A German supplier sends inventory to an Estonian company and issues an invoice without Estonian VAT. The buyer may assume that there is nothing to declare until the goods are sold. An EU goods purchase can still create a purchase-side VAT entry. Where the goods move from another member state to Estonia and the parties meet the intra-Community acquisition conditions, the Estonian buyer calculates VAT on the acquisition. This guide follows one invoice into the KMD return and shows how the outcome changes when the buyer has only limited VAT liability.
I am Dmitri Schmidt, a certified accountant and CEO of AccRes with more than 15 years in Estonian accounting. Start with where the goods actually travelled, then establish the buyer's registration status and intended use. The amounts here are illustrative. Services, triangular transactions, goods installed in Estonia and special-rate goods need a separate assessment.
Establish where the goods moved
Under EMTA’s acquisition guidance, the standard case is goods bought from a taxable person in another member state and transported from that state to Estonia. Match the supplier and buyer details with the order, invoice and delivery record. A German billing address alone does not prove that goods moved from Germany; the supplier may already hold them in Estonia.
Do not reuse this goods example for a service, an import from outside the EU or goods installed in Estonia. The Estonian buyer's acquisition is also distinct from an Estonian seller's intra-Community supply. The buyer does not report this purchase as a sale on form VD.
Keep the supplier invoice, Estonian VAT number, dispatch or delivery evidence, and a record of the business use of the goods together.
Follow a EUR 1,350 purchase through KMD
Assume a fully registered Estonian company buys standard-rated goods from Germany for EUR 1,250. The seller adds EUR 100 transport to Estonia on the same invoice. Under EMTA’s taxable-value guidance, transport charged by the seller forms part of the acquisition value: EUR 1,250 + EUR 100 = EUR 1,350. At the Estonian 24% rate in this example, acquisition VAT is EUR 324.
EMTA’s KMD example places EUR 1,350 in field 1 and the informative fields 6 and 6.1. EUR 324 goes in field 4. If the goods are used wholly for taxable business and the deduction conditions are met, EUR 324 also goes in field 5. This purchase then has no net VAT payment, although its KMD entries are far from zero.
| KMD field | Illustrative entry | Meaning |
|---|---|---|
| 1 | EUR 1,350 | Acquisition value taxable at 24% |
| 4 | EUR 324 | Estonian VAT calculated by the buyer |
| 5 | EUR 324 | Input VAT if fully deductible |
| 6 and 6.1 | EUR 1,350 | Informative EU goods acquisition value |
Field 6 also includes certain services received from another member state's taxable person; 6.1 identifies the goods portion. Showing the same value in both informative fields does not mean buying the goods twice.
Ask for a correction if the seller charged foreign VAT
An invoice showing German VAT does not automatically remove the Estonian acquisition. EMTA explains that foreign VAT is excluded from the Estonian taxable value even when the goods were transported here and the seller charged it. If the seller should have invoiced the cross-border supply at 0%, ask for a corrected invoice and a refund of the amount paid to the seller.
Do not put German VAT into Estonian KMD field 5 as Estonian input VAT or net it against the EUR 324 calculated here. Retain the original and corrected invoices plus movement evidence. A chain transaction or a different destination can change the analysis, so resolve those facts first.
The reporting period follows the acquisition timing rule, rather than simply the bank-payment date. EMTA explains how invoice date and the fifteenth day of the following month interact.
A business without full VAT registration faces a separate threshold
For a business that is not an ordinary VAT payer, check EMTA’s EUR 10,000 rule for qualifying EU goods acquisitions from the start of the calendar year. If previous qualifying purchases total EUR 9,000 and the next one costs EUR 3,000, that transaction takes the total to EUR 12,000 and may trigger limited VAT registration from the threshold-crossing acquisition. Excise goods and new means of transport have special rules.
A limited-liability VAT payer pays Estonian VAT on the acquisition but cannot use the ordinary input VAT deduction. On a qualifying EUR 3,000 purchase at 24%, the illustrative EUR 720 is therefore a real payable amount, not a matching deduction. This EUR 10,000 purchase threshold is separate from the EUR 40,000 domestic sales registration threshold.
If the business already holds a limited VAT number because it buys foreign services, review the rule before giving that number to a goods supplier: using it can bring the goods acquisition into Estonian VAT sooner.
Reconcile the invoice, shipment and return
EMTA’s timing guidance says the acquisition generally arises on the invoice date if the invoice is issued before the fifteenth day of the month after dispatch; otherwise it arises on that fifteenth day. Check the dispatch and invoice dates rather than relying only on arrival or payment. KMD and any VAT payable are normally due by the twentieth day of the following month.
At month end, pair each invoice with the transport evidence and verify field descriptions against the current KMD form. Buying goods alone does not require the Estonian buyer to submit a VD intra-Community supply report. Assess any separate outbound transactions on their own terms.
Base field 5 on actual eligible use. If the goods support exempt activity or private use, the full EUR 324 deduction in the worked example cannot be assumed.
When foreign VAT appears on a supplier invoice, I first check the goods movement and the VAT number used by the buyer. Importing the invoice line into accounting software does not settle where the acquisition is taxable.
For EU goods purchases, establish the physical route, calculate the taxable value and then fill KMD. In the EUR 1,350 example, EUR 324 is calculated as acquisition VAT and may also be deductible for a fully taxable business. A limited-liability buyer can instead face a cash VAT cost. Foreign VAT on the supplier's invoice needs separate correction rather than a shortcut in Estonian field 5.
If your company regularly buys goods from the EU, send one representative invoice, delivery record and your VAT status through the AccRes contact form. We can set up the correct KMD treatment before the next filing.