Choosing the right tax rate must be based on the time of supply of products and services:
However, there are two transitional provisions (e.g. transactions related to long-term contracts), which you can read about following the link: https://www.emta.ee/en/business-client/taxes-and-payment/value-added-tax#from-01012024
Tax and Customs Board has brought out some examples of VAT rate change related situations, which you as a business owner might be facing:
What should be the VAT rate in this case? As the supply was fully generated in 2023, then it is taxed at 20% VAT rate.
When returning products, the invoice is credited just as it was issued, thus the credit invoice has a 20% VAT rate.
No supply is created from issuing an invoice alone. If both the delivery and the payment take place in 2024, the transaction is taxed at the VAT rate of 22%, and the VAT rate indicated on the invoice must also be 22%.
More examples can be seen here: https://www.emta.ee/en/business-client/taxes-and-payment/value-added-tax#examples-01012024
In case you are interested in or already use our accounting services, please do not hesitate to contact us and send us directly any tax-related questions you have.