Müügimaks

Müügimaks, often translated as sales tax or value-added tax (VAT) in other countries, is a type of tax levied on the sale of goods and services. In Estonia, the primary form of sales tax is Value Added Tax (käibemaks). This tax is applied at each stage of the production and distribution chain, with businesses collecting the tax from their customers and remitting it to the state. However, the term "müügimaks" can sometimes be used more broadly to refer to any tax imposed on retail sales.

The standard rate of käibemaks in Estonia is 20%. Reduced rates of 9% apply to certain goods and services, such as certain foodstuffs, medicines, books, and accommodation. Some transactions are exempt from käibemaks altogether, including financial services, insurance, and educational services. Businesses that exceed a certain annual turnover threshold are required to register for käibemaks and collect it from their customers. They can then deduct the käibemaks they paid on their own purchases (input tax) from the käibemaks they collected from sales (output tax). The difference is paid to the Estonian Tax and Customs Board. The purpose of müügimaks, primarily through käibemaks, is to generate revenue for the government to fund public services. It is a consumption-based tax, meaning it is ultimately borne by the end consumer.