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Sales Tax and VAT Services
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Estonia Declares a Reduced VAT Rate on Press Publications to 5%
December 13, 2023
Estonia cut the value-added tax rate on press publications to 5% from 9%. The modification went into effect on August 1, 2022. This applies to both tangible and digital media.
As before, the regular VAT rate of 20% will continue to apply to erotica, pornography, and audiovisual material, as well as publications supported by advertising (such as newspapers and private ads). Distinguishing press publications, which pay the standard 10% rate, from books, which pay the reduced rate of 9%, is also necessary.
There are a few important criteria to use when deciding whether or not the publication qualifies as press. An ISSN (International Standard Serial Number) indicates that the publication is a legitimate news source. This is because an ISSN number is often given to periodicals like newspapers and magazines.
Here are a couple of things that you should consider:
A publication is treated as a book subject to the 9% VAT rate rather than a press release when it carries both an ISSN and an ISBN (International Standard Book Number).
An ISSN-only publication may be treated as a book and subject to the standard VAT rate of 9%. This is because certain non-press publications, such as annual reports, monograph series, and periodic statistics collections, also have ISSN numbers.
When it is unclear, the tax authorities will make a case-by-case decision in collaboration with the taxpayer.
It is essential to evaluate the effect of this change in the VAT rate on your compliance function. Your VAT reporting team should verify that transactions spanning periods with various rates are correctly reported. Credit notes and continual service deliveries can generate problems regarding your reporting responsibilities.
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