ETCB estimates that state loses 94 million euros of VAT revenue per year

ETCB estimates that state loses 94 million euros of VAT revenue per year
Photo: Maksu- ja Tolliamet

Added recommendations from the ETCB on how to avoid mistakes and tax controls.

Companies with VAT risk make up 6% of all companies in Estonia. This means that most Estonian entrepreneurs are aware of the current rules and follow them.

According to ETCB’s VAT risk manager, Kristi Veskus, the ETCB meticulously reviewed the VAT returns of nearly 11 000 companies last year. “Due to anomalies identified, we contacted companies both to clarify what had been declared and to draw attention to possible errors. As a result of us contacting the companies, the initially declared VAT liability of companies increased by nearly 53 million euros," Veskus said.

Most of the companies contacted by the ETCB voluntarily correct the mistakes in their tax returns as soon as the possible shortcomings are pointed out to them. In such cases, the ETCB has no reason to initiate proceedings that are burdensome for the taxpayer.

The ETCB finds most VAT return errors when analysing VAT refund claims. In 2024, companies had to correct refund claims on more than 1270 occasions for a total of 28 million euros.

“The most common infringement in the deduction of input VAT giving rise to unjustified claims for refund concerns the declaration of the VAT on purchases of less than 1000 euros in the VAT return as an aggregate amount, which the law does not require to be indicated by invoices and transaction partners. When asked by the ETCB, it turns out that no purchase invoices exist in such an amount. Such violations were identified in nearly 360 companies last year in the total amount of more than 14 million euros," Veskus added.