An Estonian design studio completes a brand guide for a US company on 30 October. The agreed fee is EUR 1,500. Before sending the invoice, the bookkeeper needs three answers: whether to add Estonian 24% VAT, where the fee belongs on the KMD return, and whether an EU recapitulative statement is needed. A US billing address alone does not settle those questions. The type of service and the buyer's business status matter more than the currency or where the designer sat.
I am Dmitri Schmidt, CEO of AccRes. This guide follows one ordinary remotely delivered B2B design service bought by an active US business. The seller supplies it from Estonia, not from a US fixed establishment. It does not cover property services, onsite event admission, catering, exempt services or US state taxes. Those limits are practical: they show exactly when the Estonian general rule works and why an EU customer invoice cannot simply be copied for a customer outside the EU.
Confirm the service and the buyer's business status
Under VAT Act § 10(4)(9), an ordinary B2B service supplied from Estonia to a person carrying on business outside the EU has its place of supply outside Estonia. Retain the buyer's company registration details, contract, order and deliverable description. A foreign postal address or payment in dollars is not, by itself, evidence that the buyer is a business or that the service follows the general rule.
Test exceptions before applying 0%. Services related to Estonian property, admission to an event here, restaurant services and short-term vehicle hire can follow different location rules under § 10(2) and (4). A private consumer does not automatically get the B2B result. Also check which establishment actually receives the service when the buyer has operations in several countries.
Issue the EUR 1,500 invoice with zero Estonian VAT
The design fee is EUR 1,500. Because the place of supply is outside Estonia, VAT Act § 15(4)(1) gives a 0% rate unless § 16 makes the service exempt. State EUR 1,500 net, EUR 0 Estonian VAT, and the § 15(4)(1) basis on the invoice. This is zero-rated turnover, not EUR 1,500 of exempt turnover. The fact that the designer worked in Tallinn does not by itself bring the customer-country service back into Estonian VAT.
VAT Act § 37(1), (1¹), (7) and (8) still requires an invoice for a supply whose place is outside the EU, with its number, date, parties, description, service date, value and zero-rate basis. Do not automatically stamp the invoice 'reverse charge': § 37(8)(2) links that wording to tax liability resting with the buyer. Any US tax or invoice requirement needs its own local check; the Estonian invoice does not answer it.
Use KMD line 3 and leave the sale off VD
With completion on 30 October and no advance, the ordinary VAT Act § 11(1) taxable-event rule places this sale in October. On the standard accrual VAT method, enter EUR 1,500 in October KMD line 3 for zero-rated turnover. EMTA explains the KMD and VD split: line 3 covers all 0% turnover, while qualifying B2B services to another EU member state also feed line 3.1 and VD.
VAT Act § 28(1)(2) confines the service side of VD to a taxable person in another EU member state. The US invoice therefore does not go in KMD line 3.1 or VD. Keep the accepted deliverable and buyer-status evidence next to the invoice so the KMD amount can be traced. An advance or cash-accounting special scheme changes the timing question; do not reuse the example's October period without checking it.
I confirm who bought the service and what was actually delivered before selecting a VAT code. The KMD and VD entries then follow from those facts.
A routine design service sold to a US business has a different reporting path from one sold to an EU VAT payer. In this example the Estonian VAT is zero, EUR 1,500 goes to KMD line 3, and there is no VD entry. The result depends on a real business buyer and a service that follows the general B2B place rule. Location-specific exceptions and customer-country tax remain separate questions.
If your company invoices services across several countries, contact AccRes. We can classify the services and customers before the next VAT return.