Bookkeeping, source documents and e-invoices for an Estonian OÜ

Every Estonian company keeps books, even when it does nothing. This guide covers the day-to-day rules for a small private limited company (OÜ): e-invoices since 01.07.2025, what a source document must show, scans and retention, the internal accounting rules, foreign currency, the monthly routine, payment platforms, and a change of accountant. The annual report has its own guide.

In short

• Since 01.07.2025 you must send an e-invoice when the buyer is registered as an e-invoice recipient in the Business Register and asks for one. Otherwise you agree the format with the buyer.
• Every company registered in Estonia keeps books by double entry and files an annual report, with or without activity.
• The board stays responsible for the books when an accounting firm does the work.
• A payment with no proper source document is taxed at 22/78 as a non-business expense.
• Keep source documents for seven years. A legible scan can replace the paper.

When must a company send an e-invoice?

You must send an e-invoice when your buyer is registered as an e-invoice recipient in the Business Register and asks you for one. This rule applies from 01.07.2025. In all other cases you and the buyer agree on the format. There is no general duty to send e-invoices between businesses in Estonia under the law as in force on 30.09.2026.

How the recipient register works. A company that wants to receive only machine-readable invoices, or its e-invoice operator, notifies the Business Register. The register marks the company as an e-invoice recipient and records its operator or other channel (Accounting Act § 7^1(3)). A registered recipient may require the seller to send an e-invoice. An e-invoice that follows the European standard EN 16931-1 is properly formatted, and the parties may agree on another standard (§ 7^1(7)). Outside this case, the format and delivery of machine-processable documents are agreed between the parties (§ 7^1(1)).

A PDF is not an e-invoice. The law prefers machine-processable source documents. A PDF or paper document is acceptable when the other party cannot handle machine-processable documents without disproportionate cost (Accounting Act § 7(5)). For VAT, you may send an invoice electronically when the buyer accepts it (VAT Act § 37(6)), and you must issue it within seven calendar days of the supply (§ 37(1)).

What to do in practice.

• Before you invoice a customer, check in the Business Register whether it is an e-invoice recipient. Registration is not automatic, so check every buyer, public bodies included.
• To receive e-invoices yourself, sign a contract with an e-invoice operator (many accounting packages include one), and make sure the operator registers you.
• Enter your e-invoice address both with the operator and in your accounting software. Otherwise invoices can arrive where nobody sees them.

When an e-invoice does not arrive. The payment date in the contract still applies. If rent is due on a fixed date, it is due on that date whether an invoice arrived or not (Law of Obligations Act § 82), and late interest runs from then (§ 113). If no payment date was agreed, payment falls due at the latest 30 days after you receive the invoice (§ 82^1(1)). For VAT, a late invoice moves your deduction: if the invoice arrives after you filed the VAT return for the month of the supply, you deduct the input VAT in the month you receive it (VAT Act § 31(9)).

What changes next. The Tax and Customs Board announces a new VAT return, which combines the KMD and the recapitulative statement (VD), from the April 2027 tax period; the VAT Act as in force on 30.09.2026 does not contain it yet. Sending the data directly from your accounting software will be voluntary (Tax and Customs Board).

Must a company with no activity keep books?

Yes. Every legal person registered in Estonia is an accounting entity, whether it trades or not (Accounting Act § 2). It must document its transactions, record them, file the annual report and keep its documents (§ 4). The books are kept on an accrual basis and by double entry (§ 5 and § 6).

A "dormant" company still has transactions: the share capital, bank fees, the fee for the legal address or contact person, state fees. Each needs a source document and an entry.

• The annual report is due within six months of the year end (Commercial Code § 179). A company that does not file gets a warning with a deadline, and it may be deleted once three months have passed since the due date (Commercial Register Act § 61).
• A VAT-registered company files a VAT return (KMD) every month by the 20th, even with nothing to declare (VAT Act § 27).

Who may keep the books. The board organises the accounting (Commercial Code § 183). The law does not require a certified accountant or an outside firm, so a board member may keep the books. In practice, that person needs to keep double entry, reconcile the bank, file the returns and prepare the annual report.

Who is responsible when an accountant keeps the books?

The company and its board, toward the state, the register and creditors. Outsourcing does not move that duty. The board organises the accounting (Commercial Code § 183), and by filing the annual report the board members confirm that its data are correct and complete (Accounting Act § 25(2)).

• Taxes. The legal representative must make sure the company meets its tax obligations (Taxation Act § 8). If the representative breaches that duty intentionally or through gross negligence, that person is jointly liable for the resulting tax debt (§ 40(1)).
• The company. Board members who damage the company by breaching their duties are jointly liable to it, unless they prove due diligence (Commercial Code § 187(2)).
• Crime. A knowing breach of the accounting rules that makes the company's financial position much harder to see is a criminal offence (Penal Code § 381^1).

The accounting firm answers to the company under its service contract. It must work at the level of professional skill expected of it (Law of Obligations Act § 620). In practice the line is the documents: an error from a missing or wrong document of the client is the client's, and an error in processing correct documents is the firm's. Read the liability cap in your engagement letter.

What must a source document contain?

At least the date, a description of the transaction and the figures, such as quantity, price and amount (Accounting Act § 7(2)). An invoice to a company must also carry an invoice number and data that identify both parties (§ 7(3)). Every entry rests on a source document (§ 6).

A bank or card statement proves the payment, but usually not the economic content that a source document must describe (Accounting Act § 7(1) and (2)). It is enough on its own only for a self-explanatory payment, such as a bank fee. For anything else, add the supplier's receipt, order confirmation or an extract from your supplier account.

For VAT you need more. Input VAT on a domestic purchase is deducted only on an invoice that meets the VAT Act (VAT Act § 31(1) and § 37). For goods and services bought from foreign businesses under reverse charge, other evidence can be enough (§ 31(2) and (3)).

With no document at all, the payment is a non-business expense (Income Tax Act § 51(2), clause 3). The company pays income tax of 22/78 on it (§ 4) and declares it on the TSD by the 10th of the next month (§ 54). If you find the document later, you can recalculate and get the tax back (§ 54(6)).

Are scans enough, and how long must documents be kept?

Yes, a legible scan or photo can replace a paper receipt, if no data change. You may then keep only the scan (Accounting Act § 7(9)). An invoice you received electronically is kept in its original form, not only as a printout (VAT Act § 36(1)).

Keep each document until the latest of these dates, in machine-processable form where you can, and legible with its evidential value for the whole period (Accounting Act § 12(5)).

Storage abroad. You may choose where you store invoices, if you make them available to the tax authority at once on request (VAT Act § 36(4)). The tax authority may ask for an Estonian translation (Taxation Act § 57). After liquidation, the documents of an OÜ are kept in Estonia (Commercial Code § 219). Make sure the company itself, not only its accountant, holds every document.

Does an OÜ need written accounting rules?

Only if it is not a micro undertaking (Accounting Act § 11(1)). A micro undertaking does not exceed two of three limits on its balance sheet date: total assets of 450,000 euros, income of 900,000 euros and 10 employees on average (§ 3, clause 14).

A larger company's rules must include the chart of accounts with a description of each account, and cover how transactions are documented and recorded, the flow and storage of documents, the inventory, the accounting policies, the software and internal control (§ 11(1)). Even a micro company benefits from a one-page policy that fixes, for example, the threshold for fixed assets and the source of exchange rates.

Which exchange rate do you use?

Book a foreign currency transaction in euros at the rate of the transaction date. At the balance sheet date, revalue money, receivables, payables and loans in foreign currency at the closing rate, and put the difference in profit or loss. Non-monetary items at cost, such as prepayments and fixed assets, stay at the historical rate (Accounting Standards Board guideline RTJ 1 (annex 1, in Estonian), paragraphs 93 to 97).

The guidelines do not name a rate source. Fix your choice in your accounting policy and use it every time. For VAT the rule is fixed: on a transaction other than an import, use the euro exchange rate of the European Central Bank on the day of the tax point; on an import, the customs rules set the rate (VAT Act § 29(13)).

How do you handle missing invoices each month?

Reconcile the bank every month before the VAT deadline of the 20th. Record transactions within a reasonable time, so that the returns are on time (Accounting Act § 6).

1. Import the bank, card and payment platform statements.
2. Match each payment to an invoice.
3. Send the owner a list of payments without documents and invoices without payments, with a deadline.
4. Resolve each item:
   • Document found: book it. A domestic invoice that arrives after you filed the VAT return for the month of the supply gives input VAT in the month you receive it (VAT Act § 31(9)).
   • Genuine expense, no invoice: book it on a substitute document, without input VAT on a domestic purchase (§ 31(1)).
   • Paid privately by the owner for the company: the company reimburses on an expense report.
   • Private or unsupported: the owner repays it. If it stays in the books with no document, it is taxed as a non-business expense (Income Tax Act § 51(2)). A private expense of a board member left in the books is a fringe benefit; see fringe benefits.

You may correct or delete an entry only to align it with the source document, and the reason and time must stay traceable (Accounting Act § 10).

How do you book income from Stripe, PayPal or Wise?

Treat each platform account as its own cash account. Book sales at their gross amount when they are earned, fees as separate expenses, refunds as reductions of sales, and payouts to the bank as transfers. Accrual accounting recognises income when the transaction happens, not when the money reaches the bank (Accounting Act § 5). Booking only the net payout understates both income and expenses, and breaks the VAT return.

• A sale can be booked from a summary document built from the platform's transaction report (Accounting Act § 7(7)).
• At month end, reconcile the ledger to the platform's official statement. A spreadsheet export helps with matching but does not replace the statement.
• At year end, revalue foreign currency balances at the closing rate (Accounting Standards Board guideline RTJ 1 (annex 1, in Estonian), paragraph 94).

Payment service providers report to the tax authority when a payee receives more than 25 cross-border payments in a quarter (VAT Act § 36^1). Unrecorded platform income is visible to the Tax and Customs Board.

What do you take when you change accountant?

The company, not the firm, must keep its books and documents for seven years (Accounting Act § 12). The firm must hand over everything it received or created for you (Law of Obligations Act § 626(1)). Either side may end a contract for an indefinite term at any time, unless the engagement letter sets a notice period. The firm may end it only if you can get the service elsewhere; if it ends it regardless, it must compensate your damage (§ 630(2)).

A handover checklist:

1. Cut-off. Agree the last month the old firm handles, and have it file that month's returns.
2. Annual report. Agree who finishes any open report.
3. Data. The ledger and journal of all open years, the subledgers, the reconciliations, the chart of accounts and every source document in its original format.
4. Software. Move ownership of the accounting software account to the company, so the history stays.
5. Access. Withdraw the old firm's rights in the e-Tax Board, the e-Business Register, the bank and the e-invoice operator, and grant them to the new firm.
6. Address and contact person. If the old firm provides your legal address or contact person, arrange the replacement first. See the address and contact person guide.

General information, not advice for your situation. The law as in force on 30.09.2026.