Estonian Ministry of Finance has prepared an amendment of the Value Added Tax Act and sent it to the other ministries for approval. According to the amendment, the threshold for registration as a VAT payer to be applied in the future will be 40,000 euros instead of the present 16,000 euros.

The Ministry of Finance writes in the explanatory memorandum to the act that the persons whose taxable turnover as of the start of the year does not exceed the threshold are not obliged to register themselves as VAT payers, but they can still do it. This means that VAT accounting or submission of VAT returns is not obligatory for them. The purpose of the amendment is to reduce the administrative burden of enterprises. The quantity of enterprises who don’t have to register themselves as VAT payers will be increased to achieve this. The amendment is aimed at reducing the administrative burden of micro-enterprises, which holds an important place in the European strategy of smart, sustainable and increasing economic growth.

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