Upcoming changes in 2024 relating to changes in standard VAT rate

Owned by Jhelver Layderos
Dec 08, 2023
2 min read

From January 1, 2024, the new standard VAT rate in Estonia is 22%. Consequently, an additional row will be introduced in the VAT return to reflect the new tax rate.

 

To support these changes, there will be two upcoming updates to the Estonia Localization SuiteApp:

  1. New Tax Code VAT Position Mapping. - A new option will be added in the VAT return to allow mapping for the 1.1 VAT row. This is targeted to be released in December 2023.

  2. New VAT Return Form (KMD4).- A new VAT report form will be introduced which will include the updates to the following rows:

    This is targeted to be released in January 2024.

 

In preparation for the tax rate changes, administrators are advised to do the following: January 1, 2024, create a new tax code for the new tax rate. This will be the tax code that will be used by the users moving forward. Here are the steps to create tax codes:

  1. Navigate to Setup > Accounting > Tax Codes > New.

  2. Select Estonia as the country.

  3. Enter the name in the Tax Code field. (i.e. S-EE22).

  4. Enter the tax rate in the Rate field. (22%).

  5. Enter January 1, 2024 in the Effective From field.

  6. Select the Subsidiaries that will be using the new tax code.

  7. Select the Tax Agency and Tax Type. You may copy the tax agency from your existing tax codes.

  8. Set Available On to both.

  9. Skip the [STA-EE] VAT Position. This will be setup later after the release of the new features.

  10. Click Save.

 

After the release of the new feature (bundle update), the following are the steps that must be taken by the administrators:

  1. Navigate to Setup > Accounting > Tax Codes.

  2. Filter the Country to Estonia so that only the tax codes from Estonia will appear in the list.

  3. Edit the tax codes that is previously assigned to Box 1 (this is usually the S-EE20. Change the position from 1 to 1.1 in the [STA-EE] Vat Position field.

  4. Edit the new tax code that was created (22%), then, assign 1 in the [STA-EE] Vat Position field.

 

Important: We advice not to change the rate on the current tax codes. Doing so may affect historical records and audit accountability.