shall be conducted pursuant to the procedure provided for in this Chapter and in legislation regulating enforcement procedure. If a taxable person is declared bankrupt, tax arrears shall be settled pursuant to the procedure provided for in the Bankruptcy Act.

(2)        Compulsory execution of claims arising from tax arrears is permitted if:

1)         the due date for performance of the obligation has arrived and the claim is collectable;

2)         the taxable person has been notified of the administrative act containing the claim pursuant to the procedure provided by law;

3)         the tax arrears are not being paid in instalments;

4)         the limitation period for the tax arrears has not expired and the tax arrears have not been forgiven or have not extinguished on other grounds;

5)         execution of the administrative act has not been suspended.

(3)        Compulsory execution of a claim for an amount of tax declared and not paid by a taxable person or an amount of tax payable pursuant to a tax notice is permitted only after a term has been set at least once for the taxable person to pay the tax arrears together with a warning stating the consequences of failure to perform the obligation within the term (§ 129).

(4)        A tax authority may also collect fines imposed by the tax authority and other financial obligations arising from this Act, including the costs of substitutive enforcement and penalty payments and the costs of the performance of obligations by interpreters, translators, experts or third parties if, pursuant to law, such costs are payable by the taxable person. In such case, the provisions concerning the compulsory execution of claims arising from tax arrears apply to the compulsory execution of such claims. If a person who is obligated to cover costs or pay a penalty payment has not incurred tax arrears or if a tax authority has not commenced compulsory execution of claims arising from the tax arrears, the tax authority may submit a request for compulsory execution of the abovementioned claims to a bailiff.

(5)        The tax authority shall first collect the amount of tax to be paid and thereafter interest. If other financial obligations arising from this Act are subject to compulsory execution together with tax arrears, the arrears shall be collected in the order provided for in subsection 109 (1) of this Act. If amounts of money recovered as a result of compulsory execution are not sufficient to satisfy all tax claims, the amounts of money recovered as a result of compulsory execution shall be calculated to cover different taxes in proportion to the amount of the claims in respect of the taxes. Amounts of money of up to 1000 kroons recovered as a result of compulsory execution may be transferred to cover tax liabilities in the order they are created.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

(51)      If tax arrears to be collected arise form tax liabilities related to the incurrence of a customs debt and the amounts of money recovered as a result of compulsory execution are not sufficient to satisfy all tax claims, the amounts of money recovered as a result of compulsory execution shall be first calculated to cover import and export duties.

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

(6)        If amounts of money recovered as a result of compulsory execution conducted by a bailiff are not sufficient to satisfy all claims, the amount received shall first be calculated to cover the costs of execution and the remuneration of the bailiff and, thereafter, the claims shall be satisfied in the order provided for in subsection (5) of this section, taking into consideration the specification provided for in subsection 51.

(13.04.2004 entered into force 01.05.2004 – RT I 2004, 28, 188)

(7)        A tax authority for a state tax may, by way of compulsory execution, collect state tax arrears of rural municipality and city agencies. If a state agency incurs tax arrears, the administrative authority exercising supervisory control over the state agency shall be addressed to settle the matter.

(8)        A tax authority has the right to waive compulsory execution if the expenses related to compulsory execution exceed the amount to be collected or collection of the amount is hopeless due to the insolvency of the taxable person and if it is not expedient to submit a bankruptcy petition.

 

§ 129. Warning of compulsory execution

(1)        A tax authority has the right to issue an order to a taxable person to pay tax arrears within ten days as of the date of receipt of the order.

(2)        A tax authority has the right to issue an order to a taxable person to pay tax arrears within forty-eight hours as of the delivery of the order if the tax authority has reason to believe that any delay in the collection of tax arrears may render collection of the tax arrears impossible.

(3)        In addition to the provisions of § 46 of this Act, an order issued pursuant to subsection (1) or (2) of this section shall contain a warning concerning the commencement of compulsory execution if the obligation is not performed within the term.

(4)        If several persons are solidarily liable for the payment of tax arrears, a tax authority has the right to issue a joint order to such persons.

 

§ 130. Enforcement action by tax authority

(1)        If a taxable person fails to pay tax arrears within the term set by a tax authority pursuant to § 129 of this Act or in a notice of assessment or a liability decision, the tax authority shall commence collection of the tax arrears by way of compulsory execution. A tax authority has the right to perform the following acts:

1)         to apply for a prohibition on the transfer of an immovable to be entered in the land register;

2)         to apply for a prohibition on the transfer of a structure which is a movable to be entered in the building register;

3)         to apply for a prohibition on the transfer of a vehicle to be entered in the relevant register;

4)         to apply for a prohibition on the transfer of a ship to be entered in the ship register;

5)         to issue an order to freeze securities or a securities account pursuant to the provisions of the Estonian Central Register of Securities Act (RT I 2000, 57, 373; 2001, 48, 268; 79, 480; 89, 532; 93, 565; 2002, 23, 131; 63, 387; 110, 657; 2003, 51, 355);

6)         to make a claim for payment against financial claims and proprietary rights pursuant to the procedure provided for in this Act or in legislation regulating enforcement procedure.

(11)      In order to perform the enforcement action specified in subsection (1) of this section, the person specified in subsection 46 (5) shall submit a corresponding written application.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(2)        A tax authority may apply to a bailiff for the collection of tax arrears if acts performed by the tax authority pursuant to clause (1) 6) of this section have not yielded any results. If the enforcement proceedings commenced by a tax authority are continued by a bailiff, the person who owes arrears need not be issued with a new warning. If enforcement proceedings are continued by a bailiff, the prohibitions and seizures imposed by the tax authority shall remain valid.

 

§ 131. Seizure of bank account

(1)        A tax authority has the right to issue orders to credit institutions for the seizure of the bank account of a person who owes arrears or for the transfer of money from the bank account of a debtor to the bank account of the tax authority in the amount of the tax arrears.

(2)        A credit institution is required to comply without delay with an order issued by a tax authority for the seizure of the bank account of a taxable person. If the amount in the bank account is smaller than the amount to be transferred according to the order of the tax authority, the credit institution is required to comply with the order for the transfer of the tax arrears in an amount equal to the amount in the bank account of the taxable person and, in the event of future receipts of money in the bank account of the person who owes arrears, transfer the money to the bank account of the tax authority until the amount indicated in the order is paid, unless the tax authority has granted permission to access the seized bank account.

(3)        Upon the collection of the tax arrears or seizure of the bank account of a natural person, the amount of the minimum monthly wage for the person who owes arrears and for each of his or her dependant family members shall not be subject to collection or seizure by a tax authority each month. Information on the dependants shall be given to the tax authority by the person who shall, at the request of the tax authority, submit the necessary documents. Upon issue of the order, the tax authority may take the information available thereto on the dependants of the person as the basis for the issue of the order. If the person submits different information on his or her dependants after the issue of the order, the order shall be amended correspondingly.

(20.04.2005 entered into force 01.07.2005 – RT I 2005, 25, 193)

(4)        Payments from a seized bank account may only be made with the permission of a tax authority. A seized bank account is accessible with the permission of a tax authority. A tax authority shall issue an order for the release of a bank account from seizure within three working days after payment of the tax arrears.

(5)        A credit institution is prohibited from providing a taxable person with access to a bank account if an order of a tax authority concerning the seizure of the bank account of the taxable person has been received.

(6)        Upon seizure of the bank account of a taxable person, the credit institution is required to communicate immediately, by post or electronic means, the following information to the tax authority which issued the order:

1)         the date and time of receipt of the order;

2)         the name and title of the employee who received the order;

3)         the date and time of seizure of the bank account;

4)         the balance in the bank account at the moment of seizure of the bank account.

 

§ 132. Limitation period for compulsory execution

(1)        The limitation period for the compulsory execution of claims arising from tax arrears is seven years. The limitation period begins to run on 1 January of the year following the year during which the due date for the performance of an obligation arrives. The limitation period for the compulsory execution of claims arising from tax arrears collectable pursuant to a notice of assessment or liability decision begins to run on 1 January of the year following the year of delivery of the notice of assessment or liability decision. The limitation period for the compulsory execution of claims arising from other financial obligations collectable by a tax authority is one year as of 1 January of the year following the year of the filing of the claim.

(2)        The limitation period for the compulsory execution of a claim for interest specified in subsection 115 (3) of this Act is one year as of 1 January of the year following the year of the filing of the claim.

(3)        Upon expiry of the limitation period, the tax liability and accessory obligations related thereto terminate.

(4)        A limitation period is interrupted:

1)         if the term for the payment of taxes is extended;

2)         if the tax arrears are to be paid in instalments;

3)         if a bankruptcy petition is submitted;

4)         if enforcement proceedings are commenced in order to collect tax arrears.

(5)        The running of a new limitation period shall be calculated as of 1 January of the year following the year during which the grounds for interruption of the limitation period cease to exist.

(6)        A limitation period shall be interrupted only with regard to the amount which is related to the grounds for interruption of the limitation period.

(7)        Compulsory execution of claims arising from tax arrears is not permitted after expiry of the limitation period provided for in this section.

 

§ 133. Competence of tax authority as representative of state, rural municipality or city in liquidation, bankruptcy and judicial proceedings

 (1)       Upon the collection of tax arrears in liquidation, bankruptcy or judicial proceedings, the state is represented by the Tax and Customs Board.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(2)        Upon the collection of tax arrears in liquidation, bankruptcy or judicial proceedings, a rural municipality or city shall be represented by a rural municipality or city administrative agency with the authority of a tax authority or by a regional tax centre of the Tax and Customs Board within the limits of the competence transferred to the office by a contract under public law entered into pursuant to the Local Taxes Act.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

 (3)       A tax authority may submit a petition for the declaration of bankruptcy of a taxable person as bankrupt if enforcement action taken by the tax authority or a bailiff does not result in the collection of tax arrears.

 

§ 134. Compulsory execution upon granting international professional assistance

(1)        A tax authority may exercise the powers provided for in this Division in order to grant international professional assistance if the public authorities of a foreign state apply to the competent public authorities of the Republic of Estonia seeking the compulsory execution of tax liabilities of a taxable person who resides or is located in Estonia or who owns property in Estonia or of accessory obligations related to such tax liabilities.

(2)        In the case provided for in subsection (1) of this section, compulsory execution shall be conducted pursuant to an execution document submitted by the foreign state in which the amount and validity of the claim are stated. Upon the issue of a warning to a taxable person concerning the compulsory execution of claims arising from tax arrears incurred in a foreign state, the tax authority shall indicate that, in order to challenge the administrative act which is the basis for compulsory execution, the challenge or complaint must be filed with the competent public authorities of the foreign state.

 

Division 2

Ensuring Performance of Non-Monetary Obligations

 

§ 135. Application of coercive measures

(1)        The provisions of the Substitutive Enforcement and Penalty Payment Act (RT I 2001, 50, 283; 94, 580) apply to the penalty payments and substitutive enforcement prescribed in §§ 67, 71 and 91 of this Act or in an Act concerning a tax, taking account of the specifications provided for in this Act or the Act concerning a tax. A coercive measure may be applied repeatedly until the objective intended by an administrative act is achieved.

(2)        The application of a coercive measure may be suspended by an administrative court judge pursuant to the procedure prescribed in the Code of Administrative Court Procedure (RT I 1999, 31, 425; 33, correction notice; 40, correction notice; 96, 846; 2000, 51, 321; 2001, 53, 313; 58, 355; 2002, 29, 174; 50, 313; 53, 336; 62, 376; 2003, 13, 67; 23, 140) or, on the basis of a reasoned request, by the tax authority which issued an administrative act. A tax authority may postpone the application of a coercive measure and issue a new warning setting a new term for compliance with an administrative act. A tax authority shall not postpone the application of a coercive measure for longer than two months. A decision to amend the application of a coercive measure shall be delivered pursuant to the procedure provided for in Chapter 4 of this Act.

(3)        Penalty payments and the costs of substitutive enforcement shall be collected by way of compulsory execution pursuant to the provisions of subsection 128 (4) of this Act.

 

§ 136. Warning of application of coercive measure

(1)        A person with regard to whom a coercive measure is to be applied shall be set a term for the performance of an obligation and the person shall be warned that coercive measures may be applied if the obligation is not performed by the due date.

(2)        Warnings shall be prepared in writing. A warning may be issued in an administrative act if a coercive measure is applied in order to ensure compliance with the administrative act.

(3)        The following shall set be out in a warning:

1)         the name and address of the person to whom the warning is issued;

2)         a reference to the administrative act imposing the obligation with which failure to comply will result in the application of a coercive measure;

3)         the due date for voluntary performance of the obligation, except in the case of an obligation to refrain from a particular activity;

4)         the type of coercive measure or, in the case of a penalty payment, the size of the penalty payment to be applied in the event of failure to perform the obligation by the due date;

5)         the name of the tax authority which issued the warning;

6)         the given name and surname of the official competent to sign and his or her signature;

7)         the date of issue of the warning.

(4)        If a tax authority intends to apply several coercive measures to ensure performance of the same obligation, the order of application and the dates of commencement of application of the coercive measures shall be indicated. The tax authority may apply a new coercive measure only if compliance with an administrative act is not achieved by the initial coercive measure.

(5)        If a tax authority wishes to apply coercive measures of the same type to ensure the performance of several obligations, the coercive measure shall be indicated separately for each obligation in a warning.

(6)        If a person is required by an administrative act to refrain from acting or to tolerate measures taken by a tax authority, a warning may state that a coercive measure may be re-applied upon each failure to comply with the obligation.

 

Chapter 14

Challenge Proceedings

 

§ 137. Right to file challenge

(1)        If a taxable person or another participant in proceedings finds that the rights of the person have been violated or freedom of the person has been restricted by a tax notice, notice of assessment, liability decision, order or another administrative act issued by a tax authority, the person has the right to apply for the repeal or amendment of the administrative act or for the issue of a new administrative act.

(2)        Participants in proceedings also have the right to challenge:

1)         a delay;

2)         an omission;

3)         refusal to remove an official or expert;

4)         the return of an application for the issue of an administrative act;

5)         other measures taken by a tax authority.

(3)        A challenge against an administrative act or measure of the Tax and Customs Board shall be filed with the Tax and Customs Board. If the regional tax centre has issued the administrative act of the Tax and Customs Board or performed the transaction in question, the challenge shall be filed to the Tax and Customs Board through the regional centre.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(4)        The provisions of this Chapter apply to the adjudication of challenges against administrative acts or measures of tax authorities for local taxes taking account of the specifications provided for in the Local Taxes Act.

 

§ 138. Term for filing challenge

(1)        A challenge against an administrative act shall be filed within thirty days as of the date of notification of or delivery of the administrative act.

(2)        A challenge against a measure shall be filed within thirty days as of the day when the person filing the challenge becomes or should have become aware of the challenged measure.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

 

§ 139. Requirements for challenges

(1)        A challenge shall be filed in writing.

(2)        The following shall be set out in a challenge:

1)         the name of the administrative authority with which the challenge is filed;

2)         the name, postal address and telecommunications numbers of the person filing the challenge;

3)         the name of the challenged administrative act and the date of issue thereof or the time of the challenged measure;

4)         the content of the challenged administrative act or measure;

5)         the reasons why the person filing the challenge finds that the administrative act or measure violates the rights of the person;

6)         the clearly expressed request of the person filing the challenge;

7)         certification by the person filing the challenge that no judgment has entered into force and no court proceedings are being conducted concerning the matter;

8)         a list of documents annexed to the challenge.

(3)        A challenge shall be signed by the person filing the challenge or by the representative of such person. The representative of the person filing a challenge shall append his or her authorisation document thereto unless such document has been submitted before.

(4)        The relevant documents shall be appended to a challenge. If it is not possible to submit the documents, the location of the documents shall be indicated in the challenge.

 

§ 140. Restoration of term for filing challenge

The term for filing a challenge may be restored under the conditions provided for in § 50 of this Act.

 

§ 141. Withdrawal of challenge

(1)        A person who files a challenge has the right to withdraw the challenge prior to the making of a decision. A notice of withdrawal of a challenge shall be filed in writing or orally. The tax authority shall record an oral withdrawal and the record shall be signed by the person withdrawing the challenge.

(2)        The withdrawal of a challenge does not preclude the filing of a new challenge during the term for filing challenges.

 

§ 142. Deficiencies in challenge

If a challenge does not comply with the requirements provided for in § 139 of this Act, the tax authority with which the challenge is filed shall draw the attention of the person who filed the challenge to the deficiencies in the challenge and, if necessary, grant a term of up to ten days to the person who filed the challenge to eliminate the deficiencies.

 

§ 143. Return of challenge

(1)        A challenge shall be returned if:

1)         the person who filed the challenge has no right to file the challenge;

2)         the person who filed the challenge has failed to eliminate the deficiencies in the challenge within the designated term;

3)         the term for filing the challenge has expired and is not restored;

4)         a court judgment has entered into force concerning the matter;

5)         judicial proceedings are being conducted concerning the matter.

(2)        If the review of a challenge is not within the competence of an administrative authority, the administrative authority shall return the challenge and explain where the person has recourse or shall deliver the challenge to the competent administrative authority and notify the person who filed the challenge of such delivery.

(3)        A person shall be notified of the return of a challenge by a written decision within seven days as of the filing of the challenge and the grounds for the return and an explanation concerning the procedure for further recourse shall be set out in the decision.

 

§ 144. Contestation of return of challenge

(1)        A person who filed a challenge may file a complaint with the Tax and Customs Board against a decision made by a regional tax centre of the Tax and Customs Board to return the challenge. A person who filed a challenge may file a complaint with the same authority against a decision made by a regional tax centre of the Tax and Customs Board to return the challenge.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(2)        If an agency specified in subsection (1) of this section finds that the return of a challenge was not justified, the agency shall accept the challenge.

(3)        If an agency specified in subsection (1) of this section finds that a complaint against the return of a challenge is not justified, the agency shall deny the complaint and shall return the challenge.

(4)        A person shall be notified of the denial of a complaint against the return of a challenge by a written decision within seven days as of the filing of the complaint and the grounds for the denial and an explanation concerning the procedure for further recourse shall be set out in the decision.

 

§ 145. Delivery of challenge

(1)        If a challenge complies with the requirements provided for in this Act, the regional tax centre of the Tax and Customs Board shall deliver the challenge together with the necessary documents and its opinion in writing to the Tax and Customs Board within seven days.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(2)        If a regional tax centre of the Tax and Customs Board which issued an administrative act finds that the challenge against it is reasoned, the challenge may be satisfied by the regional tax centre of the Tax and Customs Board.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

 

§ 146. Suspension of execution of administrative act

(1)        The filing of a challenge shall not prevent the challenged administrative act from being executed, except in the cases provided for in subsections (2) and (3) of this section.

(2)        The execution of orders issued to a third party pursuant to §§ 61 or 62 of this Act shall be suspended until the final decision made in the matter enters into force.

(3)        An agency adjudicating a challenge may suspend the execution of an administrative act if this is necessary. If the execution of an administrative act is suspended at the request of a taxable person, the tax authority has the right to request that the taxable person provide security if the suspended administrative act contains a financial obligation. Security shall be provided and accepted pursuant to the provisions of §§ 120-127 of this Act.

 

§ 147. Review of challenge

(1)        Upon the review of a challenge, the lawfulness and purposefulness of the issue of an administrative act shall be verified.

(2)        A tax authority which reviews a challenge shall:

1)         request that the corresponding administrative authority submit documents concerning the administrative act, if necessary;

2)         conduct on-the-spot visits of inspection, if necessary;

3)         involve experts or specialists, if necessary;

4)         require written explanations from the administrative authority which issued the administrative act, if necessary;

5)         hear the explanations of interested persons;

6)         resolve issues concerning suspension of the execution of the administrative act;

7)         perform other acts provided by law.

(3)        A challenge shall be reviewed within thirty days after the receipt thereof by the tax authority adjudicating the challenge.

(4)        If a challenge needs to be examined further, the tax authority which reviews the challenge may, by a written decision, extend the term for review of the challenge by up to ten days.

(5)        A tax authority which reviews a challenge may, if necessary, request that the person who filed the challenge submit additional evidence. In such case, a challenge shall be reviewed within five days as of the submission of evidence but the tax authority has no obligation to review the challenge earlier than within the term provided for in subsection (3) of this section.

 

§ 148. Authority of tax authority upon review of challenge

(1)        Upon adjudication of the matter on the merits of a challenge, the tax authority has the right to:

1)         satisfy the challenge and repeal an administrative act either in full or in part and to eliminate the factual consequences of the administrative act;

2)         issue an administrative act, take a measure or make a new decision on the merits of the matter;

3)         issue a precept to the agency which issued the administrative act to issue an administrative act, to take a measure or for a new resolution of the matter;

4)         restore the situation prior to the measure being taken or assign such task to the agency which took the measure;

5)         dismiss the challenge.

(2)        If a decision to repeal or amend an administrative act made on a challenge affects the rights of a third party, the third party shall be granted the opportunity to submit explanations and objections prior to the decision being made.

(3)        If the person who filed a challenge has filed or files an action in the matter with a court within the term for review of the challenge, the tax authority has the right to return the challenge and not to make a decision on the challenge.

 

§ 149. Decision on challenge

(1)        A decision on a challenge shall be in writing and shall indicate the resolution concerning adjudication of the challenge. A decision on a challenge shall be delivered to the person who filed the challenge and to third parties involved in challenge proceedings pursuant to the procedure provided for in Chapter 4 of this Act.

(2)        If a challenge is satisfied, the tax authority is not required to prepare a decision on the challenge but shall take the desired measure or amend an administrative act in the desired manner.

(3)        Upon dismissal of a challenge, a judgment on the challenge shall, in addition to the requirements provided for in subsection (1) of this section, be reasoned and contain an explanation concerning the procedure for further recourse.

 

§ 150. Burden of proof

(1)        If an amount of tax assessed in a tax notice or notice of assessment is challenged, the burden of proof that the tax was assessed incorrectly lies with the taxable person.

(2)        If a determined amount of tax is challenged by a taxable person, the burden of proof regarding evidence possessed only by a tax authority lies with the tax authority.

 

§ 151. Right to appeal

(1)        A taxable person or another participant in proceedings whose request was not satisfied in the course of challenge proceedings or whose rights were violated in the challenge proceedings has the right to file an action with an administrative court under the conditions and pursuant to the procedure provided by the Code of Administrative Court Procedure. An action may be filed, inter alia, to claim the following:

1)         for repeal of an administrative act or a portion thereof, the repeal of which has been applied for by a dismissed challenge;

2)         for issue of an administrative act, the issue of which has been applied for by a dismissed challenge;

3)         against a decision on a challenge if it violates the rights of a person regardless of the object of the challenge proceedings.

(22.10.2003 entered into force 01.01.2004 – RT I 2003, 71, 472)

(2)        A taxable person or another participant in proceedings may have recourse to a court for adjudication of the matter at each stage of the challenge proceedings. A person also has the right of recourse to a court without filing a challenge.

 

Chapter 15

Punishments Imposed for Violation of Tax Law

 

§ 152. Fraudulent miscalculation of tax

(1)        The submission of a tax calculation or false information in a tax return or other document submitted to a tax authority which results in the amount of tax payable being less than the amount of tax to be paid pursuant to an Act concerning a tax or the amount to be refunded, compensated for or set off being greater than the amount to be refunded, compensated for or set off pursuant to an Act is punishable by a fine of up to 300 fine units.

(2)        The same act, if committed by a legal person, is punishable by a fine of up to 50 000 kroons.

 

§ 153. Failure to withhold tax

(1)        Failure to withhold an amount of tax prescribed by an Act concerning a tax from payments made to a taxpayer or failure to transfer the withheld tax amounts to the bank account of the tax authority in full or on time is punishable by a fine of up to 300 fine units.

(2)        The same act, if committed by a legal person, is punishable by a fine of up to 50 000 kroons.

 

§ 154. Obstruction of activities of tax authority

(1)        Failure to submit a tax return, documents, things or other information by the due date, failure to register with a tax authority, submission of false information or knowing submission of incorrect documents to a tax authority, failure to comply with the requirements for the keeping of records, failure to comply with an order of a tax authority or obstruction of the activities of a tax authority in another manner is punishable by a fine of up to 300 fine units.

(2)        The same act, if committed by a legal person, is punishable by a fine of up to 50 000 kroons.

(3)        A misdemeanour provided for in subsection (1) of this section shall not be punished if the person has been issued a warning regarding the application of a penalty payment.

 

§ 1541. Violation of rules relating to goods subject to excise duty

(1)        The manufacture, dispatch, receipt, possession, storage, transfer or another unlawful act concerning excise goods in violation of the requirements provided for in an excise duty Act or legislation issued on the basis thereof, provided that the elements of a misdemeanour provided for in § 152 or 154 of this Act do not exist, is punishable by a fine of up to 300 fine units.

(2)        The same act, if committed by a legal person, is punishable by a fine of up to 50 000 kroons.

(23.11.2004 entered into force 01.01.2005 – RT I 2004, 84, 569)

 

§ 155. (Repealed – 19.06.2002 entered into force 01.09.2002 – RT I 2002, 63, 387)

 

§ 1551. Failure to perform obligations of excise warehousekeeper and registered trader

(1)        Failure to perform the obligations of an excise warehousekeeper and registered trader provided for in an excise duty Act, provided that the elements of a misdemeanour provided for in §§ 152, 154 or 1541 of this Act do not exist, is punishable by a fine of up to 300 fine units.

(2)        The same act, if committed by a legal person, is punishable by a fine of up to 50 000 kroons.

(23.11.2004 entered into force 01.01.2005 – RT I 2004, 84, 569)

 

§ 1552. Unlawful acts involving motor fuel imported under exemption from excise duty

(1)        The performance of unlawful acts or transactions involving fuel imported under an exemption from excise duty in the standard fuel tank of a motor vehicle is punishable by a fine of up to 300 fine units.

(2)        The same act, if committed by a legal person, is punishable by a fine of up to 50 000 kroons.

(04.12.2002 entered into force 01.04.2003 – RT I 2003, 2, 17)

 

§ 156. Tampering with meter or preventive measure

(1)        Tampering with or removal or replacement of a meter or preventive measure installed pursuant to an Act concerning a tax or this Act without the permission of a tax authority, or any other activity due to which a meter or preventive measure cannot be used as intended is punishable by a fine of up to 200 fine units or by detention.

(2)        The same act, if committed by a legal person, is punishable by a fine of up to 40 000 kroons.

 

§ 157. Organisation of gambling using gambling machine or gambling table without revenue stamp

(1)        Organisation of gambling using a gambling machine or gambling table that does not have a revenue stamp for the corresponding taxable period is punishable by a fine of up to 300 fine units.

(2)        The same act, if committed by a legal person, is punishable by a fine of up to 50 000 kroons.

 

§ 158. Violation of obligations arising from Heavy Goods Vehicle Tax Act

(1)        Failure to re-register a lorry pursuant to the requirements arising from the Heavy Goods Vehicle Tax Act (RT I 2000, 81, 515; 2002, 110, 655; 2003, 23, 135) or use of a heavy goods vehicle with a registration certificate which has not been re-registered is punishable by a fine of up to 100 fine units imposed on the owner or possessor of the lorry.

(2)        The same act, if committed by a legal person, is punishable by a fine of up to 20 000 kroons.

 

§ 159. Failure to issue certificate

(1)        Failure to issue a certificate concerning tax withheld or paid on payments made to a taxpayer, if such obligation is imposed on the person who makes the payment by law, is punishable by a fine of up to 100 fine units.

(2)        The same act, if committed by a legal person, is punishable by a fine of up to 7000 kroons.

 

§ 160. Limitation period for imposition of punishment

A misdemeanour provided for in this Chapter expires after three years have passed between the commission thereof and the entry into force of the corresponding judgment or decision. In the case of an intermittent misdemeanour, the limitation period shall be calculated as of the date of commission of the last act. In the case of a continuous misdemeanour, the limitation period shall be calculated as of the termination of the continuous act. The limitation period of a misdemeanour shall be suspended pursuant to the provisions of the Penal Code.

 

§ 161. Release from punishment

A person shall be released from punishment in part or in full if, prior to the commencement of a tax audit or proceedings in the matter of a violation of tax law, the person submitted information to a tax authority in writing concerning the amount of tax unpaid as a result of a violation provided for in this Chapter.

 

§ 162. Proceedings and accrual of fines

(1)        The provisions of the General Part of the Penal Code and the Code of Misdemeanour Procedure apply to misdemeanours provided for in this Chapter, taking account of the specifications provided for in this Chapter.

(2)        The following extra-judicial bodies conduct proceedings in matters of misdemeanours provided for in this Chapter:

1)         the Tax and Customs Board;

2)         tax authorities for local taxes (in matters relating to local taxes).

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(3)        Fines imposed by tax authorities for state taxes are paid into the state budget, fines imposed by tax authorities for local taxes are paid into the budget of the local government.

 

Chapter 16

Implementing Provisions

 

§ 163. Application of this Act to tax liabilities incurred prior to entry into force of this Act

(1)        The provisions of this Act apply to the making of assessments of tax and the refund of overpaid amounts relating to tax liabilities incurred prior to the entry into force of this Act.

(2)        (Repealed as of I January 2003 – 11.06.2003 entered into force 07.07.2003 – RT I 2003, 48, 341)

(21)      The right to compensation for damage does not arise for a taxable person upon payment of interest calculated on the amount of tax arising from legislation in force prior to the entry into force of this Act and unpaid by the due date. Claims for interest for a period preceding the entry into force of this Act presented by the tax authority after 5 November 2002 are invalid. All other valid claims for interest are subject to fulfilment.

(11.06.2003 entered into force 07.07.2003 – RT I 2003, 48, 341)

(3)        The provisions of this Act concerning the amendment and repeal of tax notices, notices of assessment and liability decisions apply to the amendment and repeal of precepts, decisions and tax notices issued pursuant to §§ 21, 22, 231 and 40 of the Taxation Act in force until the entry into force of this Act.

 

§ 164. Collection of tax arrears incurred prior to entry into force of this Act

(1)        Tax arrears incurred prior to the entry into force of this Act shall be collected pursuant to the procedure provided for in this Act. Collection commenced prior to the entry into force of this Act may be continued pursuant to the procedure provided for in this Act.

(2)        The provisions of this Act concerning the compulsory execution of liability decisions apply to the compulsory execution of precepts issued to guarantors for the payment of amounts of tax pursuant to the Taxation Act in force prior to the entry into force of this Act.

 

§ 165. Application of provisions concerning limitation periods

(1)        The provisions of this Act concerning suspension (§ 99) and interruption of limitation periods (subsections 132 (4)-(6)) apply to limitation periods which have begun to run prior to the entry into force of this Act if grounds for the suspension or interruption of the limitation period arise after the entry into force of this Act.

(2)        The limitation period provided for in subsection 98 (2) of this Act, commencing as of the entry into force of this Act, applies to tax liabilities which were incurred prior to the entry into force of this Act and which do not involve an obligation provided by law to submit tax returns.

(3)        The limitation period for the calculation of interest on amounts of tax or on amounts refunded to persons without basis which are returned or set off prior to the entry into force of this Act is one year as of the entry into force of this Act.

 

§ 166. Resolution of disputes

Objections and appeals filed prior to the entry into force of this Act shall be resolved pursuant to the procedure provided for in the Taxation Act in force prior to the entry into force of this Act.

 

§ 167. Punishment of legal persons for acts committed prior to entry into force of Penal Code

(1)        Legal persons shall be punished for violations of tax law committed prior to the entry into force of the Penal Code and after the repeal of the Taxation Act pursuant to the provisions of subsections (2)-(13) of this section.

(2)        Failure to submit a tax return by the due date, failure to comply with the requirements for the keeping of records, failure to register with a tax authority, failure to give notice of changes in information submitted upon registration or failure to submit documents to a tax authority is punishable by a fine of up to 10 000 kroons.

(3)        Tampering with or removal or replacement of a meter or preventive measure installed on the orders of a tax authority, or any other activity due to which a meter or preventive measure cannot be used as intended, or obstruction of the activities of a tax authority upon verification of the correctness of payment of taxes, assessment of tax payable or collection of tax arrears, or failure to comply with an administrative act issued by a tax authority to this effect is punishable by a fine of up to 20 000 kroons.

(4)        Indicating in a tax return or other documents submitted to a tax authority a smaller amount of tax than that prescribed in an Act concerning a tax or a greater amount of tax than that due to be refunded pursuant to an Act concerning a tax is punishable by a fine in an amount of up to 40 per cent of the amount by which the amount of tax as indicated by the taxpayer is lower than the amount of tax to be paid pursuant to an Act concerning a tax or by which the amount of tax to be refunded as indicated by the taxpayer is greater than the amount of tax to be refunded pursuant to an Act concerning a tax.

(5)        An activity specified in subsection (4) of this section, if the activity is performed intentionally, is punishable by a fine in an amount of up to 100 per cent of the amount by which the amount of tax as indicated by the taxpayer is lower than the amount of tax to be paid pursuant to an Act concerning a tax or by which the amount of tax to be refunded as indicated by the taxpayer is greater than the amount of tax to be refunded pursuant to an Act concerning a tax.

(6)        Failure to withhold or pay taxes which have been withheld is punishable by a fine in an amount of up to 100 per cent of the amount of tax unpaid within the set term.

(7)        If a credit institution fails to comply with an order of a tax authority to seize a bank account, a fine equal to the amount of the tax not paid by a taxpayer by the due date shall be imposed on the credit institution, whereupon the fine shall not exceed the amount in the bank account of the taxpayer at the moment when the bank account is seized.

(8)        Organisation of gambling using a gambling machine that does not have a revenue stamp for the corresponding taxable period is punishable by a fine of up to 50 000 kroons per gambling machine without a revenue stamp in the gambling location.

(9)        Organisation of gambling using a gambling table that does not have a revenue stamp for the corresponding taxable period is punishable by a fine of up to 100 000 kroons per gambling table without a revenue stamp in the gambling location.

(10)      Trade in cigarettes at a price which is higher than the price printed on the revenue stamp attached to the sales packaging of the cigarettes is punishable by a fine of between 5000 and 40 000 kroons.

(11)      Failure to re-register a lorry pursuant to the requirements arising from the Heavy Goods Vehicle Tax Act (RT I 2000, 81, 515; 2002, 110, 655; 2003, 23, 135) or use of a heavy goods vehicle with a registration certificate which has not been re-registered is punishable by a fine of up to 20 000 kroons imposed on the owner or possessor of the lorry.

(12)      The director general of a tax authority, his or her deputy, the head of the regional tax centre of a tax authority and persons authorised by a director general or the the head of the regional tax centre have the right to hear matters of violations of tax law provided for in subsections (2)-(11) of this section and to impose punishments in such matters. An official authorised by a council has the right to hear matters concerning violations of the Local Taxes Act and to impose punishments in such matters. Matters of violations of tax law shall be heard and punishments shall be imposed pursuant to the procedure provided for in the Code of Administrative Court Procedure, in accordance with the terms specified in subsection (13) of this section.

(17.12.2003 entered into force 01.01.2004 – RT I 2003, 88, 591)

(13)      An administrative penalty for a violation of tax law provided for in subsections (2)-(11) of this section may be imposed not later than within three years as of the offence being committed.

 

§ 168. Liability of persons convicted of tax offences pursuant to Criminal Code for payment of tax arrears

A person who is convicted of committing a criminal offence provided for in § 1481 of the Criminal Code (RT 1992, 20, 287 and 288; RT I 2001, 73, 452; 85, 510; 87, 526) shall be liable for tax arrears incurred as a result of the offence committed by the person pursuant to the provisions of subsection 41 (1) of this Act and a tax authority may prepare a liability decision obligating the person to pay the tax arrears.

 

§ 169. Repeal of Taxation Act

The Taxation Act (RT I 1994, 1, 5; 2000, 45, 279; 55, 365; 84, 533 and 534; 2001, 17, 76; 43, 242; 48, 266; 56, 335; 59, 360; 65, 378; 88, 531) is repealed.

 

§ 170. Entry into force of Act

(1)        This Act enters into force on 1 July 2002.

(2)        Clause 30 2) of this Act enters into force as of the moment of Estonia’s accession to the European Union.

(3)        Sections 152–160 and 162 of this Act enter into force on the date on which the Penal Code enters into force.

 

1 COUNCIL DIRECTIVE 77/799/EEC concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation (OJ No. L 336, 27.12.1977, pp. 15-20);

COUNCIL DIRECTIVE 79/1070/EEC amending Directive 77/799/EEC concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation (OJ No. L 331, 27.12.79, pp. 8-9);

COUNCIL DIRECTIVE 92/12/EEC on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ No. L 76, 23.03.1992, pp. 1-13);

COUNCIL DIRECTIVE 2003/93/EC amending Council Directive 77/799/EEC concerning mutual assistance by the competent authorities of the Member States in the field of direct and indirect taxation (OJ No. L 264, 15.10.2003, pp. 23-24);

COUNCIL DIRECTIVE 2004/56/EC amending Council Directive 77/799/EEC concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation, certain excise duties and taxation of insurance premiums (OJ No. L 127, 29.04.2004, pp. 70-72);

COUNCIL DIRECTIVE 2004/106/EC amending Directives 77/799/EEC concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation, certain excise duties and taxation of insurance premiums and 92/12/EEC on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ No. L 359, 04.12.04, pp. 30-31);

COUNCIL DIRECTIVE 76/308/EEC on mutual assistance for the recovery of claims resulting from operations forming part of the system of financing the European Agricultural Guidance and Guarantee Fund, and of the agricultural levies and customs duties (OJ No. L 73, 19.03.1976, pp. 18-23);

Council Directive 79/1071/EEC amending Directive 76/308/EEC mutual assistance for the recovery of claims resulting from operations forming part of the system of financing of the European Agricultural Guidance and Guarantee Fund, and of agricultural levies and customs duties (OJ No. L 331, 27.12.1979, p. 10);

Council Directive 92/108/EEC amending Directive 92/12/EEC on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products and amending Directive 92/81/EEC (OJ No. L 390, 31.12.1992, pp. 124-126);

Council Directive 2001/44/EC amending Directive 76/308/EEC on mutual assistance for the recovery of claims resulting from operations forming part of the system of financing the European Agricultural Guidance and Guarantee Fund, and of agricultural levies and customs duties and in respect of value added tax and certain excise duties (OJ No. L 175, 28.06.2001, pp. 17-20);

2 RT = Riigi Teataja = State Gazette

3 Riigikogu = the parliament of Estonia

4 Ametlikud Teadaanded = Official Notices

 

Source: http://www.legaltext.ee/text/en/X60023K5.htm